De Beers

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- Head office in Luxembourg

- Outsourcing of the management of its data centers (Unisys as subcontractor in England for example)[pic 19]

Human resources: [pic 20]

- In-house presence of an Internal Market Intelligence Group

[pic 21]

R&D:

- Precise inventory management

- Technology that identifies synthetic diamonds of pure diamonds

[pic 22]

R & D Procurement

- Regulated purchases for inventory creation

[pic 23]

- Internal logic: purchase of many mines

- Operations / Production :

- Exploration - Diamond Mining - Technological Tool with Element

- External Logistics

- Storage - Limiting the number of suppliers

- Marketing and Sales

- Brand De Beers Diamond Jewelers in partnership with LVMH

- Forever mark and a brand managed entirely by De Beers

Thanks to this tool, we can see that De Beers focuses mainly on mining. Diamonds, being just a reworked raw material, require no follow-up once sold.

De Beers seeks to completely control its chain of activities by attacking the distribution of its products in addition to selling them to the Sightholders. It therefore finds itself in competition with its own products and must absolutely stand out. His partnership with LVMH allows him to benefit from the experience of a large group in luxury and to acquire new skills.

The company does not hesitate to outsource the management of certain activities such as its IT equipment, which allows it to optimize its control over all its main activities. The presence of a group of Internal Market Intelligence enables it to identify, study, evaluate and apply if necessary certain processes or working methods observed in the external environment of the enterprise

2/ What were the changes in De Beers´ strategy at the end of the 20th century (late 1900´s) and the drivers of that change? Assess and evaluate this strategy compared to those followed in the past. As a guideline, at least following topics should be covered:

Pestel analysis

POLITICAL

Conflicts and civil wars caused instability in Africa the companies that exploited the mineral resources must leave these countries. However, when the oppositions stop, the activities will not be taken up by the companies because the newly established governments have the possibility of deciding on the redistribution of the production sites to other competitors

The creation of a mining charter that no longer allows free exploitation and free access to mining companies

The intention to promote competition in the market causes a greater regulation of the authorities

Countries hosting mining enterprises have little or no income from taxation and taxation. Caused by significant tax benefits

ECONOMIC

• the economic crisis has negative effects on the demand of the sector which has led to a decrease in purchasing power

• competitors have free access

• Demand for diamonds exceeds supply in Asia

• The increase in the price of gasoline and fuel oil has led to an increase in the costs of companies in the sector that have their products traveling around the world.

Social

• Bad advertising campaigns by the mining industry on "Blood Diamonds" have negative effects on the perception of the sector.

• the abusive exploitation of African soils causes recurrent problems with the population

• African countries demand for a better remuneration for the exploitation of their land

Technological

• The importance of technological efforts in prospecting and locating new mining lands and deposits makes it possible to offer several opportunities

• The creation of synthetic diamonds of natural quality equivalent to the new technology

Environmental

• Discovery of large deposits but resources are rapidly reduced due to intensive exploitation

• Environmental campaigns are increasingly present to protect natural resources: mining is one of the most polluting industries in the world

Legal

• Kimberley launched the project "Blood Diamonds".

• The US anti-trust law submission to which De Beers

Porter´s five forces

Bargaining power of new entrants (low)

- Requires large financial and technological inputs

- The diamond industry is a highly protected "cartel"

Bargaining power of suppliers (low)

- Chemicals used for extraction

Bargaining power of substitute Product

- Synthetic diamonds

- Gold

- Silver

- Other gems

Bargaining power of customers (low but in progression)

- DTC (Diamond Trading Company) is always important

- Controls production according