Describes the challenges faced by De Beers in the beginning of 1983. De Beers has been, since its inception in 1888, provides a greater degree of control over the world's supply of diamonds. In 1983, the company produce more than 40% of natural diamonds in the world, and through marketing agreements with other manufacturers, distributed by 70%. For 50 years, until 1983, the company has never cut prices and, in general, picked them up much faster than inflation. However, in 1983, the company faced a number of challenges that threaten the structure he so carefully built. First, a large manufacturing nation ceases to be sold through De Beers. Second, the new discovery means that annual supply of mined diamonds to double by 1986. Finally, the industry is going through its worst recession since the 1930s, which led to a significant deterioration of the financial situation of the company. Describes the structure and economics of the diamond industry and asks the student to decide whether De Beers should abandon the business strategy he pursued for nearly a century. "Hide
by Pankaj Ghemawat, Toby Lenk Source: Harvard Business School 15 pages. Publication Date: October 16, 1990. Prod. # 391 076-PDF-ENG
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