Debeers
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De Beers once had a monopoly on the global diamond market but faced increasing competition after 1998. New shareholders pushed for changes, including selling off stockpiles that had been used to control prices. Competition from producers in Angola, Russia, and Australia grew as barriers to entry lowered, reducing De Beers' control over suppliers and ability to influence prices across the industry.
Debeers
- 5. Ablity and vision to bring together the entire diamond industry Evasive strategy powerful brand.people willing to pay 15% premium
- 6. new and aggressive shareholders realized "all cash no dash" no bold acquisitions heavily invested in angloamerican stockpiling led to undervalued stockprice legal issues in united states
- 8. Pre 1998 Post 1998 Null. As there was a situation of complete monopoly, there was no rivalry. Rivalry existed, but was very weak, as they still controlled almost 60% of the output of the biggest market Pre 1998 Post 1998 Very strong cartelization led to superior bargaining power of suppliers. They were also able to control the prices through market buy back and maintain a stock pile. With a fall in luxury brand values, the strain on stockpile increased and the new share holders forced De Beers to offload the stock pile. This reduced the “pricing control” ability of supplier (De Beers)
- 9. Pre 1998 Post 1998 Very low, due to level of cartelization. The supply was controlled by De Beers and this allowed them to control the price. This was the main reason that anti-trust law was being forced upon De Beers Increased to a certain extent with the new entry of Angola, Russia and Australian diamond producers. When they off-loaded their diamonds at lower prices, the now weak De Beers could not buy to control the prices.
- 10. Threats of New Entrants Pre 1998 Very low for suppliers as the industry was very closely held and cartelized The buyers were limited to “sight-holders”, for whom “sights” took place in closed rooms of London Post 1998 After 1992, De Beers had to face double blow of defection from Russian and Angolan and new independent diamond developers in Australia. After the Asian crisis in Far East, the overall control of De Beers on suppliers in the Diamond market came down to 60% , even at generous estimates. After the opening up of the suppliers market, fell of shares and entry of American stock holders, no more was it possible for the company to maintain a stockpile as it had over the years. Thus, the market, though highly capital intensive was open for new entrants.
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