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De Beers and the Global Diamond Industry
The De Beers case study brings out a company that struggled to fit into the dynamics of the diamond market. The company enjoyed a satisfactory growth because the over sixty years that it made and controlled the supply of diamond. De Beers achieved this by adopting a number of manipulative strategies. These strategies included preventing smuggling of diamond, aligning all producers, and preventing stockpiling of diamonds. The focus of the company was to quash all the attempts of competition that may arise from all quarters. However, this strategy seemed not to work any longer after the new mining firms started selling their products through the open market and not through de Beers' Central Selling Organization (CSO). The new competitors were attempting to polish and cut diamond outside De Beers' value chain.
Question 2
Describe the key mechanisms De Beers used to manage the value chain in the past? Did De Beers increase profitability for all participants, and did it increase consumer satisfaction above the levels that might have existed without De Beers'...
The mechanisms that were employed in the past were manipulative in nature, for they were directed towards quashing all the efforts that new competitors who tried to enter the market tried to use. The mechanisms were geared to maintain a significant level of monopoly of the company in the global markets, and ensure that the diamonds that the company made were as scarce as possible. This was important for the company in sustaining itself at a time when other competitors were investing in the industry (Guerrera, 2000).
The core mechanisms that were used by the company include manipulating the market, prevent the smuggling of diamond, and prevent the stockpiling and buying of diamond. The mechanisms also ensured that substitutes like synthetic diamond were not in the market whilst quash the attempts of competition. On smuggling of diamond, the company attempted to prevent smuggling of diamonds, which is often accompanied by excess supply…
Reference
Guerrera, F. (2000). De Beers: All that Glitters is not Sold, Financial Times, July 11, 2000, p. 12.
This can only be accomplished by first focusing on the entire value chains' unmet needs, and given the monopolistic approaches of De Beers in this industry, channel partners and retailers will have many unmet process needs that once served could turn into a significant competitive advantage. The initial visits to each export market would need to be on a regular basis to build trust with each member of the
This process, however, should be enriched with additions that would turn it into a fair international scheme and enforced by additional bodies. Reference List Associated Press. 2004. De Beers Pleads Guilty in Price Fixing Case. July 13th edition, http://www.msnbc.msn.com/id/5431319/ Crossette, B. 2000. Report on Angola Sanctions is Challenged in the UN. The New York Times, March 16th Edition, http://www.globalpolicy.org/security/sanction/angola/report2.htm De Beers corporate website, Accessed March 09, http://www.debeersgroup.com/en/Sales-and-distribution/Best-Practice-Principles/ Global Witness. 1998. A Rough Trade: The
All of these factors then contribute to the complexity of hiring senior international positions, and underscore the HR issues that are going to cause difficulties in the hiring process. De Beers' recruiting process is going to have to focus on those professionals in critical skill gap positions that are accustomed to being in an industry that has complex ethical trade-offs that need to be made, yet has the necessary initiative
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