DE Beers Diamond Dilemma - Case Study Example

Comments (0) Cite this document
Summary
Some of the factors in the macro-environment that affects the various decisions within an organization are political, economic, social, technological and environmental factors. All these factors are can be analyzed using Pestle framework (Gillespie, 2009)…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER95.5% of users find it useful
DE Beers Diamond Dilemma
Read TextPreview

Extract of sample
"DE Beers Diamond Dilemma"

Download file to see previous pages Political factors These factors emerge from the various policies, which are imposed by the government. De Beers as an incorporation had to deal with different political upheaval since it operated in different countries and had to sell its products to different countries as well (Gillespie, 2009). The political upheaval in Soviet Union in the year 1991 causes a lot of profit loss to De Beers Incorporation (Danielle, 2005). Before this upheaval, the Soviet Union and De Beer Incorporation had trading agreements and that dates back to the year 1950s. In this same year, deposits of Diamond were found in Siberia and from the trading agreement; Soviet Union had agreed to sell all their diamonds to this Incorporation. The integration of the Soviet system resulted into the collapse of the trading agreements that De Beer had with them and therefore, the enforcement of the various contracts were not possible. The political upheaval in Angola in the year 1990 also weakened the operations of De Beer Incorporation. The rebels were able to take control of major diamonds mines from the then President Dos Santos and this forced De Beer to purchase blood diamonds. Apart from Angola, other African countries, which were trading partners for De Beer, also suffered a lot of political upheaval. Countries like Sierra Leone, Democratic Republic of Congo, and Liberia were equally affected by the political upheaval and that led to reduced trading by De Beer. Trading in blood diamond later caused the company many revenues following their exposure in the year 1998. Economic factors Changes in the economy greatly affected the operations and organization of many business corporations (Gillespie, 2009). Due to hard economic times in diamond trade in the year 1999, De Beer was able to experience some shifts in its value chain (Danielle, 2005). A lot of integration in terms of forward and backward movement was experienced. Many investments in mines by the retail outlets were being experienced at that time and at the same time many mines were equally becoming retailers. This integration proved it tough for De Beer since the company returns were greatly reduced. In the same year, jeweler Tiffany and Company that has been sourcing most of diamonds from De Beer announced its withdrawal and it bought some mining concerns from Canada at a cost worth $ 104 million. These economic factors affected De Beer Company and the Company opted to safeguard its market dominance. The safeguarding practiced proved to be very expensive for this company since it was forced to buy diamonds from inflated prices. Some of the diamonds, which were purchased at inflated prices, were later sold at very low prices. The emergence of Australian Argyle Company into the diamond trade further weakened the market bases for De Beer since this company was able to produce low quality diamonds, which were later sold cheaply. The inflation in prices of diamonds from other countries where De Beer was sourcing them also made this company in the year 1990 to lose a lot of its market share (Danielle, 2005). The share price for this company was also able to reduce from 17 to 12 $ between the year, 1989 and the year 1998 and the fall in price presented a percentage drop of close to 30. Social factors These factors generally affect the demands of the various products produced by an organization. These factors circumrotate on the labor and the workforce within an organization (Gillespie, 2009). The processing of diamond in De Beer Company had several processing industries, which were helpful in the cutting and polishing of the processed diamonds. The Indians dominated the workforce in the organization and close to 1 million workers in the processing ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“DE Beers Diamond Dilemma Case Study Example | Topics and Well Written Essays - 2250 words”, n.d.)
Retrieved from https://studentshare.org/business/1486167-de-beers-diamond-dilemma
(DE Beers Diamond Dilemma Case Study Example | Topics and Well Written Essays - 2250 Words)
https://studentshare.org/business/1486167-de-beers-diamond-dilemma.
“DE Beers Diamond Dilemma Case Study Example | Topics and Well Written Essays - 2250 Words”, n.d. https://studentshare.org/business/1486167-de-beers-diamond-dilemma.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Advertisement campaign: De Beers - A Diamond is forever
...? Advertisement Campaign: “De Beers- A Diamond is forever” Advertisement Campaign: “De Beers- A Diamond is forever” Introduction De Beers is the diamond mining and polishing industry which has been able to make a prominent place of its diamond in the global market. Recently, the company has been able to capture the market of several Asian countries, and India in particular. With its image and historical reputation built on the idea of “A diamond is forever”, the company has become the most dominant diamond distributer in the global...
9 Pages(2250 words)Essay
Conflict Diamond
...?Conflict Diamonds < < The trade in conflict diamonds has got to end. We are all familiar with the glamorous connotationsof the diamond – draped around the wrists and necks of ladies at social events, and encased in engagement rings the world over. Diamonds have been marketed as a symbol of love, of fidelity, of longevity. But for the people of some African countries, after decades of suffering and bloodshed, the diamond is a source of conflict, and a spiller of blood. Conflict diamonds are those illegally traded to fund war and insurrections, commonly in Central and West African nations. In the late 1990s, this trade caught the attention of the world as the protracted conflict in Sierra Leone reached its devastating... climax. It is not just Sierra Leone that has suffered – diamonds have fuelled or exacerbated conflicts in Angola, Liberia, Ivory Coast, the Democratic Republic of Congo and the Republic of Congo. These diamonds are regularly produced through the forced labor of men, women and children, or stolen during violent attacks on legitimate mining operations (geology.com). They have, on several occasions, been the main source of funding for brutal rebel groups. Due to the huge amount of money at stake in the illegal diamond trade, bribes, threats and torture often accompany the mining. In Liberia, between 1989 and 2003, there were two civil wars which killed perhaps 250,000...
5 Pages(1250 words)Speech or Presentation
De Beers - Blood Diamonds
...?De beers – Blood Diamonds Introduction In the recent past, managers of organisations prime goal were towards increasing shareholders wealth. To there is a rapid change and the debate that has hit many businesses is on how to give back to the society and at the same time increase shareholders wealth. Company Social Responsibility (CSR) is a process adapted by businesses that integrate social, environmental, ethical, and human rights concerns of the surrounding community in their businesses. By deciding to undertake social responsibility, companies choose to manufacture new products and services that will benefit the society and minimise the negative impacts associated with this...
4 Pages(1000 words)Essay
Diamond
...Diamond; A Journey To The Heart Of An Obsession Mathew Hart’s “Diamond; a journey to the heart of an obsession” narrates the story of the large pink from a Brazilian riverbed. The small-scale miner in the area made this discovery. The miners needed people with greater experience in the mining industry to sell the rock. The book displays the scrutiny of rocks in the business in values of weight, shape, clarity. Every gemstone has its own gleam and character, low on some and great on others. When the brokers see the rock, it strikes interests immediately. Hart tells of the geology of the great stones. A boy in a South Africa found the first stone in the 1869 lying on a firm. This created the greatest...
3 Pages(750 words)Book Report/Review
The Management of Global Trade Distribution - De Beers
...? The Management of Global Trade Distribution - De Beers I. Background De Beers as a company started along with the diamond rushin the 1800s when massive diamond mines were discovered in South Africa. A businessman name Cecil Rhodes bought as many diamond mine as he could together with a farmland owned by the De Beer family (De Beers Industry Profile 2013). By 1900s Rhodes had hoarded enough diamonds to the point that he owned the majority supply of diamonds in the world. He then set up a company named De...
5 Pages(1250 words)Essay
De Beers and US Anti Trust Law
...Forever: De Beers and US Anti Trust Law Introduction Diamond market is dominated by De Beers world over for more than one hundred years since its inception in 1880. The diamond trade has been managed by a 'cartel' since these days headed by De Beers mining company. Once the availability of diamond mines shrunk to Africa and a few in Brazil, the diamond mines in Africa controlled the availability of the diamonds in the market and their price. De Beers slowly and steadily ensured that all the diamond mines...
3 Pages(750 words)Case Study
De Beers
...Running head: Organizational Theory, Design & Change Organizational Theory, Design & Change s Table of Contents Organizational Theory, Design & Change Introduction Throughout this report I will attempt to identify the problems that De Beers are at present facing. I will then formulate a set of recommendations for action to facilitate them to move into the U.S. market by means of proposing a relaxation of U.S. antitrust laws with limitations on illicit diamonds, and in conclusion I will finish off with a number of implementation steps intended for the solutions that have been suggested. Over View of the Organization The De Beers Cartel is a...
9 Pages(2250 words)Case Study
De Beers' recommended strategy
...De Beers recommended strategy De Beer is a privately owned family of companies which is engaged in diamond exploration, mining, trading, and marketing of diamonds (De Beers). The company possess leading market share worldwide in the diamond industry (Bain and Company). Strategy recommended # 1 “The company can expand its business in new available markets in UAE, Europe and, Australia to expand customer base with a support of company’s strong supply chain and brand equity” Strategy recommended # 2 “The company can acquire small and medium-sized trading and marketing firms in the emerging...
1 Pages(250 words)Case Study
DeBeers Diamond Dilemma
... in the future, it is certain that it can no longer go back to operating as in the ‘good old’ days and they have to maintain a firm structure that is responsive, flexible and understands the importance of customer perceptions. Bibliography McAdams, D., and Reavis, C., 2008. DeBeers’s Diamond Dilemma. MIT Sloan Management. Goldschein, E., 2011.The Incredible Story Of How De Beers Created And Lost The Most Powerful Monopoly Ever. Business Insider. Retrieved from: de-beers-2011-12?op=1#ixzz3AYQ64Wez> [Accessed 16 August 2014] Epstein, E. J., 1 1982.Have You Ever Tried to Sell a Diamond? The Atlantic, Feb 1983. . Retrieved from: diamond/304575/ > [Accessed 16 August 2014] Andrews, A.E., 2006. Diamond Is...
10 Pages(2500 words)Admission/Application Essay
Porters Diamond
...Porter’s Diamond Porter’s Diamond Michael Porter was born in 1947 and is a leading ity on competitive advantage, clusters and international strategy. The Porter’s diamond provides a framework for the understanding of a nation’s position in the global competition. In his theory, he introduces a set of interconnected suppliers and industries in the concept of clusters. He explains the various factors for competitive advantage in his diamond framework. The first aspect is the strategy and structure of firms. He explains that competition makes businesses to increase their innovation and productivity. Second, he describes the demand conditions factor. Here, he explains that...
1 Pages(250 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Let us find you another Case Study on topic DE Beers Diamond Dilemma for FREE!
Contact Us