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    Develop a business plan for Fabuloso Textiles as it becomes a member of MERCOSUR

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    As a Venezuelan business owner (Fabuloso Textiles), you are very interested in the fact that Venezuela has recently been accepted as an associate member of MERCOSUR (July, 2004). You need to prepare your operations in view of this new reality.

    Develop a plan for your business that will be implemented as Venezuela becomes part of MERCOSUR. Your business plan should include the following:

    Benefits and drawbacks for the country of Venezuela as a result of their membership in MERCOSUR
    Benefits and drawbacks for your business as a result of their membership in MERCOSUR
    What adjustments will need to be made to your business as a result of this?

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    Solution Preview

    Benefits and drawbacks for the country of Venezuela as a result of their membership in MERCOSUR
    Benefits and drawbacks for your business as a result of their membership in MERCOSUR
    (Please note as both the questions are identical I am combining the solution also).

    Business plan development: benefits and drawback of Venezuela being a member of the MERCOSUR.

    Mercosur had originally four founding members: Argentina, Brazil, Uruguay and Paraguay. It was formed under a treaty of Asuncion on 27, March 1991. Later as per agreed formula called The Economic Complementary Agreement Bolivia joined in 1995, Chile, 1996 and Peru 2003.

    The development of any business will have to be planned on the lines of existing systems of cooperatives that are managing the ventures with the participation of the workers. The old system of having a Boss will no more prevail.

    The point becomes aptly clear from the statement of Jose Abelli, a co-founder of Argentine's National Movement of Recuperated Businesses "We, the workers began to say, the buildings are here, the machines are here, and so are the workers. The only thing missing is the boss. Let's continue to produce, and that's what we did."

    In other words any business coming up must align with this kind of attitude and philosophy. What he failed to realize that main motive force CAPITAL is absent. Capital will come from investment. Why should any businessman invest when there is no security of the Capital or return from it? What incentive he will have for investing?

    The landless workers and producers formed cooperatives in Brazil to sell reasonably priced products through Agrarian Reform Stores to support their struggle for land reform.

    The only recourse will be funding from the government which again is solely dependent on oil revenue. Those who have political connections will be reaping the benefits of the governmental aid or subsidy. The matter should be viewed in the light of the fact that right wingers have more power than the party which actually cares for the workers and labors.

    Not only that, cooperation of other units will be necessary for survival and growth. Textile industries are facing bad days and are closing. The import tariff being lower exports from China and Vietnam are catching up and giving uneconomically tough competition to the local industries.

    Benefits:

    Venezuela's entry in the Mercosur should be ...

    $2.19