Research Business for Venezuela

Jason Herndon

Unit 4 IP BUS230

September 15, 2007

Instructor: David Cramer

Venepal Saca is a business that manufactures and distributes wood and paper products. Since Venezuela has become an associate member of MERCOSUR in 2001, we must make adaptations to the way that we conduct business as well as our products. The benefits and drawbacks for our business will need to be research because of the new adaptations from becoming a member of MERCOSUR. Finally, we need to discover what changes that we would need to make in our business dealings from these adaptations.

Venezuela was one of three countries that emerged from the collapse of Gran Columbia in 1830. For most of the first half of the 20th century, Venezuela was ruled generally by benevolent military strongmen, who promoted the oil industry and allowed for some social reforms. Democratically elected governments have been held sway since 1959 because of this stronghold from these military groups that controlled the country. (CIA World Fact Book).

MERCOSUR was created in March 1991, by Argentina, Brazil, Paraguay, and Uruguay, comprising of about 200 million and with a combined GDP of about $850 billion (Wild, Wild, Han, 2006). MERCOSUR is the third largest integrated multinational market after NAFTA and the EU. MERCOSUR currently functions as a customs union providing for free trading area and also for the establishment of a common external tariff. MERCOSUR countries are committed to coordination of macroeconomic policies and agree to create a common foreign trade policy. Unlike NAFTA, MERCOSUR does not contain agreements on government procurement and intellectual property rights.

            When conducting business with Venezuela we need to remember that they have a considerably different way of conducting business. We need gain their trust, as Venezuelans are risk adverse so it is important they do business with people they know and trust. Do not...