To sell or not to sell: Embraer’s dilemma

When I started studying Latin American companies 20 years ago, Embraer was one of the first case studies I published. The company was an example of what business schools’ faculty would call “reverse outsourcing.” While western companies outsource manufacturing to emerging markets, Embraer would design and assemble the planes in São José dos Campos, close to São Paulo, and outsource the manufacturing of parts to Europe and the U.S. The complex value chain worked extremely well. Embraer’s reverse outsourcing was taught in business schools, and my MBA students visiting the manufacturing facility would marvel at the technological might of this great Brazilian company. It was also an example of a worldclass innovation eco-system with the Instituto Tecnológico de Aeronáutica (ITA), […]

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