Management stratégique

  Strategic management  

The invisible hand, De Beers and emerging markets

1. The marketing and business strategy that was followed by De Beers over the course of their historie to be unique from competitors :

• De beers strategy followed at the end of 1800’s, beginning of the 1900’s and mid 1900’S. assessment and evalutation of each strategy :

The diamonds sector has experienced several changes that have prompted De beers to opt for strategies that will only be beneficial to help it overcome its constraints.

In the 1800's De Beers started buying a large number of permits to use the diamond mines to expand its production and control the market.

After that De Beers opted for a second strategy that was to control sales as well as price, Rhodes who runs this business took several initiatives for example the fact that he came prime minister of South Africa that he Allowed to get ahead of all that laws that help him control the market.

In the 1900s the creation of the Central Sales Organization (CSO) due to the decline in control over the mines as the market became known and there were entrants. By creating the CSO De Beers was able to regain control of the market which led him to fix the price of diamond in the international market.

In October 29, 1929 took place the great depression which was an economic crisis which affected De Beers in its production and also the economic situations of the actors which dropped and which reduced the purchases. De Beers has once again opted for a new strategy which was to improve its marketing with the help of NW in order to improve sales a new among these campaign there was a diamonds forever that was very successful and in Also changing the vision of the diamond on the part of the consumer for example for wedding rings which very interesting.

• De Beers value chain analysis :

To explain the value chain analysis we should use the tools that we get in class that is this scheme. This scheme split the value chain analysis in two activities the first one is the support activities and the second one is the primary activities, and each activity contain several points.

[pic 2]

In regards to the support activities the first part is the infrastructure that is as the key one the mines for extracting their diamonds, for controlling the distribution they create the central selling organization, for selling the diamonds they have severals stores, and we can add too had central post to manage all the operations.

the second part is the technology, research and development, design that mainly contain the big investment in it to found the new location of the diamonds easier and to extract it with bigger quantity and good quality, they also get a way to verify the origin of their diamonds.

 The last part is the human resources, operations management, general management that is about the employees so all the stakeholders worked with a good coordination and good management that let them to be motivated and also they get strong group that have a good skills .

For the procurement that i found in the figure on the class presentation it was in primary activities but in internet i found it in support activities but i can explain it  separately is all the agreements that the beers get to improve the level of it’s work.  

In regards of to the primary activities the first part is the inbound logistics that is the inventory management, the warehousing and materials so for this case the beers buys a great number of mines and get good material to extract the diamonds so this reduce the cost of getting diamonds because it’s manage the majority of the chain.                 The second part is the operations that is mainly mining and good control of it manufacturing that let them get the control of the price in the market.                            The third part is the outbound logistics that is about the direct distribution with limiting the offer of the location and having a small period to the distribution.                            For the fourth part that is the sales and marketing De Beers invest a lot in the advertising to create un big value to the diamond and create in to the buyers a new perception such as symbol of love and others.                                                               For the last part is the distribution support and customer service that is in other ways the after sales services that is not available because for the company the product is sold placed and that it.

• Influencers ( non pure players of the value chain) on the value chain and relationship with De Beers :

the influencers on the value chain are mainly the competitors such as ALROSA from Russia that is the big competitor in the market, RIO TINTO diamond from United Kingdom, BHP BILLITON from Australia, HARRY WINSTON from united states and others that is  LEVIEV Group.

The second type of influencer is economic variation such as the great depression in October 1929 that drives the decline in demand for diamonds, and also some new government laws that affected the variation of the price of the diamonds.

1. 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 :

• PEST-EL analysis

Political: De Beers faced some laws which ended several bad behavirous from government regulation and from the United Nations, and NGOs such as the price variation of the De Beers diamonds due to  the monopolized position of De Beers in the market that showed the anti competitive behavior, we can add about the controversies that people heard that this diamonds business came to equip rebels with weapons  so De Beers did some regulation to stop it.

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