When Gabriel appears to Mary in Luke 1, he tells her that her son is to be named “Jesus”, which means “God is Salvation.” Jesus’ birth also fulfilled the words of Isaiah, who said, “‘Behold, the virgin shall conceive and bear a son, and they shall call his name Immanuel' (which means, God with us)” (Mt. 1:23). These two names are significant because they indicate that God has taken on flesh and has come to live on earth for the purpose of accomplishing our salvation.
Believer’s often fail to focus on the significance of this event. According to J.I. Packer, “The Incarnation…makes sense of everything else that the New Testament contains” (54). He also says, “The crucial significance of the cradle at Bethlehem lies in its place in the sequence of steps down that led the Son of God to the cross of Calvary, and we do not understand it till we see it in this context” (58).
It is also important to mention that Jesus’ arrival on earth was not an unanticipated occurrence, but the fulfillment of numerous prophesies throughout the Old Testament (Gen. 3:15, Isa. 7:14, 53, Micah 5:2 etc.). The Incarnation was not a result of the Father acting on impulse or executing a “plan B.” There is what theologians call “The Covenant of Redemption,” which took place in eternity past that speaks of the agreement between the Father, Son, and Holy Spirit that the Son would take on flesh and be our representative, perfectly obeying the father on our account and paying the penalty for sin that we deserve. According to Wayne Grudem,
“On the part of the Son, there was an (eternal) agreement that he would come into the world as a man and live as a man under the Mosaic law (Gal. 4:4; Heb. 2:14-18), and that he would be perfectly obedient to all the command of the Father (Heb. 10:7-9), becoming obedient unto death, even death on a cross (Phil. 2:8). The Son also agreed that he would gather for himself a people in order that none whom the Father had given him would be lost (John 17:12)” (518).Grudem, Wayne. Systematic Theology. Grand Rapids: Zondervan. 1994. 518
Packer, J.I. Knowing God. Downers Grove: InterVarsity Press. 1993. 54-58.