Question
I need help with the following questions in regards to the case study found at the bottom: Examine the main benefits of importing products to
I need help with the following questions in regards to the case study found at the bottom:
- Examine the main benefits of importing products to be used in products of other goods. Present examples of the benefits.
- Explain the sustainability of a company like Embraer if it neither exported nor imported products.
- Examine the benefits and concerns that can occur when countries use protectionist policies in trade.
- Examine whether Embraer should have more of the over 300,000 parts for its planes produced by Brazillian Manuafacturers or should the company continue to pursue outsourcing. Keep in mind the need to establish as manay competitive advantages as possible.
- Analyze the impact that government subsidies could have on Embraer's international competitive ability.
Embraer is a Brazilian company that manufactures commercial, military, executive, and agricultural aircraft and provides aeronautical services. It is headquartered in So Jos dos Campos, So Paulo State, in Brazil. Importantly, Embraer is the fourth-largest airplane manufacturer in the world, and its imports of various raw material and component parts to Brazil to manufacture its airplanes make up slightly more than 1 percent of the Brazilian trade balance with all other countries, which is a relatively large portion of the Brazilian economy for just one importer. Embraer has consistently been one of the top importers in Brazil since its founding in 1969. Today, the company has about 20,000 employees from 20 countries, revenue of more than R$20 billion Brazilian real (BRL) or about $6 billion U.S. dollars, and more than $300 million in net income. The company consists of three primary divisions: Embraer Defense and Security, Embraer Commercial Aviation, and Embraer Executive Jets. Across these divisions, the output is impressive. Embraer has served more than 90 airlines in more than 60 countries and delivered more than 5,000 aircraft to this clientele. To be able to produce that many aircraft and achieve a top-four position in its industry, Embraer has to import a lot of raw materials and component parts to Brazil to build the aircraft at the company's main locations at its headquarters in So Jos dos Campos, as well as its other core plants in Brazil in Botucatu, Eugnio de Melo, and Gavio Peixoto. Some of these component parts are, in reality, finished products that are then inserted into the planes in a certain position, such as the PurePower Geared Turbofan engines from Pratt & Whitney to power its E-Jets. Embraer also collaborates with some of its competitors in the industry, such as Boeing, in building its stretch civilian model of the KC-390 military transport/aerial refueler. The list of suppliers to Embraer's operations is lengthy, with partnerships with Honeywell, Saab, UTC Aerospace, SNC, Flight Safety International, Goodrich, Eaton, Thales, Sierra, and Air France Industries, to mention some of the company's top suppliers. But, the complete list of suppliers needed for Embraer planes is incredibly lengthyeven lengthier than most car manufacturers, which have a reputation for using a lot of suppliers (e.g., some 50,000 in the case of General Motors). Though the number of suppliers for Embraeror any aircraft manufactureris somewhat fluid, we can certainly put the number of parts used at more than 300,000. This places incredibly pressure on operating an efficient and effective global supply chain system and, most importantly, a well-structured importing operation into Brazil. Importing into Brazil, some would say, is a difficult task for most companies and product categories. At the consumer product level, it was almost impossible to find imported products in Brazil before 1990. The Brazilian government used a number of protectionist measures and high taxes to discourage importing of products. Briberies of officials that can facilitate the importing process is normal. Adding to the importing difficulty, the World Bank considers Brazil to be one of the most difficult places to start a business. Brazil's tax system has also been ranked as one of the most complex worldwide by analysts at PwC."
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