Embraer SWOT and PESTLE Analysis

Strength

1. Global Leader in 90-120 seats segment: Embraer E-series aircrafts have been performing really well over the segment. The capacity varies from a 50 seats to 120 seats and the demand for the smaller size aircraft is really good. Embraer is the global leader for the 90-120 seats segments. Despite the scheduled new products in the future, the sale of the first generation of E-Jets, mostly the E175 and E190 models, has been beyond expectations with previous years. This reflects customers’ preference for these airplanes and establishes the decision of offering the aircraft sector within this capacity, within one family. Embraer finished 10 years of its service in 2016 and Embraer Executive Aviation celebrated the sales and delivery of its 1,000th jet, a Legacy 500. The model was also approved for operations at London City Airport, one of the most restrictive landing sites in the world.

2. Strong Research and Development Teams: Embraer have established teams in the South American region with the vision to work with and encourage the organisation that are developing new and progressive technologies and business models that can significantly lay a positive impact on the aerospace industry in the future. Embraer’s R&D team recorded an expenditure of 14.2 Million US$ in the third quarter of 2017, with a total expenditure of 50 Million US$ in the entire year. This gives an indication of the money that company expects to generate in future and better their services.

3. Presence in over 60 countries: Embraer is present in over 60 countries and that is a huge reach. Embraer has a hard pushing sales team that is aggressively trying to capture new clients. Embraer is the third largest aircraft manufacturer in the world with a net income of 21.43 Billion Brazilian Real (R$). Embraer aircrafts are sold in USA, Ireland, France, Portugal, UAE, Singapore, China, and Mexico to name a few. As a part of a study, Embraer found out that every ten seconds, there is an Embraer Aircraft which takes off in some part of the world or the other.

4. Leading Defence Aircraft Manufacturer: Embraer Defence & Security plays a strategic role in the Brazilian defence system and is the segment leader in Latin America. The A-29 Super Tucano turboprop was the business unit’s best-selling model for the year and already serves 13 air forces in tactical support missions, counterinsurgency operations, advanced training and surveillance. Such success stories are many for Embraer and their contribution for the Brazilian defence and other Latin American Countries.

Weakness

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Opportunity

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Threat

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References

1. Embraer Annual Report 2016:https://www.embraer.com/relatorio_anual2016/en/clientes.htm

2. https://www.embraer.com/relatorio_anual2016/en/acionistas.htm

3. https://embraer.com/global/en/defense-and-security

4. https://embraer.com/global/en/executive-aviation

5. https://www.reuters.com/article/us-embraer-m-a-boeing/boeing-embraer-talks-have-not-settled-question-of-control-sources-idUSKBN1ER0RB

6. https://www.reuters.com/article/us-china-aviation-regional-analysis/regional-jet-makers-eye-china-market-boost-but-obstacles-loom-idUSKBN14803E

7. https://www.embraermarketoutlook2017.com/world-regions/north-america-rethinks/#from-strength-to-strength

8. https://corporatejetinvestor.com/wp-content/uploads/2015/10/1-The-state-of-the-business-jet-market-2015-20120.pdf

9. https://goo.gl/fy2SSB (Shortened URL for article)

Political

1. Political Stability of countries in Africa and Middle East: With increasing disturbance and proxy war going on in the middle East, the prior Ottoman empire, causes unrest and also inhibits the proxy was going on between USA and Russia. Even the political stability in African nation is also a cause of worry and potential business, both, for Embraer. The need for their defence aircraft go high, but the executive aircrafts sales will go down. Embraer need to focus on these cases and make decisions accordingly.

2. High level of corruption in defence contracts: Defence sector deals are often embroiled in corrupt practices and bribery. Further, Brazil is currently 79th in the least corrupt nations of all the world and corruption makes it difficult to deal with government entities for business and also leaves a trail of bad name for the company, therefore it is a challenge for Embraer to do business ethically and responsibly. Embraer executives were accused of giving $3.4 million bribe to a Dominican official for an airplane deal with the Dominican Republic. The company executives were also implicated in wrongdoing in deals with wrongdoing in deals with Saudi Arabia, India and Mozambique from 2007 to 2011. This inspired a corruption probe into US and Brazil operations of the company and Embraer had to pay $205.5 million in settlement with U.S. and Brazilian authorities.

Economic

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Social

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Technological

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Legal

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Environmental

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