Sustainable Competitive Advantage
THE DYNAMIC DIAMOND INDUSTRY: IS IT FEASIBLE FOR ITS PLAYERS TO GAIN SUSTAINABLE COMPETITIVE ADVANTAGE?
Nkiruka Chidia Maduekwe
ABSTRACT: This report seeks to analyse the diamond industry from a global point of view. The diamond industry is global in nature. Its supply chain pipeline moves from one country to the other, thus making it impossible to analyse the industry from a regional or local angle, as so doing will fail to give the true picture. As an industry whose product derives its value from the perception of its consumers, what is the feasibility for the players in the industry to gain sustainable competitive advantage? This notwithstanding, are there issues that can rob the industry of its profitability? The report will employ the Industry analysis tools created by Michael Porter, Prahalad & Hamel. The report shall examine the five forces together with the macro-environment factors. In addition, in order to give a balanced view, the report will seek to discuss the effect the chaos theory can have in attaining Sustainable Competitive Advantage (SCA) and the importance of stakeholder management to SCA for the firms in the diamond industry. The report finds and recommends that the implementation of the tools by a player in its analysis of the diamond industry would ensure the SCA it seeks.
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The author was called to the Nigerian Bar in 2008. She is completing an LL.M in Environmental Law & Policy and M.Sc in International Oil & Gas Management at the CEPMLP, University of Dundee. She is a member of the Nigerian Bar Association, Society Petroleum of Engineers, and the Energy Institute. Email: nikksidia2k2@yahoo.com.
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TABLE OF CONTENTS Page ABBREVIATIONS...................................................................................................................... iii
LIST OF FIGURES…………………………………………………………………………......iv
TERMS OF REFERENCE …………………………………………..………………………....v
1. Introduction……………………………………………………………………………….….1
2.
Nkiruka Chidia Maduekwe
ABSTRACT: This report seeks to analyse the diamond industry from a global point of view. The diamond industry is global in nature. Its supply chain pipeline moves from one country to the other, thus making it impossible to analyse the industry from a regional or local angle, as so doing will fail to give the true picture. As an industry whose product derives its value from the perception of its consumers, what is the feasibility for the players in the industry to gain sustainable competitive advantage? This notwithstanding, are there issues that can rob the industry of its profitability? The report will employ the Industry analysis tools created by Michael Porter, Prahalad & Hamel. The report shall examine the five forces together with the macro-environment factors. In addition, in order to give a balanced view, the report will seek to discuss the effect the chaos theory can have in attaining Sustainable Competitive Advantage (SCA) and the importance of stakeholder management to SCA for the firms in the diamond industry. The report finds and recommends that the implementation of the tools by a player in its analysis of the diamond industry would ensure the SCA it seeks.
*
The author was called to the Nigerian Bar in 2008. She is completing an LL.M in Environmental Law & Policy and M.Sc in International Oil & Gas Management at the CEPMLP, University of Dundee. She is a member of the Nigerian Bar Association, Society Petroleum of Engineers, and the Energy Institute. Email: nikksidia2k2@yahoo.com.
i
TABLE OF CONTENTS Page ABBREVIATIONS...................................................................................................................... iii
LIST OF FIGURES…………………………………………………………………………......iv
TERMS OF REFERENCE …………………………………………..………………………....v
1. Introduction……………………………………………………………………………….….1
2.
Bibliography: Mintzberg, H., Ahlstrand, B. and J. Lampel, Strategy Safari: Your Complete Guide through the Wilds of Strategic Management (2nd ed.) (Harlow, UK: Pearson Education Limited, 2009) Articles Gupta, S., Polonsky, M., Woodside, A Read, G.H. and A.J.A. Janse, Diamonds: Exploration, Mines and Marketing. Lithos 112(1), (2009) OTHER Internet Bates, R., The „Post-Cartel‟ Diamond World Faces Its First Crisis Kimberley Process. (Online). Available from URL: http://www.kimberleyprocess.com/. (Last visited on 9th March, 2010) Koonar, K.., The Diamond Industry: An Analysis of Social and Economical Responsibilities Kretschmer, T., .De Beers and Beyond: The History of the International Diamond Cartel. (Online) London: London Business School (1998) Available from URL: http://pages.stern.nyu.edu/~lcabral/teaching/debeers3.pdf McNamara, W., Diamonds May Not Be Forever. Financial Times (Online) 2010, Available from URL: http://www.ft.com/cms/s/0/b0174b7e-5169-11df-bed9-00. (Last visited on 26th May, 2010) Pikul, C., Nice Ice Yu, w. DeBeers – Rulers of the Diamond Industry: The Rise and fall of a Monopoly. (Online). Available from URL: http://are.berkeley.edu/~sberto/DeBeersDiamondIndustry.pdf. (Last visited on 26th May, 2010) 14