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Published by: ESSEC Business School
Originally published in: 2011
Version: March 2011

Abstract

De Beers' 122 years of strategic evolution exemplifies Adam Smith's 'Invisible Hand'. External factors have created a path dependency for De Beers that has led them to retailing jewellery in 2001. With a need to re-invent themselves after the end of their monopoly they leveraged on their 'tricky' heritage in the jewellery industry. The success of their joint venture with LVMH is clouded with embedded reasons for both parties. Ironically, De Beers' business model has fashioned their largest rising threat- the SRDSIL from India. New players and emerging markets are now chiseling the face of the diamond industry of tomorrow. Questions for the case: (1) How did De Beer's business strategy evolve from Cecil Rhodes to Harry Oppenheimer?; (2) What made De Beers' marketing and business strategy unique from competitors? What were the external factors that shaped De Beer's current business strategy with Nicky Oppenheimer?; (3) How did De Beer re-invent themselves after their monopoly ended?; (4) Does De Beers have the heritage to enter the jewellery market? Justify and analyze; (5) Was it the right move for De Beers to enter into a joint venture with LVMH? If yes, why? If not, why not?; and (6) What is the future outlook of the diamond industry and De Beer? What are your recommendations for De Beers?
Size:
16,000 people worldwide
Other setting(s):
1888-2010

About

Abstract

De Beers' 122 years of strategic evolution exemplifies Adam Smith's 'Invisible Hand'. External factors have created a path dependency for De Beers that has led them to retailing jewellery in 2001. With a need to re-invent themselves after the end of their monopoly they leveraged on their 'tricky' heritage in the jewellery industry. The success of their joint venture with LVMH is clouded with embedded reasons for both parties. Ironically, De Beers' business model has fashioned their largest rising threat- the SRDSIL from India. New players and emerging markets are now chiseling the face of the diamond industry of tomorrow. Questions for the case: (1) How did De Beer's business strategy evolve from Cecil Rhodes to Harry Oppenheimer?; (2) What made De Beers' marketing and business strategy unique from competitors? What were the external factors that shaped De Beer's current business strategy with Nicky Oppenheimer?; (3) How did De Beer re-invent themselves after their monopoly ended?; (4) Does De Beers have the heritage to enter the jewellery market? Justify and analyze; (5) Was it the right move for De Beers to enter into a joint venture with LVMH? If yes, why? If not, why not?; and (6) What is the future outlook of the diamond industry and De Beer? What are your recommendations for De Beers?

Settings

Size:
16,000 people worldwide
Other setting(s):
1888-2010

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