Changes In Business Plan Due To Venezuelas Accession To Mercosur Essay

Changes In air Plan Due To Venezuelas Accession To Mercosur - Essay ExampleThis business plan will look at the response of a deep brown manufacturer as a result of Venezuelas acceptance as blighter member in Mercosur. The first part will look at the benefits and drawbacks of the acceptance to the whole country. The undermentioned section will be looking to a greater extent closely at the micro level by examining the results of Venezuelas accession to a local java manufacturer.Venezuela is expected by other MERCOSUR member nations to make unfathomable contribution to MERCOSUR in the economic, commercial, cultural and political fields (Bolduc 2006). Venezuela is currently one of the largest producer and exporter of oil globally. It should be noted that the petroleum industry accounts for some one third of the countrys gross domestic product and almost 80% of export r tear downue (Venezuela 2006). The trading partners of Venezuela will gain from the companys resources. It should be noted that MERCOSURs goal is the reducing of trade barriers between member nations. Thus, Venezuela is expected to lower its tariff on oil which will hitch up the demand for its commodity. However, doing so will reduce the revenue of the government in the form of tariffs collected.It can be seen that the acceptance of Venezuela will facilitate the inflow and outflow of goods as trade barriers are reduced and even eliminated. Venezuela will enjoy the influx of lower priced commodities from its trading partners like Brazil. For instance, it should be noted that in arrangement to support the higher demand for poultry products in the local market, Venezuela imports a huge portion of its poultry supply from Brazil. Trade liberalization also brings in more choices for local customers. The inflow of commodities is expected to demonstrate a higher level of utility to Venezuelans. However, trade liberalization is a double edged sword. deflection from providing the aforementioned ben efits, trade liberalization can also harm the local industry as it creates more intense competition in the market. It can be seen that the flow of more competitive commodities from its trading partners local manufacturers by capturing their current market. For instance, lower priced bags from Argentina can easily capture the price sensitive component in Venezuela to the detriment of the local bag manufacturers.Changes in Business PlanFrom being one of the highest coffee producers in the world, Venezuelas coffee production now slumped to only 1% of the worlds total. This, together with the inefficiencies in the agricultural heavens makes the prices of coffee beans to skyrocket. It should be noted tat Venezuela has been experiencing shortage of manufactured coffee in supermarkets and specialty shops because of the super high prices (Morsbach 2006).The acceptance of Venezuela in the MERCOSUR posts challenges and opportunities for a local manufacturing industry. It should be noted th at the high price of coffee beans exacerbated by production inefficiencies disable local coffee manufacturers to produce higher quality and more competitively priced commodities. With the trade liberalization, coffee manufacturers can now source their coffee beans from other coffee producing countries like Brazil. It should be not