De Beers Paper

2165 Words Feb 11th, 2014 9 Pages
1. Specify the nature, structure, types of products or service of your chosen organization, and two (2) key factors in the organization’s external environment that can affect its success. Provide explanation to support the rationale.
De Beers Diamond Company is an industry that currently produces $13 billion worth of rough diamonds each year, leading to the employment of 10 million people globally from mining to retailing. 70% of rough diamonds are sold for industrial purposes with the remaining 30% “gem quality” being distributed to experts for cutting, polishing and jewelry manufacturing (Stein, 2001). The global jewelry market has increased three-fold in the last 25 years and is currently worth $72 billion each year. Jewelry diamonds
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This is demonstrated that the demand for diamonds increased decade on decade during the 20th Century while prices increased precipitously during that period (Stein, 2001). Since the discovery of the diamond fields in South Africa in the 1870s, production has continuously increased over time, and now an accumulated total of 4.5 billion carats have been mined since that date. Interestingly 20% of that amount has been mined in the last 5 years alone. This increase in production levels is largely due to the increased global demand for diamonds, owing largely to the marketing activities of the De Beers group. As described earlier, De Beers set about increasing consumer demand by marketing diamonds as the ultimate demonstration of love and devotion, leading to the diamond ring being essential for marriage proposals from the 1930’s onwards. De Beers also came up with the slogan “Diamonds are forever” to endow stones with sentimental value, resulting in very few diamonds being sold privately by individuals (the public holds more than 500 million carats of gem diamonds, more than fifty times the number of gem diamonds produced by the diamond cartel in any given year). As a result there has been no decrease in the demand for brand new diamonds from high street jewelers (Stein, 2001). De Beers were also responsible for

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