Essay about De Beers
First of all, it tells us that the inventory strategy is consistent regardless of how CSO sales and overall profit from operations perform. This strategy was launched so that the De Beers could control demand and prices. Evidently it also shows that the 1980’s bust is a low peaking point for De Beers, as inventory levels for the first time is significantly higher than OP and CSO SALES.
Q2. Please briefly talk about the recent boom-and-bust
The 1970s were a turbulent time for the diamond market, which saw the growth of inflation that led to speculation and hoarding in the rough diamond market. Eventually, the drastic increase in interest rates to the diamond trade coupled with falling retail demand burst …show more content…
Q8. What does exhibit7 tells us?
Take year 1971 as reference data, IMF price index is exactly 100. • From year 1971~1983, even though price index keeps increasing almost twice, high inflation surprisingly stimulate the demand of diamond to soar even the price goes up. This shows consumers may not only purchase diamonds for own usage, but also treat diamonds as investment goods and hold them as asset inventory whenever high inflation occurs. Investors rather to hold diamonds than cash especially during high inflation, slow growth