Embraer S.A. Case Study: New Product Development and Challenges

This case study examines Embraer S.A., a Brazilian aerospace manufacturer, focusing on the challenges faced during the development and launch of its new E2 aircraft. The analysis delves into issues such as poor team collaboration due to cultural differences, difficulties in managing suppliers, and the impact of inadequate market analysis on production. The report evaluates Embraer's marketing plan and cost budget, highlighting the misalignment of employee goals with organizational objectives. It proposes solutions based on the New Product Development model, emphasizing the importance of customer insight, effective communication with suppliers, and the implementation of appropriate leadership styles to foster better teamwork and resolve production-related issues. The study also reviews the company's current market position and its strategies for maintaining competitiveness in the airline industry.

Case study analysis

Table of Contents
INTRODUCTION...........................................................................................................................3
Case Description..........................................................................................................................3
Problem statement Plan Analysis................................................................................................4
Analysing and Finding.................................................................................................................7
Proposed solution to the problem................................................................................................9
REFERENCES................................................................................................................................1

INTRODUCTION
The present report has been based on Embraer S.A. that is a Brazilian multinational
aerospace manufacturer that produce commercial executive, agricultural and military aircraft. It
is one of the third largest producer of civil aircraft after Airbus and the headquarter of the
organization has been located at Sao Paulo, brazil and area served is worldwide. The report will
mainly discuss about the new aircraft that has been produce by company Embraer 2 and the
challenges faced by the company while dealing with it (Embraer, 2022.). The report will do the
deep analysis of the marketing plan an and the cost budget that has been used by organization
and how it has affected the production line. The one of the common challenge that company has
been facing is poor alignment of employees goals with organization and due to that there is delay
in task. Although study will discuss about the problems that has been faced by organization
when planning and implementing the tactics to launch Embraer 2 and the various author view
point will also be presented. Moreover, the research will further discuss about the analysis of the
problem and the main focus will be on the current position of organization in the market area.
Lastly, the report will give recommendation to company related to best solution in order to deal
with the challenges arising due to external and internal factors.
Research Aim: To evaluate the impact of poor business plan while developing new product line.
A study on Embraer.
Objectives:
 To understand the concept of poor business planning.
 To evaluate models and concept related new production development and the way it
contributes in making the business plan effective.
 To identify the challenges faced by Embraer during production.
 To recommend the best solution for the organization in order to deal with the challenges.
Case Description
The present case study was based on one of the famous company of jet airlines Embraer
that is one of the world segment leader in aircraft industry. The organization has launched a new
program in which almost new aircraft E2 so that it can enter into new service and achieve highest
level of maturity in the aircraft company. Although the organization E1 programme was
successfully launched and it has helped in increasing overall growth of the organization.

Moreover, it was found in the case study that company has faced challenges related to production
as the market analysis was not properly done so minor problems was not address properly. Thus,
for dealing with the competition Embraer has decided to make use of good leadership by
launching new technology engine on their plans and to manufacture new large airplane in the
market area (History of Embraer., 2022). Along with this, E2 was a challenging mission for the
organization as first delivery was short five years and it has to set budget in order to build high
performance of the products. Moreover, the company is facing challenges related to product
redesigning and most of the people in the team was not able to collaborate with each other due to
cultural differences and different perspective about leadership. In addition to this, there was
issues relating to supplier due to miss communication regarding to condition of products. Thus,
due to bad planning for the business there has been issues faced by the organization and to
overcome it has taken some strategic steps such as collaborating with Germany to help supplier
so that first production of E2 flight is appropriate. Lastly, in the case it was identified that
Embraer E2 was first delivered to its first customer Wideroe Airlines in Norway on April 4, 2018
and the launch was successful just because value proposition of E2 programme was related with
core team and at all level of the organization.
Problem statement Plan Analysis
Throughout the case study it has been identified that Embraer was facing difficulty in two things:
 The collaboration of the team was not good at the time of making new products as there
was huge difference between culture perspective of employees. Although choosing leader
for the E2 programme was hard and CEO of the company has decided to divided team on
the basis of functional area. However, it was not the forts company to have team of 5000
people but there have been issues arising with the suppliers and delayed in development.
The manager of the team wanted its team to be more aligned but team was not prepared
for it and the programme was challenging due to limited time period and faster
development (Francelino and et.al., 2019). Furthermore, in the case it was identified that
aircraft development is not very easy and it require lot of experience. So for that it has
hire 14 managers so that it can manage their team properly and the main aim of the
organization can be reached. Thus, to find appropriate leader was challenging for the top
management and to coordinate with such large number employees was also difficult. It

has been found in the case study that there were visiting of the stranger in the restricted
area access to engineers.
 Another issue that has been faced by Embraer is it was difficult to manage suppliers as
each one of them has different customer condition. Although while selecting the
supplier chain some of the key points were taken into consideration such as cost,
technology and experience of working. The 80% of production costs for commercial
and executive aircraft at Embraer were for suppliers and there had been high
competition in the airline industry and main suppliers are running 50 billion companies.
This has been challenging for Embraer as it was a small company in relation to those
suppliers and other aircraft manufactures. For few of the supplier’s company
represented only 1 % of the profit and that lead to fewer suppliers. Thus, organization
need to have good sulky chain team so that it can provide material on time to engineers.
Embraer was making use of critical chain in order to manage suppliers and resolve the
team problems (Dias, Duzert and Teles, 2019). Although suppliers were making
complaint that organization is pressurising them from last 2 years and it though that
Embraer will not be able to meet their deadline as well as it has planned their resources
considering the program would be delayed. However, most of the suppliers were risky
and challenging due to complexity of the system and poor management or because
company was not important customer. And each supplier has their own properties and it
did not match with Embraer and it has decided not to deal with suppliers with whom
they had long term relation and it has pushed the suppliers as behaviour of the company
was poor earlier.
Proposed Plan of analysis
In order to analyse the current position of the firm and to solve the issue that has raised at
the time of new production. Along with this, the organization should make use of New Product
Development model as it will help in identifying the issues and deal with the solution. The plan
will help in analysing the impact of challenges in negative way as well as to give positive
solution to deal with it in enhanced way.
Literature Review
Galli and Lopez, (2018) has defined new product development as converting idea and
knowledge into workable products and the main focus is on innovation while delivering the

services. Along with this, many technical companies have tried to focus on the innovation sector
at the time of the pandemic so that new product development have increased. Moreover, the new
product development idea is success plan is to focus on product discovery and address the pain
points of the target audience. Thus while making the new services it is important to gather
customer insight through surveys, interviews, social media interaction and research. Although
product discovery is continuous process that should continue over the product life cycle stage
like idea generate, idea validation, pre-launch and post launch. In other words, product
discovery should be continuous throughout the life time.
Marzi, (2022) stated that this model helps in identifying the market strategy that will help in
increasing the awareness of the product in positive manner. Along with this, it helps in saving
money as it allows to have good market research and economically viable business models. The
new product development process is designed to eliminate this risk by testing the idea and
current market situation. Although it contributes strengthen and formalize the concept
development process and some of the common steps that is followed are product is pitched to the
senior staff, small business plan is approved and product is passed for development into
alternative product concepts.
Moreover, in the case study it was identified that organization was facing issues related to
managing engineering team as they were in large number. Along with this, for solving this issues
it need to develop good organizational culture and to make use of appropriate leadership style.
Furthermore, scholar Pitt, Park and McCarthy, (2021) has stated that in order to tackle large
number of employee democratic style need to be followed as it helps in maintain smooth flow of
information as well as to build health relation with them. In addition to this, Marion and Fixson,,
(2021) for addressing the issues difference organization should conduct meeting so that
employees can work collaboratively together and understand each other culture. Moreover, ----
has stated that it’s one of the most effective way to allow employees to know each other and to
hire leaders that have good professional skills as it will be able to solve issues effectively related
to team and suppliers. In addition to this, for solving the issues with supplier’s company need to
manage proper communication with them and clear their expectation as well as to make use of
track metrics for the supplier to check percentage of on time delivery and to find out defective
products. The company should improve their image in front of suppliers and keep them updated
so that it participates more in development of products.

Analysing and Finding
Current market position
E2
This programme was very successful for the firm as it helps Embraer in meeting with the
competitors in airline industry. The company was beating its direct competitor by launching
economic engines that would provide reduction in fuel burn by 10 and it has presented status quo
of company in aircraft market. Although in order to continuous the business in competitive
market it is very crucial for Embraer to make use of new technology engines in their planes and
it has to take decision regarding launching new aircraft at bigger market area with existing E jet
product (Zighan and Ahmed, 2020). Although the CEO of the company has decided to stay in
the position and it has made use of new product development model and generated an idea to
launch E 2 programme as it will be limiting new product growth and the organization would
defend its position strongly. It was found in the case study that E2 was challenging mission for
the company as there was limited time frame for them as first delivery as should be in 5 years
and it need to establish higher performance product under set budget. The aim of this project was
to replace the existing product that represent more than 50% of revenue for all of the company.
Marketing
Selling an aircraft take long time and various strong connection in order to share information.
Although the marketing sector of Embraer was divided into three units so that it can cover large
area of the market. Along with this, the sales unit of the company many relay closely to the
customers and other two unit of the marketing department in order to get appropriate information
(Trzeciak and et.al., 2022). The tactic of company mainly forecast details about how many
planes and size will be delivered in upcoming 20 years and it find out trend and opportunity that
can be used by organization in order to enhance their performance. They are also responsible for
new product development and changes that need to make in existing products and the ways to
enhance their sales. However, the third group of marketing deals with branding, promotion and
communicating the details about company to customer. Thus, the marketing team of Embraer
was good as before making change in the existing products or generating new ideas it takes
opinion of their customer. For example, before launching E1 it has considered the need of
consumer to be more fuel efficient engines and that was a great success for company.
Programme Management

Aviation industry is not like other industry as it required more workforce in order to fulfil the
demands of product and services. Along with this, it requires large number of employee in order
to produce product and the whole ecosystem had to be integrated. Moreover, for managing the
program the core team matrix will be followed by Embraer and it has mangers of all core
company areas (de Souza, Kaltenecker and Santos, 2022). The organization is following
fictional structure in which teams are divided on the basis of sector and each department have
functional leaders but also the core team leader for the particular program. Moreover, the core
team was establishing to build good relation with functional area that is consist of engineering
and other members. Although Embraer focus mainly on engineering and less concerned with
areas of marketing. However, it was most difficult for managing people at the supervisor level
as the organization was looking for experienced person that have emotional abilities (Hosseini,
Soltani and Mehdizadeh, 2018). The major responsibility of the seniors is to manage the team
and fill the gaps by addressing the issues. To make perfect team the company has tried to bring
different culture people with lot of experience as well as those with average length of time and
knowledge. Moreover, the aim of program management is to make business plan so that it can
understand key sections like stakeholders and creating benefits for the customer as well as
establishing safety for the partners and product. Although most of the employees have faced
culture difference among them and due to that it was not able to work collaboratively with each
other and that lead in delay. Furthermore, deliver of the program was very tight so there was an
agreement that team should act like athlete so that it stay motivated and work hard to achieve
goals.
Supplier chain administration
Supplier chain designed of Embraer was designed first and it involved consideration like
cost, technology and previous work experience. Although the company was facing major issues
with the suppliers as they were not distributing the products properly due to poor brand name
earlier. Moreover 80% of production cost for commercial and executive aircraft of Embraer were
from suppliers. Although the supplier of company is also limited and it need to ensure good
relation with them so that it can contribute in success of firm (Zulqarnain and et.al.,, 2021). The
integrated team has not coordinated with the suppliers and due to that there has been raise in
technical issues.

Proposed solution to the problem
The following solution will be helpful for the organization in order to deal with the
challenges:
 In order deal with the issue of new project company can make use of new product
development is the process of bringing innovative product in the market as well as
organization need to engage with customer and due to change in customer preferences.
Although E2 project is very difficult for the organization to continue and needed to be
perfect as it will be representing E1 project which has large contribution in increasing
overall revenue for company (Tooranloo, Ayatollah and Iranpour, 2018). However, there
are limited time frame and restricted amount. Moreover, this process will help in saving
the cost of the organization as well as it guides organization to make use of good
marketing strategies for the product. In the case study it has been found that company
was only focusing on engineering and production team and not on the promotion. Thus,
in order to increase the awareness of the product it can make use of digital marketing as it
will contribute in attracting large customer as well as to increase the sales.
 Moreover, it is to be suggested to company that it should improve their programme
management as it was hard for managing senior’s employees. Thus, company should
make use of good interview process so that it can hire people with qualities and abilities.
Furthermore, company have large number of employees so in order to maintain that
organization should conduct regular meeting and align organizational goals with personal
aims of the employees. So that it can work hard and there will be no issues relate to
culture and each team will be able to work collaborate (Trzeciak and et.al., 2022).
Although in order to deal with senior management there should be two-way
communication so that feedback can be given by senior manager in case of any issue.
Proper flow of communication removes issues and build good healthy relation with them.
 It has been found in the case study that Embraer was facing issue with supply chain
management and due to that there has been delay in their production. Along with this, it
is to be suggested for the company to make use of automatic purchasing as new ERP
software will allow company to track the order and place it in case of any drop in
inventory at certain level (Wang, and et.al., 2021). Although the critical supply chain
strategy will be able to maintain inventory levels and it will free up employees to

concentrate on other crucial dates. Along with this, process of standardization helps in
increase efficiency while saving the time and money and it also benefit employees that
share a standardized system of tools will increase encourage teamwork and reduce
miscommunication (Reis and et.al., 2019). In addition to this, organization need to
maintained transparency so that there is no fraud and problem can be fixed with right
ERP system. One of the biggest issue with the inventory management is to align software
number with physical count.

REFERENCES
Books and journals
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MANUFACTURING AND GLOBAL VALUE CHAINS: ANALYSIS OF
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Realidade,.36(02). pp.117-127.
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Golden Share Veto And The Anatomy Of A Joint Venture. International Journal of Business and
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project environments: A review of literature. International Journal of Risk and Contingency
Management (IJRCM). 7(4). pp.37-67.
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