Marketing Management Case Study

De Beers' Corporate Transformation: The Competitive Pressures

OR

Abstract:
The De Beers group, which 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' program 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 stimulator of global diamond business. However, it faces 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.

Pedagogical Objective:

• To understand how the global diamond industry used to run through a cartel in most part of the 20th century
• To describe the competitive landscape of the global diamond industry in the 21st century
• To analyse the business transformation at De Beers and its impact on the company and the global diamond trade as a whole.

Keywords : 'Horizontal vs vertical monopoly'; Corporate Transformation Case Study; 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

Contents:

• De Beers' Competitive Scenario
• The Corporate Transformation: From Controller to Stimulator of Diamond Demand