The De Beers Group Exploring the Diamond Reselling Opportunity Harvard Case Solution & Analysis

Introduction

De Beers initiated its business in 1880 to offer the premiumdiamonds forconsumer use in the market. In 1887, it became the world’s largest controller of the diamond market in South Africa, followed by controlling 95% of the resources globally.

In the initial period, the company remainedsuccessful withhigh sales, however, with the gradual changes in the marketand changes in the externalmarkets, led to the decrease in thedemand of diamonds.In such situation, the company developed a marketing campaign, in which it aligned thediamond with the sentimentsto love.Such marketing campaign has been successful as itincreased the sales of thediamond in themarket.

Since it has been established thatdiamonds are non-renewable luxury gems, maintaining the pricing and supply anddemand of the gem in market greatly posited a directimpact on the profits of the company.In order to deal with such issue, the companycollaborated withdifferent diamond suppliesandretailers such as Tiffany, in order to reach thecustomermoreeffectively.

Apartfrom this,anothertrend has been detected in the market of selling recycled diamonds that have been sold lower than the new diamond and offered the retailors more profit margin than the new one.Perhaps, to deal with these issues, the company developeda pilot program in order to gauge the customer feedback and improve the sales.Though the response from the pilot program has been positive, however, prolonging such programfor along period of time may be rejected by theboardmembersas it would reduce brandvalue andequity in the market, yet it hasbeen important to gauge thecustomerfeedback inorder to develop better strategies in the future.

The De Beers Group Exploring the Diamond Reselling Opportunity Harvard Case Solution & Analysis

Analysis

SWOT Analysis

Strengths

  • The company has strong market leadership in rough diamond sales, allowing it to covermajority of the market share in the majority of the SouthAfrican markets.
  • It has strongreservesand resources for diamond mining, allowing it to remainequipped.
  • It contributes a major portion in the supply of the thoughdiamond in the market, leading to strong leadership position.
  • It has the highest number of loyal customers, depictingthe strongmanagement of customerretention in the organization.
  • Thecompany has highest operatingincome in terms of per carat and also absolute value diamond.
  • In addition to this, the companyon high quality if diamonds, as compared to the other players in the market.
  • It controls 40% of the total supply of worldwide diamonds.
  • Apart from this, under theorganizational setting, the companyhas strong marketing strategy that allows it to gainmoremarketexposure anddevelop strong market equity and brandimage.
  • Lastly, the company has strong partnership with the government of Botswana and Namibia.

Weaknesses

  • Though the company has strong brandimage and operating income, it generateslowprofits than the other of the competitors.
  • It has lesser reserves mines as compared to the rivals.
  • Though it pursues highermarketing strategy in the market, yet its brandimage in the end market is limited.

Opportunities

  • The company has theopportunity to sell its diamondsthrough developing flagship stores in the market.
  • It has strongopportunity to diversify the diamonds forindustrial usage,alsoincreasingitsbrandportfolioand reducing thedependence on one brand.
  • It also has the opportunity to develop a strategicalliance with one of the strongretailorsin themarketand work as the core supplier of diamond jewelry............

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