With a strong base to promote an aviation industry, later on 1969 was incorporated a stated own company named Empress Brasilia ad Aeronautic (Brazilian aeronautic Industry) – Embrace, that was later privatized on 1994. Several products were developed under a strict government orientation. It is true that although government controlled, not all products had a military purpose. Nonetheless, the commercial impact over the general market was not relevant at the time. Embrace position as one of the leading aircraft manufacturers was earned only a few years after it was privatized in 1994.
In between its incorporation and prevarication it went through many difficult periods and was not able to leverage its position as a key player in the industry. After the prevarication process was concluded, the company reactivated the ERG 135 reject that allowed the company to get into the major airliners radar again as a significant manufacturer for regional aircrafts. During the sass’s the company was able to launch new commercial and business aircrafts that positioned the company within the main worldwide manufacturers.
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After the economic turmoil of 2008 and 2009 the company also decided to diversify its activities to include security and surveillance services as well as an energy company, and also decided to engage in other relevant activities such as manufacturing helicopters under a license agreement. Currently the company disputes the position of third largest aircraft manufacturer in world with the Canadian company Bombardier. 1. 3. Marketing within Embrace. Examine the role and value of marketing within your chosen organization. 1. 3. 1 . How is the role of marketing viewed by the organization?
Marketing at Embrace took on a significant new role after the prevarication process in 1994. As the company needed to look forward to guarantee business continuity, all efforts were necessary to gain on a better market position by bringing the consumer market attention to its products and services. Over time, considering the increase in the product portfolio, ranging from all sort of jets and aircrafts to a broad range of services, the marketing group also needed to specialize in each end-market and therefore the group relevance increased accordingly inside the company.
Within the aircraft industry interaction with the clients varies extensively depending on the product application. The military market, for one, has a high level of restrictive rules and procedures that provide for the terms of engagement between the manufacturers and governments. On the opposite side, the business Jets market is much more aggressive when it moms to retain the attention of new prospective clients and interact with them. Several marketing activities are planned considering the location and the profile of the attendees of an event.
Currently, marketing has a well-established position in the company structure and is seeing as a key partner within the organization to determine the company strategy on developing products and services, as well as from a client care perspective. 1. 3. 2. Is the role and value of marketing viewed differently within different departments / functions of the organization? For international organizations, is it dewed differently within different strategic business units (Subs) in different countries?
As mentioned before, the set of products and services offered by the company reach very different profiles of end-markets. Commercial, Business and Military business units, Just to name the main business units, may be similar at some levels, but completely different on the market approach or even product development drivers. With so many variables to consider from planning a new product or structure a new service to a client care service, marketing is required to engage differently by each cuisines unit in the locations where it operates.
While the business Jet is more competitive and requires approaches from different angles, therefore more aggregated value from a marketing perspective is needed, the Military market usually does not require the same level of exposure or client interaction since such products are often developed as part of a government request and funding. Also, client demands across the regions could vary substantially and depending on cultural considerations, marketing may be more on high demand on a strategy on how to approach such market.
For example, on the business Jets sector, while clients coming from the Middle East are looking for aircrafts with range enough to fly non-stop from anywhere in such region to London, clients within the US could be looking for the operational capabilities of the same aircraft to operate in smaller land fields. Marketing approach to each market needs to consider the relevant elements to capture the client ‘s attention. 3. Has the role of marketing changed in your organization overtime?
Considering that until 1994 Embrace was a Public company, marketing was not an area getting to much interest or investments by management. Aircraft development depended much on the Brazilian government funding the operation, and the interest on positioning the company in the international market was not that enthusiastic at that time. It wasn’t until the company became privately own that marketing started to be seeing strategically, especially to determine how the company should position its products and services or where to head in terms of research and development.
It is important to highlight that the development of technology that allowed the company to become a serious player in the international air transportation market rising from a military endeavourer between the Brazilian manufacturer and the Italian government owned company Elena to develop the MAX military aircraft. As many of the technologies used in the civil aviation sector comes from military technology, it was only then that Embrace was able to develop the civil transportation aircrafts known as the ERG 135, ERG 140 and ERG-145 and really enter the market as serious manufacturer.
After being able to secure business continuity with the ERG family of aircrafts, it is possible to clearly identify the company’s different approach towards the marketing ole within the organization. 1. 3. 4. What is marketing’s contribution to effective business planning and decision making? How does it help the organization to achieve its objectives? After World War II ended, the approach on civil air transportation changed dramatically. Over time it became more and more accessible to the general public and aircraft manufacturers battled for a relatively small market of wealthy individuals.
Currently the market place changed completely and air transportation is much more accessible. This is particularly true to the business Jet market. On this perspective, marketing became one of the key partners to establish the company strategy and also see contribute through the implementation of such strategy. Within Embrace, the relevance of marketing in the decision making process is clearly identifiable by analyzing the investments made after the prevarication process, particularly on the business aviation market.
At first it was only a slight modification to one of the commercial aviation products (EMBED-135) to sell it to the exclusive business Jet market. Following market receptiveness to this new product and running more detail research on the market rends and customer needs, it became evident that there was room enough to retain new clients around the world not only by developing new different products, but also by increasing the level of utilization of the existing products.
By surpassing the point in which Embrace secured business continuity with the regional transportation aircrafts, Embrace made the decision of diversify its portfolio and become a serious player in the business Jet market. Taken the approach the company established towards the market, it is safe to assume that the decision was supported by a strategic market analysis that was allowed by setting the strategic marketing goals. The increase of the product portfolio on the late sass’s (Launch of Phenol family and increase of the Legacy family) also serves as evidence to support such assumption.
Clearly marketing is playing a significant role on allowing the company to diversify its products and services, reach new markets, build a strong reputation within the industry and marketplace and secure the continuity of the innovation processes and business endurance. 1. 3. 5. Consider the linkages between marketing and other organizational functions. Have any conflicts arisen between them? How have these been overcome? Peter Trucker (1999) once said that “Innovative products and services usually result from a conscious and purposeful search for innovation opportunities which are found only within a few situations.
The aircraft market is nothing but constant innovation on products and services. Based on such assumption, marketing activities are closely related to research and development, as well as production, operations and, of course, sales. At some instance it would be possible to state that part of the activities are driven by the marketing concept by creating value to the company’s customers. Embrace has a good pre-prevarication example about not addressing the marketing issues around a new aircraft development.
When both the Brazilian and Argentinean governments decided to Jointly exploit the development of a new civil transportation aircraft, the project was driven purely by innovation, without taking the marketing strategy into consideration. The outcome of such Joint endeavor was the development of EMBED 123. Considered one of the most advanced aircrafts of its time, it had troubleshooters as engines instead of the tribulations engines commonly used. This allowed several significant improvements in the aircraft, including passenger comfort.
Nevertheless, it had so much high-end technology that the expected sale cost, around USED 5 million, was excessively high to such a small aircraft at that time. This resulted in the program cancellation after only 2 prototypes being produced. This would be a clear example of having an innovation process that is not driven by market demand or in complete disregard of a marketing strategy from conception to sales. It is true that such innovative way of conduct a business could bring several positive outcomes, but scale product production would hardly be one of those, and cost likely such endeavor would cause business continuity to be compromised. . PART B 2. 1 . Examine two of the most significant trends / developments that have occurred over the past decade in the micromanagement that have affected your chosen organization. What challenges and / or opportunities have these created for your chosen organization? How has the organization responded? There were a few significant incidents and trends affecting the aircraft manufacturers over the past decade. Obviously, the aircraft manufacturers take a direct hit on the issues involving the airliners and, therefore, some of the trends and politeness mentioned above are related to both.
September 1 1, 2001 was a major event affecting the aircraft manufacturers and airline operators. Some argue that the terrorist attacks only evidenced the need for transformation in such market. The intention here is not to get into details on such arguments, but only on the facts affecting the industry. At the time the terrorist attacks took place the world was already facing signs of a weakening economy. Air transportation normally is one of the first segments that experience the adverse impact of an economical slowdown or turmoil as we experienced in the last few years.
At that stage, the airliners were already struggling to stay afloat. Rising fuel prices became a serious issue for the market and with the terrorist attacks, the financial situation only aggravated since demand for air traveling cooled off dramatically. As a result, the ability to make investments and to take on new financial commitments was seriously compromised and many of the aircraft manufacturers started to receive cancellations and postponements for new aircrafts, specially the high end aircrafts. As mentioned previously, the raise on fuel prices was an issue for at least the last 20 ears for the air transportation sector.
Manufacturers that were able to read the tendencies and acknowledge airliners claims to have more fuel efficient aircrafts were the ones that did not suffer as much in terms of sales as others that, either were not able to read the market trend or were unable to invest in such direction. Embrace released their brand new fuel-efficient regional aircrafts E-Jets 170 on 1999 and the first delivery was to US Airways on 2001. The timing was excellent for the company and Embrace was able to successfully reach new markets with this family of aircrafts, which was later on increased with the release of E-Jets 190 model on 2004.
After 2001 , the global economy managed to recover enough to allow the aviation market to create new opportunities within the air transportation market, mainly for the business Jets. A trend that started out on the late sass’s for a very exclusive market became not so exclusive anymore. With the increased air traffic, changes in the world climate, often causing inconvenient to air travelers, and the need to attend appointments on various schedules and time zones motivated several companies and individuals to fly n chartered aircraft or their own aircraft according to their convenience.
As revealed above, Embrace first entered the business Jet market on 2000, by implementing modification to an existing commercial aircraft produced by Embrace, the ERG-135, being able to transport 13 passengers. Until 2011, Embrace delivered 196 aircrafts of this model. The trend on business Jet aviation also pushed Embrace to develop new aircrafts, such as the Phenol family (Phenol 100 and Phenol 300) and part of the Legacy family (Legacy 450, Legacy 500, Legacy 600 and Legacy 650), as well as implement edification to their successful E-Jets platform (Lineage 1000) to a very high-end executive aviation business.
Of course the business Jets market was seriously affected by the economic turmoil of 2008/2009, in which several clients decided to either cancel their orders or postpone delivery of their aircrafts. The economic crises had a major impact on Embrace, forcing the company to lay-off over 4,000 employees of their existing 23,000. During such process the company identified opportunities to improve its manufacturing process as well as its administrative structure to support research, development and client care.
The main tools in which the company relied at the time were to go through a strong process of reviewing its mission statement and their set of cultural and organizational values that were to guide the company towards continuity and engage employees more intensively in the company’s operations. From a more practical stand point, the company decided to implement the Toyota method of production, and developed the PEE program. The Embrace Entrepreneurial Excellence Program had the purpose of establishing a set of lean initiatives.
The initiatives started out on reviewing the manufacture process and continue on to ACH business unit support staff. One of the interesting upsides of this set of changes was the implementation of the Good Idea Program that incentive employees to come up with new ideas to improve process and procedures within the company. Those with the best ideas (that either were to save money or time in a given process and some to prevent accidents and injuries) won prices ranging for small prices in cash, to movie and theatre tickets or dinner vouchers.
The follow-up on the implementation of the suggested ideas was interesting as it allowed all to see the positive financial outcome of such idea. Thousand of ideas were sent as suggestions. 2. 2. PART B (2) Examine the extent to which environmental scanning has enabled your chosen organization to identify / understand changes and developments in its marketing environment. How might the environmental scanning activities / process be improved? After 1994, when Embrace was privatized, the company approach on the market changed dramatically.
The company, that was used to produce according to the Brazilian government request, had to change orientation and read what the market was requiring in order to give the company a clear direction. After the prevarication process took place, the company reactivated the ERG 145 program and started to manufacture small regional aircrafts (up to 37 passengers) to the biggest regional aircraft market at the time. The U. S Market. The first delivery was made to Continental Express Airlines.
Afterwards, American Eagle, American Connection, Delta Connection, US Airways Express and United Express followed. The efforts on a single market orientation paid-off and enabled the company to keep moving forward. Nevertheless, at that time the airliners were already being pressured by increased fuel costs and a demand to be more cost efficient. If the airline industry was to compete with bus and train transportation for short haul travel, the existing low cost model, that relied basically on companies operating single class, old aircrafts from several manufacturers needed a change.
The cost efficient model was challenged and companies willing to have a low cost operation understood that to be competitive and truly low-cost they needed, new fuel efficient aircraft, from a single manufacturer (to bring costs on maintenance and staff training down), as well as keep aircraft utilization at the highest level (more flights within the operating schedule). In terms of products against market demand, Embrace was successful understanding the changes on the commercial aircraft transportation to develop and position its products efficiently.
While on the late sass’s Embrace heavily relied on the US market, by the sass’s they were able to level their market dependency between the IS the European and Asian markets. One clear example of Environmental Scanning process from Embrace, other major aircraft manufacturers is the yearly release of the Market following 20 years of the aviation sector. Such market outlook basically indicates the trend for certain types of a egging and also an estimation of demand for air transportation service Embrace business relies mainly in the regional aircraft market and the Market Outlook addresses intensively such market.