Action steps for African Business Schools
2011-05-24 13:56:36 UTC
Case Study: De Beers' corporate transformation: the competitive pressures
Title
De Beers' corporate transformation: the competitive pressures
Author
Chaudhuri, S; Roy, K
Pages
12
Product Type
Reference #
306-310-1
Teaching Note
306-310-8
Institute
Setting
South Africa
Year
2006
Keywords
Horizontal vs vertical monopoly; Single channel marketing; Central selling organisation; The diamond cartel; Buyer of last resort; 'A Diamond is Forever'; De Beers and Alrosa; Lev Leviev; Synthetic diamonds; US antitrust; Supplier of choice; The 'Forevermark'; Conflict diamonds; Making money the De Beers way
Summary/
Abstract
Abstract
The De Beers Group, which had maintained a monopoly on the global diamond trade since the early 20th century, had to change its business model by the turn of the 21st century. It adopted the 'Supplier of Choice' programme as a response to several allegations of unethical business practices, the issue of conflict diamonds in Africa and the antitrust suits filed against it in the US and the UK. De Beers consciously transformed itself from being a controller to a stimulator of global diamond business. However, it faced stiff competition from a number of competitors, prominent among them being Lev Leviev, who pioneered the concept of vertical integration in the diamond trade and has robbed De Beers of many lucrative deals. The case is structured to enable students to: (1) understand how the global diamond industry used to run through a cartel in most of the 20th century; (2) describe the competitive landscape of the global diamond industry in the 21st century; and (3) analyse the business transformation at De Beers and its impact on the company and the global diamond trade as a whole. A structured assignment '306-310-4' is available to accompany this case
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