De Beers

In: Business and Management

Submitted By ipsita25
Words 2699
Pages 11
Case study

De Beers- An Ethical Idealism

“At De Beers there has always been a clear recognition that, while our primary purpose as a business shapes what it is that we do, it is how we work that defines who we are.” -Nicky Oppenheimer
Executive Chairman, De Beers

Introduction
For generations, diamonds have been marketed as tokens of power and love. For some however, diamonds have a more utilitarian appeal. Easily concealed, immensely valuable and largely untraceable, stones from rebel-held mines have raised billions of dollars on world markets to finance revolution in Angola, Sierra Leone and the Democratic Republic of Congo (DRC). For years these

"conflict diamonds" have encourage rebel leaders to arm and equip their armies in violation of UN weapons and financial sanctions.

Diamond monopoly
De Beers is notable for its monopolistic practices throughout the 20th century, whereby it used its dominant position to control the international diamond market. The company used several techniques to exercise this manipulation over the market: Firstly, it persuade independent producers to join its single channel monopoly, it flooded the market with diamonds similar to those of producers who refused to join the cartel, and lastly, it purchased and stockpiled diamonds produced by other manufacturers in order to price control through supply. In 2000, the De Beers forced to change the model, due to certain unavoidable factors such as the decision by producers in Russia, Canada and Australia, to distribute diamonds outside of the De Beers channel, thus effectively ending the monopoly. The De Beers family of companies started operating under a set of guiding rules known as the Diamond Trading Company Best Practice Principles (BBP). The BPPs promote amenable behaviour throughout the diamond value chain. It is applicable to the family of companies, its suppliers…...

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...economic rules, the price will finally drop. However, De Beers have controlled and manipulated the price by continuously purchasing the stockpiles of diamond that come from other competitors. The price of which, has amounted to more than $10 billion up till now. How long can De Beers last and how much diamonds can they buy? No one knows. 天价打造的“浪漫形象”。戴比尔斯在世界钻石市场的成功,可以说是一个近乎达到垄断的完美范例。它一方面总能刺激市场对钻石的需求,另一方面则减少钻石供给,即使在1955年通用公司(GE)研究实验室宣布发明了人造钻石后,戴比尔斯公司仍能成功维持钻石的高价完美形象。事实上,戴比尔斯公司每年花在广告上的费用多达1.6亿美元,不断传递着“Diamonds are Forever”的信息,持续钻石浪漫的传奇。 They has put much emphasis as well as financial resources on preserving the romantic image of diamonds. To be frank, De Beers spends as high as $160million in advertising every year, continuously conveying the idea of ‘Diamonds are Forever’ to us and make diamond a legend of romance. The success of De Beers in diamond industry is almost a perfect illustration for market monopoly. They stimulates the demand for diamonds on one side and decrease the supply on the other side. Even after the invention of rhinestones were announced by GE Research lab, De Beers still successfully keeps the valuable, precious, luxury and grace image for diamond. De Beers(德比尔斯)的自我声明是:“全球领先的钻石权威”和“钻石的梦想的守护者”并且是世界钻石理事会的成员之一,并参加了许多金伯利处理回顾任务Kimberley Process Review Missions和其他会议。他们声称,他们在金伯利的发展的过程中,发挥著举足轻重的作用. Being the ‘world’s leading expert on diamond’ and ‘the Guardian of the diamond dreaming’ as they claimed, De Beers has taken part in a lot of Kimberley Process......

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