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International Business (Embraer Corporation) - Essay Example

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Multinational corporations, as well as international business strategies, are regarded as the integral part of the globalization processes all over the world. It is often emphasized that international business has also become an essential part of the international relations. …
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International Business (Embraer Corporation)
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Download file to see previous pages The internationalization strategies that the companies resort to, often involve numerous factors. In the light of this fact, it should be stated that most governments are interested in attracting the financial resources of the Multinational Corporations. Therefore, while some companies develop their product, extend markets, increase the amount of workers, the others win governmental tenders, invest, and look for partners. Another aspect of the trade globalization strategy is closely linked with the opportunity to create employments all over the world. While the governments get an opportunity to reduce unemployment rates, the MNCs enjoy lower labour costs. The aim of the research is to analyze the globalization and expansion strategy of the EMBRAER (EMBRAER - Empresa Brasileira de Aeronautica S.A.). Since it is one of the largest aeronautical and aerospace conglomerates, it should be highlighted that the Brazilian globalization experience may be regarded as a universal path to success for other corporations with headquarters located in the developing countries. Company Overview. The company was founded in 1969 as a government owned corporation. It was engaged in developing and building aircrafts, including commercial and military machines. The globalization process of the EMBRAER Corporation started in 1994 when the company was privatized. The manufacturing capacities are concentrated in Brazil, and by 2010 the company had occupied the third place among the largest commercial aircraft suppliers (jointly with the Canadian Bombardier), while the first two places righteously belong to Boeing and Airbus. The total number of employees exceeds 17 000, and the expected net income in 2012 approaches to $ 350 million. Business units of the corporation are located in Brazil, USA, China, France, Portugal, and Singapore. In general, the internationalization of the aircraft business became the key driver of the expansion processes in EMBRAER. (King, 2006) In accordance with the official data, given on the website (Embraer Profile, 2012), the growth in 2000s was mainly stipulated by the increased demand for the ERJ aircrafts family. Considering the fact that the world demanded high flight safety after September 11, 2001, the company succeeded to adapt to the changed requirements of the aircraft building industry. The expansion strategy of the EMBRAER Corporation is mainly associated with the opportunity to invest into the aircraft and air transportation industries. Therefore, as it is stated in Kronemer (2006), American Airlines operates up to 200 ERJ jets. Regardless of the fact that AMR owns these aircrafts through the American Eagle Company, the EMBRAER had an opportunity to provision up to R$583.2 million. In the light of this fact, it should be stated that the described decision could influence the secondary market for medium sized jets, and the company performed essential restructuring the financial management oriented at international markets. Johnson and Turner (2003) emphasize that such a restructuring was needed for covering potential expenses, and getting financial guarantees linked with the ERJ 145 jets supplies. The next step was linked with the investments into the customer support network. Executive aviation is regarded as the sphere with the highest priority. On the other hand, the commercial aviation investments were ...Download file to see next pagesRead More
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