Dynamic Capabilities and the Evolution of Embraer in the Aerospace Industry

The tenth chapter, “Dynamic capability and Embraer” by Reiko Takenouchi examines the relationship between dynamic capabilities and core competencies of companies. Both categories extend the resource-based view of the firm and are crucial for achieving sustainable competitive advantage due to their durability and universality. In the context of rapid changes in the business environment and increasing difficulty in forecasting these changes, the importance of adaptability based on both categories is growing. This study presents empirical analysis of Embraer, a leading Brazilian aircraft manufacturer, as a case study to demonstrate the impact of dynamic capabilities on the creation of core competencies. This study analyzes the growth mechanisms of Embraer from the perspective of Dynamic Capability Theory. It examines Embraer’s development across four phases: inception (1969–1994), transition/privatization (1994–1997), growth (1998–2004), and maturity (2006–present). The study finds that Embraer successfully leveraged the dynamic capabilities of sensing market opportunities, seizing those opportunities through strategic initiatives, and transforming its operations to adapt to changing environments. Embraer’s key success factors include entrepreneurial leadership, strategic partnerships, product diversification, and technological innovation. The company effectively transitioned from a state-owned enterprise to a competitive private firm and became a leader in the regional jet market. However, Embraer continues to face challenges, including economic uncertainty, increasing competition, and the need for continuous technological advancement. The study concludes that Embraer’s ability to sustain and enhance its dynamic capabilities will be crucial for maintaining its competitiveness in the evolving global aerospace industry. These findings provide insights into how emerging market firms can successfully compete in high-technology sectors.