EMBRAER: From national champion to global player

TLDR: In this article, the authors explored how Embraer, a Brazilian aircraft manufacturer, transformed itself after privatization to become a world market leader in a hightech industry traditionally dominated by companies based in member countries of the Organization for Economic Cooperation and Development (OECD).

Abstract: Much has been written on the macroeconomic aspects of the economic reform process in Latin America, but much less has been published on its microeconomic results, especially at the company level. This paper explores how Embraer, a Brazilian aircraft manufacturer, transformed itself after privatization to become a world market leader in a hightech industry traditionally dominated by companies based in member countries of the Organization for Economic Cooperation and Development (OECD). Its main findings are that top management played a key role in aligning innovation for dynamic capabilites, that the company has been very successful in forming alliances with foreign partners and strengthening its bargaining position, and that the Brazilian authorities have consistently supported Embraer after relinquishing direct control. For these results to be extended to other companies, however, Brazil’s export promotion tools must be made compatible with multilateral norms.