Describes the problems with which De Beers at the beginning of 1983. De Beers had, since its inception in 1888, exercised a high degree of control over the global supply of diamonds. In 1983, the company reduced spread over 40% of the world’s natural diamonds through marketing agreements with other manufacturers, more than 70%. For 50 years until 1983, the company had never lowered its prices and overall they had clearly raised before the inflation rate. But in 1983, the company … Read more »

Describes the problems with which De Beers at the beginning of 1983. De Beers had, since its inception in 1888, exercised a high degree of control over the global supply of diamonds. In 1983, the company reduced spread over 40% of the world’s natural diamonds through marketing agreements with other manufacturers, more than 70%. For 50 years until 1983, the company had never lowered its prices and overall they had clearly raised before the inflation rate. But the company has faced the threat of any number of problems that had so carefully built the structure in 1983. First, a large producing nation had the sale by De Beers. Second, new discoveries meant that the annual supply of diamonds would be mined to double by 1986. Finally, the industry was in the worst crisis since the 1930s, what. To a significant deterioration in the financial position of the company Describes the structure and efficiency of the diamond industry, and calls decide whether De Beers should the business strategy it had pursued for nearly a century to give the students.
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from
Pankaj Ghemawat,
Toby Lenk
Source: Harvard Business School
15 pages.
Publication Date: Oct 16, 1990. Prod #: 391076-PDF-ENG
De Beers Consolidated Mines Ltd. (A) HBR case solution