Get Full Essay Get access to this section to get all help you need with your essay and educational issues. Debeers Diamond Dillema Essay Sample 1. Debeers is looking at provision of this product at all phases of the value chain Traditional: To still focus on the production and sale of natural diamonds to service that existing portion of the market.
One hundred fifty million carats of mined diamonds are produced every year, so they are really not that special if you look at those terms. Being the romantic he was, Lee wanted to pop the question over a candle light dinner that included an exceptional bottle of Bordeaux.
Logistical details of where to buy the special ring and what type of diamond, however, were less certain in his mind.
Lee and Diane had recently rented the movie Blood Diamond, set in Sierra Leone in the s when a civil war was raging and the rebel group, the Revolutionary United Front, relied on proceeds from smuggled diamonds to finance its military operation.
The year war, which ended inresulted in the deaths of tens of thousands and the displacement of more than 2 million people, nearly one-third of the country's population. Both Diane and Lee had been disturbed by the story the movie told, the hardship and violence, the children who were forcibly recruited to fight, and the lives that were destroyed all over gems that were worn by hundreds of millions of people, men and women alike, throughout the world.
As he thought about his options, Lee recalled a magazine article he had recently read about the growing market for synthetic diamonds.
The article described the process by which diamonds could be grown in a laboratory environment, far from the war torn lands of Africa. Chemically, lab-grown diamonds were identical to diamonds that were extracted from the ground. Instead of taking millions or billions of years to form, hundreds of miles underground, however, a laboratory environment could produce a flawless diamond within days.
Lee was starting to think that a synthetic diamond was a great alternative.
But how would Diane react upon learning he had bought her a diamond that was made in a laboratory just outside of Boston? For producers of synthetic diamonds, it was consumers like Lee Mandell that proved there was a market demand for an alternative to the natural diamond.
But for South Africa-based DeBeers, which up until the late s single-handedly controlled the world's supply of diamonds, Lee's rationale was misguided and he was giving his girlfriend nothing more than costume jewelry.
Nevertheless, the fact of the matter was that people were buying lab-produced diamonds and the number doing so was growing at a faster rate than those buying those extracted from the ground.
The dilemma that DeBeers faced came down to whether it should enter the market with its own synthetic diamonds or whether it should have faith that synthetics would be a passing fad and that, at the end of the day, consumers would always prefer buying what, in DeBeers's mind, was the real thing.
Complicating the company's dilemma, however, was the fact that it was in the midst of trying to remake its image, tarnished from decades of anti-competitive business practices, to one that was demand driven and focused on brand development. If so, what should DeBeers's response be, if any?
The Diamond Industry Natural diamonds, the hardest, most transparent material in existence, were made of carbon atoms that over the course of millions of years and with tremendous heat and pressure deep under the earth's surface bonded into a cubic structure.
As one diamond trader explained, "When you talk about commodities, you know that a ton of copper is worth this much, and an ounce of gold is worth this much because they are homogenous.
But diamonds are not homogenous. Figure 2Diamond Rough Prices, Source: While the Congo and Australia were significant producers on a volume basis, the value of their production was quite low. Angola presented the reverse scenario. InNamibia inserted a clause in a new law permitting the government to force miners to sell a percentage of their diamonds to local polishers, 9 and inLev Leviev, an Israeli of Uzbek decent who was one of Israel's largest manufacturers of polished stones, opened the country's first cutting and polishing factory.
At the opening of the new factory, Namibia's president was quoted as saying, "To our brothers and sisters of neighboring states, Angola, Botswana, South Africa, I hope that this gives you inspiration to try to imitate what we have here.
Under the new legislation, scheduled to take effect inproducers would be hit with duties on exported rough diamonds. Why are Indians cutting African diamonds? InAber Diamond, a Canadian mining group, purchased U. Retail clearly adds value.
But there are several different kinds of know-how involved in the different levels of the chain and you have to respect, and learn, all of them.
Figure 4World Sales of Diamonds, polished wholesale price Source: While at one time the diamond industry was supply-side driven, with little attention given to the end consumer, by the late s the industry began focusing more on the demand side.
The main catalyst for this shift was DeBeers's decision to conduct business in a whole new way. Its market dominance enabled its Central Selling Organization to choose whom to sell to, how much to sell, and at what price. Buyers who turned down an offer to purchase a parcel of diamonds might not be invited to purchase from DeBeers again.
Meanwhile, buyers who strayed from DeBeers's selling arm and purchased directly from a mine would be dropped by the company or financially punished.Debeers Diamond Dillema Essay Sample.
1. VISION STATEMENT To be the world’s leading provider of traditional and quality diamonds. Justification. Read this essay on Debeers Diamond Dilemma.
Come browse our large digital warehouse of free sample essays.
Get the knowledge you need in order to pass your classes and more. Only at rutadeltambor.com". The dilemma that DeBeers faced came down to whether it should enter the market with its own synthetic diamonds or whether it should have faith that synthetics would be a passing fad and that, at the end of the day, consumers would always prefer buying what, in DeBeers's mind, was the real thing.
Diamond, it is a precious stone more value than gold and silver. Its first discovery was in the year in South Africa at Northern Cape.
From then, Diamonds became very much famous by the enhancement in the supply as well as the advanced technology which enabled the Diamond cutting, shaping. April 11, DeBeers Consolidated Mines Ltd. 1st POV Situation: DeBeers Consolidated Mines Limited (DBCM) occupies a major presence in the diamond industry.
Discoveries of diamonds in the late s were pioneered in South Africa, in which DeBeers held a heavy monopoly over. The De Beers Group of Companies commonly known as De Beers is a leading organization in the exploration, mining, retail, as well industrial manufacture of diamond.
The organization’s vision and values underpin the way the organization operates making them vital to the success of the organization.