Home to Embraer, Brazil is the largest nation in South America and fifth largest in the world in both land area and population. Brazil has a population of 146 million with more than 15 million living in the Sao Paulo and Rio de Janeiro areas. Approximately 55 percent of all Brazilians are of Portuguese descent with 38 percent a mixture of several cultures. Around 6 percent of the population is of African decent. Portuguese is the official language, and although there is no official religion, about 90 percent of the population consider themselves Roman Catholics. Currently around 50 percent of the population of Brazil is younger than 20 years of age, and despite economic problems, Brazil has much potential to become a rich nation with its strong industrial, agricultural, and natural resource operations.
Workers in Brazil, like other areas of Latin America, hold a higher concern for rules, controls, and career security than in the USA or Europe. Brazilian society tends to be risk-adverse and reluctant to accept change, and this has contributed to a growing inequality between rich and poor in Brazil. However, the reluctance for change is complimented by a strong respect for tradition, including a strong work ethic. Employees believe in long-term rewards for a hard day’s work. New ideas or ways of doing business are often met with great skepticism in Brazil.
Brazilians dress formal at work with executives wearing three-piece suits and office workers often wearing two-piece suits. Women are expected to dress conservatively and have their nails well manicured. Appointments in Brazil should be made with at least two weeks notice; last-minute appointments with either businesses or government agencies should not be attempted. Although parts of Brazil may not be the most punctual in regard to meetings starting on time, meetings in Sao Paulo and Rio De Janerio are much like those in the USA or Europe because they start on time. However, even in these two cities, casual chit chat should start the meeting and only when the host moves to the business at hand should the conversation turn to more serious matters. It is also common courtesy to purchase lunch or dinner for a host but not to provide a gift.
In a market that some analysts consider to be a duopoly, the short-hop, narrow-body jets manufactured by Embraer have outsold those from Bombardier for nearly a decade. But Bombardier is not conceding ground, especially in its traditional North American stronghold. United Airlines and smaller rival US Airways are both expected to announce airplane purchases in 2013. Bombardier received a December 2012 order worth up to $3.29 billion from Delta Air Lines. That order almost matches Embraer’s deal worth up to $4 billion to supply the regional network of AMR Corp’s (AAMRQ.PK) American Airlines. More orders for somebody will follow soon because U.S. carriers need new short-haul planes, to the tune of 250 to 400 planes in the next 18 months. American Eagle already has a large mixed fleet of Embraers and Bombardiers, so neither suppliers has exclusive rights.
Bombardier’s market share in the regional-jet market has fallen below 30 percent, from 72 percent in 2003, but the company has a strategic plan to regain its dominance. Airlines are often hesitant to switch fleets from one supplier to another because additional training and maintenance costs can outweigh savings on the purchase. Unfortunately for Embraer, Delta, US Airways, and their regional flying partners already operate more Bombardier CRJs, whereas American and United and their partners use more Embraer jets. Embraer needs a clear strategic plan to maintain (or increase) its current market share. Perhaps Embraer needs to shift some focus to trying to supply firms such as Ryanair, Emirates, Singapore Air, and flydubai.