The paper "Strategic Plan for De Beers" is a great example of a Management Case Study. De Beers a diamond company was founded in South Africa in 1888. Currently, it is a group of companies with a global reach focusing on exploration, mining, and marketing of diamonds. The principal role of its wholly-owned subsidiaries and partners is on value addition on the diamond (De Beers, 2012). Up to the 1990s, the company used to control the global trade of diamonds through its supply-driven approach. By then, they produced 45% of global rough diamonds but sold 80% of the global sales.
During this period, they dictate trends in the market in terms of prices and whom to sell to (Cadieux, 2005). Nevertheless, this global dominance has changed as a result of a myriad of factors. The three scenarios that tilted the playing include the introduction of 3 new players who were outside its grasp in the 90s. The entry of the three curtailed its control on diamond supply. These three were Leviev which was operating in Russia, the emergence of Argyle in 1996 in Australia and the emergence of Canada.
This drove them to panic, thus, stockpiling diamond yet the prices were going down (Berman & Goldman, 2003). The other happenings include being involved in blood diamonds with Angola and Sierra Leone rebels which tarnished their public relations (Berman & Goldman, 2003) and the emergence of the synthetic diamonds which is comparatively cheaper and with less environmental and political complications (Reed & White, 2006). As the process of recapturing its market dominance, the company has undergone massive restructuring. The first is by shifting their focus from a supply-driven approach to demand-driven approach (Cadieux, 2005).
The second is aggressive marketing and branding so as to distinguish their natural diamond from the synthetic one and lastly, engaging in the Kimberley certification program so as to control the purchase of blood diamonds which tarnished their reputation (The Economist). Based on this brief excursion, the chief focus of this report is to develop a strategic direction to ensure the long-term survival of De Beers within the competitive environment of the diamond industry by using various analysis tools of strategic management such as Porter 5 Force, PESTEL and VRINE (SWOT) analysis. 1.2 Strategic Positioning This sub-section outlines the current mission and goals of the firm.
Secondly, it assesses how the firm differentiates itself from the competitors through factors like value creation. Lastly, it interrogates the application of porter’ s strategy in the company and if it is consistent with the mission & goals and how it fits within the larger environmental context. In this regard, the section will rely on appendix 1 that does environmental analysis and appendix 2 that does analysis for industry through porter’ s model. 1.2.1 Mission and Goal The company's mission is to turn diamond dreams into a lasting reality.
To attain this, they have two objectives which are to utilize their economic power in creating value out of diamond and employ partnership. Additionally, they have 5 principal values. These are being passionate about the products & firm, unite their strength, ensure trust in all their operations, prove that they mind others (communities) and impact on the future positively through research & risk-taking (De Beers, 2012).
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