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De Beers Multi portrayted Strategy Shift A diamond may be forever, as De Beers famous advertising slogan cont quits, scarce is the aforementioned(prenominal) true of a argument model? That was the question face Gareth Penny, managing director of De Beers, in the late 1990s, when the famed diamond combine found itself beset by a series of events that prevail forced it to examine and then retool its business strategy. Since the company was founded in 1888, De Beers followed a strategy of supply control. In assistant to mining its own diamonds, it bought diamonds from other producers and had what it called the central sell organization, unconditional some 90% of the worlds diamonds. Its tight control over such(prenominal) a vast amount of supply enabled De Beers to keep prices risque for a commodity that is neither particularly scarce nor useful. If a enemy offered diamonds on the commercialise outside of De Beers central selling organization, De Beers would sca rcely flood the market with similar stones, thus eliminating every determine power the competitor might offer.

By the end of the 1990s, the business model of controlling supply and managing how much of its account went to market at any time was no eagle-eyed-term effective: in the buff sources of diamonds were discovered in sufficient mensuration that they could be exchange competitively outside of De Beers central selling organization. Demand for diamonds was move at a time when quest for other prodigality goods was increasing. Brand-conscious consumers viewed the stones as anonymous commodities, and the precious stones, long marketed as an parable of eternal love, became tai nted by the musical phrase linage diamonds ! and came to symbolize the ill-gotten gains of rogue governments. Patricia OConnell is Management editor platform for BusinessWeek.com.If you want to get a full essay, order it on our website: OrderEssay.net

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