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  • Essay / DeBeers Diamonds - 819

    Cate Reavis prepared the case study on which this study is based, under the supervision of Professor David McAdams. It was published in MITSloan management review in January 2008. The article examines how DeBeers became a superpower in the diamond trade in the 1900s. How this position was challenged in the late 1990s and how DeBeers used key strategic management tools to overcome these challenges and become the superpower it once was. Founded in the 1880s, DeBeers has grown to become the world's largest diamond mining and trading company. When DeBeers was founded, it controlled approximately 45% of the world's diamond production and sold more than 80% of all diamonds produced. DeBeers used underhanded tactics to suppress small diamond mines and punish those who attempted to break away from the DeBeers "empire." DeBeers had the purchasing power to control more than 80% of all diamonds mined. Through cleaver strategic planning, they also controlled most of the diamond cutting and polishing industry. With the introduction of synthetic diamonds and changing government regulations, DeBeers was losing control. DeBeers who had controlled the diamond market for almost a hundred years. The case study will examine how DeBeers used key strategic tools to breathe new life into the company and grow it back into the biggest and best in the world. To examine how DeBeers has changed, the article should be examined using some key strategic tools, including Porters 5 Forces, the Four Ps of Marketing, and PESTEL. Porters 5 Forces. One of the main findings presented in the article is how DeBeers used the theory provided in Porters 5 force to succeed. This theory is based on the concept that there are five forces that determine how competitive DeBeers has become. By excluding DeBeers from the process, buyers were able to negotiate better prices from suppliers. Force 5 of competitive rivalry. So far, competitive rivalry has not been very significant for DeBeers since it has been able to control the supply of diamonds by purchasing 80% of all diamonds produced. . However, due to pressure from governments and also the desire of producers and retailers to break this monopoly, DeBeers now faces fierce competition in the market. DeBeers had to brand itself differently and provide diamonds of a certain quality to its customers rather than having to buy what DeBeers offered them. It must now set the price of diamonds based on the market rather than controlling the supply of diamonds as it did before. They had to increase their marketing and focus more on the customer in order to find a niche in the market..