De BeersA young English boy's failing health caused his family to send him to South Africa in the hope that the warm climate would improve his ailing health. In the late 19th century, Cecil John Rhodes joined his brother in the fields to pick cotton. Rhodes soon turned his attention to the more lucrative field of diamond picking. This excursion led Rhodes, for whom the infamous “Rhodes Scholar” is named, on a path that defined and dominated the diamond industry worldwide. He created, through a series of purchases of diamond mines, what is today known as De Beers SA. Established in 1888, De Beers, through Rhodes, grew to the point of controlling 90% of the global diamond market. This illustrious giant was astute, intelligent and fully understood price elasticity and the power of supply and demand. Additionally, he used economic forces to his advantage and eventually created a diamond cartel. His ingenious move was to convince sellers (diggers) and buyers that their mutual interests were in keeping prices high and stable. As a result, he formed a “Diamond Syndicate” which set prices and a monopoly was formed. De Beers created the perpetual illusion that diamonds were a rare commodity, which allowed retail prices to remain high. The century-old diamond empire reached sales of more than $4 billion in 1998. Eventually, De Beers changed hands to a German, Ernest Oppenheimer. , at the turn of the 20th century. De Beers' most formidable adversary was not another diamond company, but rather the U.S. Department of Justice. Constantly facing antitrust regulations, De Beers managed to evade all accusations for thirty years, selling only indirectly in the United States. All his business first went through London. As De Beers' supply chain indicates (Figure 1), their relationships with U.S. diamond dealers and the U.S. government are unique among international companies because they remain independent of the United States in an effort to hold the government accountable. distance. This relationship ended when the American courts finally won their case and De Beers pleaded guilty to price fixing. The cartel was fined $10 million1. This, even now, has opened a new opening to “re-enter” the US diamond market. With Nicky Oppenheimer and Gary Ralfe as the new leaders of De Beers, it was an opportune time for De Beers to reinvent itself in the United States..