Case:

One of the longest-surviving online businesses in the world recently celebrated its 22nd anniversary. This business provides a unique online experience, and, at the same time, is attempting to change the world. No, the company is not Google, Facebook, eBay, or Amazon. It's Novica, an online retailer of beautiful handmade items from Brazil, Ghana, India, Indonesia, Mexico, Peru, and Thailand. Novica's founders were Armenia Nercessian de Oliveira, a Brazilian and longtime United Nations human rights worker; Roberto Milk, her son-in-law; and Roberto's brother, Andy. Roberto and Andy are sons of a Peace Corps volunteer.

Their business plan, launched in 1997, was based on direct sales between artisans in developing countries and customers in the United States. Together, the founders had lived in or traveled to dozens of countries, spoke several languages, and had strong management and financial experience. But despite their obvious qualifications, "everyone said it couldn't be done: simultaneously establish offices in countries all over the world, pay artists more than they have ever made before, and ship purchases directly to customers worldwide from countries all over the world with no U.S. warehousing," says de Oliveira. "But we did it! Novica.com [is now] the leading online world style marketplace."

Although some companies choose globalization to reduce costs or to respond to competitive pressure, Novica is more concerned about building global communities that share products and ideas. The main goal of Novica is not "merely selling products," de Oliveira emphasizes. "We are actively working to disseminate cultures and restore the importance and appreciation of traditional cultures and skills." Moreover, it is important for the company that both cultures benefit and are not harmed by the exchange. "Novica has broken down the traditional international barriers to direct trade between individuals," says Catherine Ryan, Novica's vice president for communications. "Our goal is to help usher in a second, positive era of globalization that moves away from both the consolidation of the marketplace and the homogenization of culture."

Novica's business model shows a close fit with the cultural characteristics of both the United States and developing nations. Americans tend to want to buy luxury goods for themselves and their homes. They often prefer objects that are unique and handcrafted to ones that are mass produced. In parallel fashion, individuals from developing nations and traditional cultures often like to work with family and friends, typically from home or in a small organization. All of these preferences are supported by Novica.

Although Novica was already succeeding, the firm gained new financial strength and marketing support when National Geographic bought a minority stake in the company in 2001. Today more than 11,500 artists are featured and thousands of others are employed. "Novica is all about promoting artisans as individuals and increasing appreciation of all cultureson a tremendous scale," notes Ryan. Her employer provides an online marketplace to connect artists in developing countries with buyers in the United States. Novica is unique among sellers of international art in sustaining global culture by opening direct lines of communication and trade among a diverse group of individuals. The company's website gives clues to the diverse characteristics, motivations, and values of the artisans and buyers.

Artist biographies and detailed product information encourage cultural awareness. Pravakar Das, from Puri in India, explains his traditional Hindu temple paintings. "Patachitra painting originated thousands of years ago to adorn the temple of Lord Jagarnath, another name for Krishna.... [They are used in] the Jagarnath Mandir festival, where thousands of devotees offer their prayers."

Neide Ambrosio crochets soda can tops she finds discarded on Brazil's beaches into purses and belts. "Novica encouraged my creativity," she says. "I realized myself as a person. My quality of life improved.... I now offer employment to ten young girls from favelas.... It's also a good way for me to keep Brazil clean and unpolluted." Ambrosio adds, "I feel so glad every time I read what my clients tell me. It is so motivating!"

A letter from customer Jeane Vogel tells about her bond with the artist who created the jewelry she purchased from Novica. "Rajan made me feel as if I were his cherished friend.... He included a hand-written notein two languages. I felt quite beloved.... He connects in a very personal way with the recipient of his art."

Many Novica artisans can now afford to own their own homes, buy computers, or send children to college, unheard-of luxuries for much of the population in developing regions. Even more important than financial gain, according to de Oliveira, are the social benefits. "Beyond business and the economic improvement of artisans, we are also and mainly talking about dignity, about pride, about the international recognition of extraordinary work.... We're succeeding in transmitting human energy along with each item that is sold through us."

Your response must address the questions asked (Visit www.novica.com and www.unilever.com. Compare and contrast the two sites in terms of their marketing effectiveness. What does this case illustrate about the trade-offs between economic and social benefits in international business?)

You can elaborate on the comment, provide an explanation to help a fellow student, or present a point of debate.

You can agree or disagree with whatever has already been stated in the thread, as long as you back up your statement.

Here is what you need to respond to:

17.

There are some distinct similarities between the Novica and Unilever website. First off, both companies they are doing a great job explaining the companies' missions and what they stand for. Right off the bat, visitors to the companies' websites are able to ascertain what is important to these companies. Another similarity in the two companies is that they both tout global reach; Novica partners with local artisans across the globe to market their traditional pieces, while Unilever owns over 400 brands that are sold in 190 countries. A third similarity between these websites is their design; both are colorful, informative, and clearly updated. As global companies, they are doing a good job in curating their online presence as this is where many global companies are accessed by customers.

Although these two sites have quite a few similarities, there are some differences between the two. Content and information is the first difference between Unilever and Novica's sites; Unilever highlights share prices, market reach, and brand names owned by the company, while Novica's home page is focused more on their mission to bring traditional artisans to the global stage. Another difference between the two sites, is that Unilever's talks about innovation and new technology, whereas the Novica website is focused on tradition of culture. Lastly, the ideology of the two websites seems to be on polar opposite ends of the spectrum. Novica aims to move away from market homogenization and focus on the individuality of different cultures through promotion of their artisans; Unilever aims to spread their brands across the globe, and provide every market with the ability to access their standardized goods.

18.

The Novica Case illustrates multiple trade-offs between economic and social benefits in international business. First, Novica's commitment to paying artisans for their custom artwork and promoting traditional cultures provides artisan's with increased income and and financial stability, as well as gives them an opportunity to continue traditional artwork. The trade-off for promoting and marketing this type of specialized artwork could be the fact that this specialization drives a higher price point compared to mass-produced pieces. This higher price point could potentially limit the company's customer base to those who value the cultural authenticity that these artisan's produce, and who are willing to pay a premium for their artwork and goods.

Another trade-off is that while Novica focuses on cultural preservation and uniqueness, and moves away from market consolidation and homogenization, they lose the ability to scale and mass produce products. This trade-off allows for artisans to produce and sell traditional work from their respective cultures, but in turn this specialization reduces the amount of product produced and could limit the affected market, as well as potential reduction in profits.