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Read CLOSING CASE: Novica Opens Doors Across National Boundaries first and answers the questions 17 and 18 at the end of the case. Please use correct grammar and complete sentence. Thank you.

17. Visit novica.com and unilever.com. Compare and contrast the two sites in terms of their marketing effectiveness.

18. What does this case illustrate about the trade-offs between economic and social benefits in international business?

CLOSING CASE: Novica Opens Doors Across National Boundaries
One of the longest-surviving online businesses in the world recently celebrated its 16th
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 23-year-old 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 a number of 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 cultures—on 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 note—in 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.”
17. Visit novica.com and unilever.com. Compare and contrast
the two sites in terms of their marketing effectiveness.
18. What does this case illustrate about the trade-offs between
economic and social benefits in international business?

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