[A Strategic audit on De BEErs and the current diamond industry]

by

Acknowledgement

Iwould take this opening to express gratitude my study supervisor, family and associates for their support and guidance without which this study would not have been possible.

DECLARATION

I, [type your full first titles and last name here], declare that the contents of this dissertation/thesis comprise my own unaided work, and that the dissertation/thesis has not previously been submitted for learned written test in the direction of any qualification. Furthermore, it comprises my own opinions and not inevitably those of the University.

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Abstract

This paper presents a strategic audit analysis of DeBeers, the leading firm in diamond manufacturing and exports. This paper will focus on strategic and strategic perspectives of the diamond industry. This dissertation will also highlight the current standing of diamond industry. In documenting De Beers' strategy, the notion that the limited theory on implementing a market orientation is or is not reflected in practice will be explored. The suitability of the market orientation paradigm as outlined in the literature was also evaluated. The aim is to confirm features of the theory of market orientation rather than to document new aspects of this construct. The first chapter provides introduction to the topic, followed by the review of relevant literature in the second chapter. Further discussion on strategic analysis was covered in the third chapter. The fourth chapter covers the strategic analysis of DeBeers. The fifth chapter presents an outlook to the future while the sixth chapter concludes the paper, providing recommendations and implications.



Table of Contents

ABSTRACTIV

CHAPTER 1: INTRODUCTION1

Background of the Study1

Purpose of the Study2

Problem Statement3

Objectives of the Study3

Rationale of the Study4

Significance of the Study6

CHAPTER 2: DIAMONDS - OVERVIEW7

History of Diamonds7

Early Diamond Trade9

The Prominence of Jewish Families in Diamond Trading9

The increase of De Beers10

Diamond output and trading Today11

Biggest Diamond Consumers11

CHAPTER 3: THE GLOBAL DIAMOND INDUSTRY13

Strategic Audit for Diamond Industry13

The DeBeers Monopoly16

A Diamond is forever16

The DeBeer Marketing Rules17

The DeBeers Monopoly Coming to an End17

PEST Analysis17

Challenges20

Stakeholders22

Porter's Five Forces Analysis23

Rivalry among Competing Firms23

Potential Entry of New Competitors24

Potential Entry of alternate Products24

Bargaining Power of Suppliers24

Bargaining Power of Consumers25

Factor conditions25

Demand conditions26

Implications of Globalisation27

Economic, Social and ecological Issues28

Corporate Responsibility & Ethical demeanour in the Industry29

Issues Management Process30

Identification of Issues31

Ranking or Prioritizing Issues32

Formulating the Issues Response32

Monitoring and assessing the matters Response33

CHAPTER 4: THE DE BEERS GROUP34

A Central Selling Organization35

The Birth of a Tagline35

Market Development37

The Industry's First Marketer37

The Modern-Day Marketer38

Competitor Analysis39

Rio Tinto Ltd39

BHP Biliton40

Synthetic Diamonds41

Supplier of alternative: An Alternate conduit Strategy41

De Beers and LVMH42

New Sightholders43

DTC on the Internet44

Current Issues45

CHAPTER 5: THE FUTURE AHEAD46

CHAPTER 6: CONCLUSION50

Recommended Solutions and Implementation Steps51

Further research directions52

Conclusion53

REFERENCES56

APPENDIX66

Strategic Audit on De Beers and the Current Diamond Industry

Chapter 1: Introduction

 

Background of the Study

De Beers is a privately-held company that is engaged in diverse diamond-related undertakings for example uneven diamond investigation, diamond excavation and diamond-trading. De Beers performed several strenuous undertakings to eradicate risks on the steadiness of their monopoly and to double-check a market-leader status.

In 1888 De Beers Consolidated Mines Limited was established. This company set about managing what numerous would have considered ...