[go: up one dir, main page]
Scribd
Upload
607 views14 pages

De Beers' Strategic Evolution

De Beers was founded in 1888 and controlled over 90% of the world's diamond production through monopolistic practices in the 20th century. However, changing market dynamics and regulations caused them to transition from a supply-controlled model to a demand-driven strategy focused on stimulating demand. Their current strategies include cost leadership in mining through process efficiency, product differentiation by branding and special cuts/polishing, and vertical integration across mining, distribution, and marketing.

Uploaded by

srikanth2309
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
607 views14 pages

De Beers' Strategic Evolution

De Beers was founded in 1888 and controlled over 90% of the world's diamond production through monopolistic practices in the 20th century. However, changing market dynamics and regulations caused them to transition from a supply-controlled model to a demand-driven strategy focused on stimulating demand. Their current strategies include cost leadership in mining through process efficiency, product differentiation by branding and special cuts/polishing, and vertical integration across mining, distribution, and marketing.

Uploaded by

srikanth2309
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 14

A look into De Beers’

Strategies
Presented by
Srikanth Kumar. T
Sonu. T. Sekharan
Introduction
• Founded by Cecil Rhodes in the year 1888
• Controlled over 90% of world’s diamond
production.
• Headquarters – Johannesburg, SA
• De Beers family of companies
• Diamond Mining
• Diamond Trading
• Industrial Diamond manufacturing
• Leader in Diamond Market with 40% Share
Introduction
• Founded by Cecil Rhodes in 1888
• Johannesburg, SA
• Largest company & World Leader
• Active in every category of industrial diamond mining
• US $6.8 billion (2009)
• Approx. 20,000 employees
Monopoly
• Monopolistic practices throughout 20th
century
• International diamond market
manipulation
• Single channel monopoly
• “Central Selling Organization” - DTC
• Stockpiled diamonds
• Supply controlled business model
End of Monopoly
• Need for change of business model
identified
• Supply controlled model no longer viable
• Changing consumer behavior & market
dynamics
• Shift towards other luxury goods
• “Blood Diamonds” taint
• Legal & stricter govt regulations
Change of Strategy
• Strategic review – Bain & Co.
• Transition from supply controlled business
model to demand driven
• “Supplier of Choice” program
• Focus on stimulating or driving demand
•  De Beers’ Best Practice Principles
• Business responsibilities
• Social responsibilities
• Environmental responsibilities
Layers of Business Environment

THE
ORGANIZATION

Competitors,
Markets

Industry

The Macro-
Environment
(PESTEL)
Business Level Strategies

Achieving competitive
advantage
-Sustainability
-Hyper-competition
-Collaboration
-Game Theory

Bases of competition
-Price SBU Detailed
Detailed choices
choices
-Differentiation
strategies -Direction
-Direction
-Hybrid -Methods
-Methods
-Focus
Sustaining competitive
advantage

Differentiation
-Creating difficulties of
imitation
-Imperfect mobility

Lock-In
Lock-In
Price based strategies
-Achieve
-Achieve size/market
size/market
-Win a price war dominance
dominance
- Focus on customer -first
-first mover
mover advantage
advantage
segment
-rigorous
-rigorous enforcement
enforcement

Sustaining
competitive
advantage
Business Level Strategies
• First Level in the value chain
• Commodity like market
• Focused cost leadership strategy
• Concentration on
• Process efficiency
• Total Quality Management
• Security Measures
• Focus on Cost Leadership
• Directly selling to its subsidiaries
• Fortifies barriers of entry for competitors
Business Level Strategies
• The Diamond Trading Company
• Differentiation Strategy
• Branding ‘FOREVERMARK’
• Cut/Polished by special “DIAMANTAIRE’
• Sold directly to pre selected ‘SIGHT HOLDERS’
• Pull Demand from end consumers

Long Term Sustainability?


 Diamond based on perceived utility
 Low cost competitors
 Fashion Trends
Corporate Strategies
• Low pressure for local responsiveness
• Abundant Raw material availability
• High Cost pressures
• Increase in competition
• Lack of better mining techniques
Corporate Strategies
• Vertical Integration
• Mining
• Acquisition of new mines and established mines
that are a threat
• Distribution
• DTC
• Sight Holders
• Marketing
• Branding diamonds
• Campaigns to convince customers that they are
essential
• Forward integration – 500 stores by 2010

You might also like