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De beers
- 1. The De Beers Group Kaitlin Park,Hermela Solomon, Ian Linkous, Michael Vitak, Joey Lamberto Team South Africa
- 2. History: Our Founding 1866:First Diamond is Found in the Orange River (South Africa) 1869: First Diamond Rush 1888: DeBeers Consolidated Mines was Founded
- 3. History: The ModernEra 1971: De Beers joins with the Government of the Republic of Botswana 1994: De Beers joins with the Republic of Namibia to form Namdeb 2008: First successful sale of rough diamonds through e-commerce 2011: Anglo American Mining acquires the family share of De Beers 2016: De Beers opened its’ newest mine: Gahcho Kue
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- 6. Exploration: Botswana, South Africa,Canada Production Rough Diamond Sales Namibia, Botswana, South Africa, Singapore, Hong Kong, Dubai, Israel, Belgium Cutting, Polishing, and Manufacturing Brands Lines of Business
- 7. What is DeBeer’s Competitive Advantage? Geographic Location Present in 28 Countries Mining in 4 Countries Control of the entire supply chain Exploration/discovery Production/refinement Sales
- 8. Preferred Mode ofInternationalization International Strategy Minimal local customization Low pressures for integration Low pressures for responsiveness
- 9. De Beer’s Strategy NewStrategy: With help from Bain and Company Consultants, De Beers decided to create a vertical monopoly, extending from the mines to the retail level. The focus shifted from controlling global supply to adding value through branding and marketing. (Cadieux) “Forevermark” Campaign - Associated customers with the idea that De Beers favored good ethics, CSR, and genuine quality Focused more on marketing and sales strategies “A diamond is forever” slogan - spent $170M Competitors in the diamond market:
- 10. Organizational Structure Joint Venture: 2biggest Shareholders: 1. Anglo American - 85% 2. Government of the Republic of Botswana - 15% Wholly Owned Subsidiaries International Divisional Structure
- 11. Suggestions for FutureStrategies Cost and Localization Pressures: - Localization for diamonds is essentially non-existent - Costs are quite prevalent and ever rising - Will continue to rise as mines become deeper Internationalization in Different Countries: - Opened mines in Canada, Victor and Snap Lake, in 2008 - Gahcho opened in September of 2016
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Editor's Notes
- #3 In 1866, the Eureka Diamond was found near the Orange River The Star of South Africa was found in 1869 - triggered the first diamond rush 1887: Cecil Rhodes and Barney Barnato, each bought claims and shares in nearby mines. To outproduce each other, they flood the market causing diamond prices to plummet. A merger is the only solution. March 12, 1888: DeBeers Consolidated Mines Limited Cecil Rhodes named as founding Chairman. 1890: 10 merchants from London Diamond Syndicate agree to buy DeBeers full production The mine in Kimberley closed due to the Boer War in 1899 1902: Cecil Rhodes died; Ernest Oppenheimer was hired as a diamond buying agent 1957: Harry Oppenheimer is titled Chairman after his father passed 1960: DeBeers started exploring in Canada Premier Mine is discovered Cullinan Diamond: largest rough diamond (3,106.75 carats) found at Premier (1905) De Beers Auction Sales, trading as Diamdel, began supporting non-Sightholder businesses with rough diamond supplies (1964) De Beers joins with the Government of the Republic of Botswana for a 50/50 partnership - developed Orapa in 1971 1978: De Beers Exploration discovers Kimberlite in Ontario - 1988: unveils the Centenary Diamond: 273.85 carats De Beers joins with the newly independent Republic of Namibia to form Namdeb, a 50/50 joint venture partnership, to mine the country’s diamonds. (1994) Shadows Campaign 1995 1998: Nicky Oppenheimer is named Chairman 2001: They set up a new company, De Beers Diamond Jewellers (DBDJ), with luxury brand LVMH Moët Hennessy Louis Vuitton. 2006: DTC Botswana 2008: First successful sale of rough diamonds through e-commerce 2008: Opens its first mines outside of Africa Anglo American acquires the family share of De Beers(2011) Diamond Insight Report is launched (2014) De Beers acquires 33.4% stake in the Swiss based owner, Synova SA (laser technology) - 2015 De Beers joined the Diamond Producers Association (2015) Forevermark launched “A Diamond is Forever” slogan De Beers signed a 10-year agreement with the Government of the Republic of Namibia For sorting, handling, valuing, and sales of the Republic’s diamonds New CEO: Bruce Cleaver (2016) De Beers opened its’ newest mine: Gahcho Kue (2016)
- #4 In 1866, the Eureka Diamond was found near the Orange River The Star of South Africa was found in 1869 - triggered the first diamond rush 1887: Cecil Rhodes and Barney Barnato, each bought claims and shares in nearby mines. To outproduce each other, they flood the market causing diamond prices to plummet. A merger is the only solution. March 12, 1888: DeBeers Consolidated Mines Limited Cecil Rhodes named as founding Chairman. 1890: 10 merchants from London Diamond Syndicate agree to buy DeBeers full production The mine in Kimberley closed due to the Boer War in 1899 1902: Cecil Rhodes died; Ernest Oppenheimer was hired as a diamond buying agent 1957: Harry Oppenheimer is titled Chairman after his father passed 1960: DeBeers started exploring in Canada Premier Mine is discovered Cullinan Diamond: largest rough diamond (3,106.75 carats) found at Premier (1905) De Beers Auction Sales, trading as Diamdel, began supporting non-Sightholder businesses with rough diamond supplies (1964) De Beers joins with the Government of the Republic of Botswana for a 50/50 partnership - developed Orapa in 1971 1978: De Beers Exploration discovers Kimberlite in Ontario - 1988: unveils the Centenary Diamond: 273.85 carats De Beers joins with the newly independent Republic of Namibia to form Namdeb, a 50/50 joint venture partnership, to mine the country’s diamonds. (1994) Shadows Campaign 1995 1998: Nicky Oppenheimer is named Chairman 2001: They set up a new company, De Beers Diamond Jewellers (DBDJ), with luxury brand LVMH Moët Hennessy Louis Vuitton. 2006: DTC Botswana 2008: First successful sale of rough diamonds through e-commerce 2008: Opens its first mines outside of Africa Anglo American acquires the family share of De Beers(2011) Diamond Insight Report is launched (2014) De Beers acquires 33.4% stake in the Swiss based owner, Synova SA (laser technology) - 2015 De Beers joined the Diamond Producers Association (2015) Forevermark launched “A Diamond is Forever” slogan De Beers signed a 10-year agreement with the Government of the Republic of Namibia For sorting, handling, valuing, and sales of the Republic’s diamonds New CEO: Bruce Cleaver (2016) De Beers opened its’ newest mine: Gahcho Kue (2016)
- #10 Presented De Beers items as a branded luxury item Forevermark campaign is how they increase their profitability: they increase the value of the diamonds; this develops brand loyalty De beers doesn’t really reduce costs because they’re vertically integrated, so they control every aspect of the supply chain http://www.debeersgroup.com/en/news/company-news/company-news/interim-results-2015.html “De Beers and the Global Diamond Industry” - case study at the Richard Ivey school of Business
- #11 http://ar09.angloamerican.solutions.investis.com/ofr/group_perf/diamonds.html International division structures allows debeers to respond quicker to the division’s needs It also allows each division to coordinate within their geographical location and to meet the unique demands of their geographical division They can also focus solely on the goals and objectives specific to their location By operating with joint ventures, they expand in different markets, thus increasing profit growth The wholly owned subsidiaries: global exploration, mining in canada and mining in south africa, Global sightholder sales, auction sales, sightholder sales south africa, and forevermark
- #12 http://www.debeersgroup.com/en/reports/impact/country/canada/evolution.html