DEBEERS DIAMOND DILEMMA
DEBEERS DIAMOND DILEMMA
1. VISION STATEMENT
To be the world’s leading provider of traditional and quality diamonds.
Justification:
World: This gives the idea that Debeers is targeting the entire world market “consumption of diamonds”
Provider: 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.
Quality: This means that Debeers will continue its age long tradition of supplying and marketing world class diamond varieties. Also, the company seeks to enter into the synthetic diamond industry; however, its products from there will still be of quality.
2. KEY STRATEGIC CHALLENGE
The Key strategic challenge of DeBeers Company is the threat posed by the synthetic diamond production industry.
3. STRATEGIC ANALYSIS
This is classified under macro-environmental analysis and internal analysis. The macro-environmental analysis includes employing the seven components of the macro-environment (PESTEL) and using Porter’s five forces model of competition. The internal analysis will basically cover the SWOT analysis model.
SEVEN COMPONENTS OF THE MACRO-ENVIRONMENT:
A. Political, legal and Regulatory factors:
Passing in 2002 of the Kimberly process certification scheme: This was to help curb trade in blood diamonds from war-tone countries in Africa and also avoid widespread consumer boycott.
Southern African Countries such as Namibia and South Africa passed laws (Diamonds amendment act of South Africa, 2005) that forced miners to sell percentages of their production to local cutting and polishing firms. This was an attempt to allow local participation in the downstream sector of the diamond trade which was much more profitable.
Anti-trust laws in the United States (Sherman Anti-trust act) forbid certain price control prices in the diamond industry. The European Union also enabled competition in the industry by
1. VISION STATEMENT
To be the world’s leading provider of traditional and quality diamonds.
Justification:
World: This gives the idea that Debeers is targeting the entire world market “consumption of diamonds”
Provider: 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.
Quality: This means that Debeers will continue its age long tradition of supplying and marketing world class diamond varieties. Also, the company seeks to enter into the synthetic diamond industry; however, its products from there will still be of quality.
2. KEY STRATEGIC CHALLENGE
The Key strategic challenge of DeBeers Company is the threat posed by the synthetic diamond production industry.
3. STRATEGIC ANALYSIS
This is classified under macro-environmental analysis and internal analysis. The macro-environmental analysis includes employing the seven components of the macro-environment (PESTEL) and using Porter’s five forces model of competition. The internal analysis will basically cover the SWOT analysis model.
SEVEN COMPONENTS OF THE MACRO-ENVIRONMENT:
A. Political, legal and Regulatory factors:
Passing in 2002 of the Kimberly process certification scheme: This was to help curb trade in blood diamonds from war-tone countries in Africa and also avoid widespread consumer boycott.
Southern African Countries such as Namibia and South Africa passed laws (Diamonds amendment act of South Africa, 2005) that forced miners to sell percentages of their production to local cutting and polishing firms. This was an attempt to allow local participation in the downstream sector of the diamond trade which was much more profitable.
Anti-trust laws in the United States (Sherman Anti-trust act) forbid certain price control prices in the diamond industry. The European Union also enabled competition in the industry by