...Report on Argyle Diamonds and the Diamond Industry 1 INTRODUCTION India was the only known source of diamonds before the eighteenth century when diamonds were discovered in Brazil. The modern diamond industry was born in 1867 when diamonds were discovered in the Kimberley region of South Africa. The De Beers mining company was formed and they controlled 80-90 per cent of the rough diamonds entering the diamond market. The De Beers share of the diamond market fell in the 1990’s when the Soviet Union moved to a free market economy as Russian diamond mining companies were selling their diamonds on the open market. The Central selling Organisation (CSO) controlled by De Beers is responsible for regulating the price of diamonds on the market and marketing a large percentage of the world’s diamonds. The CSO protected the dominance of the diamond cartel but this monopoly was challenged by Argyle Diamonds when they refused to renew their marketing contract with De Beers. Argyle has been characterised by low value coloured diamonds, however their highly sought after pink diamonds has successfully differentiated their products from other diamonds the in the market (Vinciullo, Annear and Disbury, Not dated). 1.1 AIM OF THE ASSIGNMENT The aim of the assignment is to research and analyse the diamond industry and to evaluate Argyle Diamonds’ strategic position in the diamond industry. 1.2 OBJECTIVES OF THE ASIGNMENT • To research and evaluate competition in the precious...
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...Body 4 3.1. Situation Analysis of Argyle Diamonds (SWOT) 4 3.2. Analysis of Argyle’s Marketing and Sales Strategy 5 3.2.1. Key Objectives 5 3.2.2. Strategies and Tactics (Value Chain Analysis) 6 4 Conclusion 8 5 Recommendations 9 5.2 Brown Diamond Sales Strategy 9 5.3 Other Recommendations and Sales Strategies 10 6 References 12 7 Appendices 13 Appendix A 13 Appendix B 14 Appendix C 15 Appendix D 16 Appendix E 17 Appendix F 18 1. Executive Summary The diamond industry is a burgeoning industry with high profit margins that is attractive to any organization around the world. However with production limited to a handful of companies and the opportunity to conduct sales promotions hindered by the monopoly of De Beers Diamond Company, the opportunities for growth are limited, at best. This report examines the situation of Argyle Diamonds of Australia. It provides a SWOT analysis for a deeper look into the current situation as well as analyzing the key objectives, strategies, and tactics that are employed by Argyle Diamonds in its efforts to promote coloured diamonds through the use of a value chain analysis. Finally, recommendations have been provided for Argyle Diamonds on how to capitalize on its strengths in the coloured diamond industry with particular emphasis on the opportunity they possess with the large production of brown diamonds. The overall analysis suggests that Argyle Diamonds are moving in the correct direction;...
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...DeBeers “A Diamond is Forever” Prepared April 16, 2012 For decades, De Beers has been the preeminent name in diamonds. Thanks to a stockpile of the world's rough diamond supply, indelible marketing schemes and even negotiations with foreign governments for their diamonds, De Beers has been the most important name in one of the world's most lucrative businesses for almost a century. This paper will review the billion dollar rise and fall of a monopoly that has crushed competitors and cash-strapped governments since the 1800s. Diamonds became a symbol of love thanks to De Beers, which is fitting, since De Beers became what it is today because of a love story: the love of money. In the beginning, the diamond trade took place mostly in India and Brazil. With the discovery of diamonds in South Africa, the trade simultaneously took off and became much less profitable. Up until the mid-1800s, diamonds were a rarity and could be seen only on the hand of a monarch. But the diamond rush that began in South Africa in the second half of the 19th century flooded the market with diamonds, killing demand. It would take some ingenious plotting and advertising to keep the diamond's reputation as intrinsically valuable and desirable, which is where De Beers comes in (Goldschein, 2011). Company History and Overview De Beers got its start when English-born businessman Cecil Rhodes, broke into the diamond business in South Africa by renting water pumps to miners before buying diamond fields...
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...as new sources of competition and suspicion about conflict diamonds, Gareth Penny had to rethink the basics A diamond may be forever, as De Beers' famous advertising slogan contends, but is the same true of a business model? That was the question facing Gareth Penny, managing director of De Beers, in the late 19'90s, when the famed diamond cartel found itself beset by a series of events that ultimately 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 addition to mining its own diamonds, it bought diamonds from other producers and had what it called the "central selling organization," controlling some 90% of the world's diamonds. Its tight control over such a vast amount of supply enabled De Beers to keep prices high for a commodity that is neither particularly scarce nor useful. If a competitor offered diamonds on the market outside of De Beers' central selling organization, De Beers would simply flood the market with similar stones, thus eliminating any pricing power the competitor might offer. By the end of the 1990s, the business model of controlling supply and managing how much of its inventory went to market at any time was no longer effective: New sources of diamonds were discovered in sufficient quantity that they could be sold competitively outside of De Beers' central selling organization. Demand for diamonds was dropping at a time when demand for other luxury goods...
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...儿都不值钱。 Diamonds are not such high in value and rare in amount. On the contrary, diamond mine are one of the common minerals. In fact, in European and American areas, there are even more cut- diamonds than vehicles. They are valuable, however, they could not be exchanged freely like other products as the prices for second-hand diamonds are far below its origin. Besides, the natural diamonds can now be replaced by rhinestones. Actually, diamond might be worthless without its traditional image of romance. 钻石市场供大于求。世界上钻石的供给量，一直都超过它的需求，按照经济学供需规律，钻石应该会跌价，变得很便宜才对。但是，戴比尔斯通过持续买进市场上多余的钻石，来维持它的高价，估计到目前为止，戴比尔斯已囤积了价值超过百亿美元的钻石了。戴比尔斯还能支撑多久，还能持续买进多少市场上的钻石，没人能回答。 In diamond market, supply always exceeds demand. According to economic rules, the price will finally drop. However, De Beers have controlled and manipulated the price by continuously purchasing the stockpiles of diamond that come from other competitors. The price of which, has amounted to more than $10 billion up till now. How long can De Beers last and how much diamonds can they buy? No one knows. 天价打造的“浪漫形象”。戴比尔斯在世界钻石市场的成功，可以说是一个近乎达到垄断的完美范例。它一方面总能刺激市场对钻石的需求，另一方面则减少钻石供给，即使在1955年通用公司（GE）研究实验室宣布发明了人造钻石后，戴比尔斯公司仍能成功维持钻石的高价完美形象。事实上，戴比尔斯公司每年花在广告上的费用多达1.6亿美元，不断传递着“Diamonds are Forever”的信息，持续钻石浪漫的传奇。 They has put much emphasis as well as financial resources on preserving the romantic image of diamonds. To be frank, De Beers spends as high as $160million in advertising every year, continuously conveying the idea of ‘Diamonds are Forever’...
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...Until the beginning of the eighteenth century all known diamonds came from the Golconda region near Hyderabad in India. Pliny wrote an incredible account of how diamonds were found in an inaccessible valley. The locals threw meat into the valley and the diamonds stuck to it. Eagles carried off the meat to their nests from which the diamonds were recovered. At their peak the Golconda diamond fields probably supported many thousands of workers but were practically exhausted by the late seventeenth century. In 1844 diamonds were discovered in Brazil and for a while the Chapada Diamantina, or Diamond Highlands, in the state of Bahia, became the diamond capital of the world attracting prospectors and adventurers in the same way that the California Gold Rush did. A series of major diamond finds in South Africa from 1867 onwards, coinciding with a decline in production in Brazil, soon made it by far the biggest source of diamonds. As in Brazil and Indian the first finds were alluvial but by 1869 diamonds were being mined in South Africa. Their value depended on their rarity and Cecil Rhodes realised that if suppliers competed against each other that would be threatened. By the end of his short life Rhodes had gained control of the diamond mines and extended British rule over much of southern Africa. Mark Twain said of him that when he stands upon the Cape of Good Hope, his shadow falls to the Zambesi (Twain, 1904). One area that was not under British rule was South-West Africa...
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...company’s competence? Who is the company? What’s their background? What do they know about buying and selling diamonds? Established in 1989, Rare Investment is proud to be one of Canada’s leading authentic Rare Jewel Diamond Houses with unrivalled expertise in the sales and service of natural fancy colored diamonds and rare jewel investments. Through our 30-year history in the industry and our long-standing reputation with the industry’s leading mining and polishing companies, we provide investors with direct access to the world’s rarest diamonds with the greatest potential for appreciation. CREDIBILITY In any organization ‘credibility’ is paramount. When looking to invest in diamonds, we encourage investors to learn about a company’s leadership and credibility. Rare Investment's strategic operations are overseen by an executive team with expertise and experience in rare diamond valuation, diamond education, brand management, as well as significant expertise in the diamond trade. Rare Investment is backed by a sophisticated team of industry experts, GIA certified diamond advisors, highly-educated market researchers and the long-standing reputation of Rare Investment. Our brokers of rare jewels are highly skilled in valuing rare diamonds and have world renowned experience searching the world’s most coveted mines for the rarest and finest natural fancy colored diamonds with the greatest potential for appreciation. COST Has the company made money for investors? What kind...
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...as a result of DeBeers unethical research behavior they have been convicted along with the General Electric Company by the US justice department for conspiracy to raise prices in the $500 millions-a-year industrial diamond industry. "The indictment charges GE and DeBeers, which account for 80 percent of the industrial diamond market, with conspiring to fix and raise prices worldwide."(San Antonious, 2012) The DeBeers corporation was first guilty and second showed a direct correlation of purposely breaking the no-tolerance segment of the US law called the Sherman Act. Cartels: The Sherman Act’s first offence for even operation are unafraid thru intimidation and threats to acquire or control whatever item they go for to all suppliers/workers, businesses, the public or middle-man altogether. Next, DeBeers illegal cartels withheld large sums of the discovered diamonds they had acquired so they can hike up diamond prices. So, DeBeers could make it seem publicly that there was a perception that there was a shortage in supply of available diamonds to buy, therefore causing the public market to scurry to buy them at absorbent prices because they had to. Later as the demand of the market became more financially beneficial to them as a corporation, they made the diamonds more available, therefore allowing DeBeers to have financial gain on four parties directly: suppliers, businesses, the public and middle-men. So because of DeBeers acting unethically, they are facing years of jail-time...
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...Gems and Jewellery Last Updated: December 2010 Gems and jewellery form an integral part of Indian tradition. A legacy passed from one generation to another. The components of jewellery include not only traditional gold but also diamond, platinum accompanied by a variety of precious and semi-precious stones. The Indian gems and jewellery sector is expected to grow at a CAGR of around 13 per cent during 2011 – 2013, on the back of increasing government efforts and incentives coupled with private sector initiatives, according to a report ‘Indian Gems and Jewellery Market Forecast to 2013’, by RNCOS. As per the credit rating agency Crisil, the diamond industry in India is predicted to remain stable during 2010-11 due to improved prices and steady demand. Gems and jewellery exports from India is expected to grow by 30-35 per cent in 2010-11, according to the Gem and Jewellery Export Promotion Council (GJEPC), on the back of revival in demand in the international markets. Industry Structure Although, the market is highly dominated by the unorganised players, with increase in consumer income and economic prosperity, the future of organised retail in India is very bright. In its bid to enhance the market strategy, a gems and jewellery special economic zone (SEZ) sprawling over 40 acres with an investment of US$ 441.1 million is being planned to be set up by Gold Souk, the jewellery mall developer. The company plans to have residential apartments named Gold Souk...
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...Transport Phenomenon (Electrical and Thermal) in two allotropic forms of Carbon (Diamond and Graphite) Graphite and Diamond both are formed from carbon (two allotropic forms of carbon). Though they have similar constituent element, they differ a lot in their properties. Diamond is a good thermal conductor but a bad electrical conductor, while graphite is a bad thermal conductor but a good electrical conductor. This is one example of their property difference. The difference in their properties arises because of different arrangement of carbon atoms present in them. Basic physical and chemical properties of graphite and diamond to highlight their differences are as follows: Differences between Graphite and Diamond Physical Appearance: Graphite is opaque and metallic- to earthy-looking while diamonds are transparent and brilliant. Another important physical difference is their hardness. The hardness of minerals is compared using the Moh's Hardness Scale, a relative scale numbered 1 (softest) to 10 (hardest). Graphite is very soft and has a hardness of 1 to 2 on this scale. Diamonds are the hardest known natural substance and have a hardness of 10. Diamond is used as an abrasive because of its great hardness, whereas graphite is used as a lubricant. Structural Differences: Diamond Space Group Fd3m face-centered cubic Atoms/unit cell 8 Cell volume 45.385 x 10-24cm3 X-ray density 3.5155 g/cm3 {draw:frame} Graphite Space Group C6/mmc; C-centered...
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...Blue Nile Case Group D Monday and Wednesday 11:00-12:15 Anthony Allen, Laura Blakeman, Daniel DeMaiolo, Carla Hill, and Mason Shattuck 1 Industry Analysis: Dominant Economic Features Definition of Jewelry Retailing Industry & Nonstore Retailer Subsector According to the United States Census Bureau, the Jewelry Retailing Industry (NAICS code 448310) “comprises establishments primarily engaged in retailing one or more of the following items: (1) new jewelry (except costume jewelry); (2) new sterling and plated silverware; and (3) new watches and clocks. Also included are establishments retailing these new products in combination with lapidary work and/or repair services” (United States Census Bureau Jewelry Industry Definition, 2008). While Blue Nile competes in the larger Jewelry Retailing Industry, it also competes in the narrower Nonstore Retailers (Subsector 454) category because of the e-commerce component of the business model. The United States Census Bureau comments that “industries in the Nonstore Retailers subsector retail merchandise using methods, such as the broadcasting of infomercials, the broadcasting and publishing of direct-response advertising, the publishing of paper and electronic catalogs, door-to-door solicitation, in-home demonstration, selling from portable stalls and distribution through vending machines. Establishments in this subsector include mail-order houses, vending machine operators, home delivery sales, door-to-door sales, party...
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...The Price Of Diamonds Is Too High There are many arguments about the price of diamonds being too high considering that diamonds are not actually a scarce resource. Up until recently only De Beers controlled the diamond industry making the diamond industry monopolistic. (Zimnisky, 2014) However, over the last 25 years a series of events led to the dismantling of the De Beers monopoly. De Beers no longer has complete control over the diamond industry and instead it is market forces, not the De Beers monopoly, driving the diamond market. (Zimnisky, 2014) The following essay will discuss what events led to the dismantling of the De Beers monopoly, the role of the diamond cartel in determining the price of diamonds as well as the history of the diamond cartel. diamonds in South Africa and businessman Cecil Rhodes purchased as many diamond mining claims as he could including the farmland owned by the De Beer family. (Zimnisky, 2014) Eventually, Rhodes had acquired enough properties of the majority of the world’s supply of rough diamonds and he called his company De Beers Consolidated Mines Limited. De Beers effectively influenced all the world’s rough suppliers to sell production through the de Beers channel, acquiring full control of the global supply not produced by the de Beer mines. (Zimnisky, 2014) This power gave rise to the diamond cartel. De Beers is the dominant company in the industry and has been around since 1880. (FALL, 2007) Since 1925, the Oppenheimer family...
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...depicts the adverse effect of diamonds on the people of Africa. It also addresses the real price of diamonds which it believes to be the lives of millions of Africans. Additionally, it examines the response from the United Nations and question if enough is being done to crack done on the sale of blood diamonds. The famous phrase “Diamonds are Forever” is known to most people all over the world. What most people do not know is where most of these diamonds are coming from and how they came to become perfect gestures of love and romance. Looking at a clear cut diamond ring, it is hard to imagine the possibility of thousands of innocent people being murdered, tortured, and forced to mine for these stones; unfortunately that is the case in Africa. Diamonds in West Africa have been used for the last 30 years to fund rebel groups and their desire to take control of their nations by violence and intimidation. In such conflicted regions of the world, diamonds lose their connotation of beauty and elegance and are stained with blood. In this paper, I will discuss the many ways in which “conflict diamond” has brought nothing but poverty, suffering and war to the West African people. I will further explain what world organizations such as the United Nation have done in order to counteract the adverse effects of the conflict diamond on the African community, and the extent to which such efforts have been successful. Conflict diamonds are diamonds illegally traded to fund conflict...
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...Antitrust September 17, 2009 Tonight’s Agenda Role Call Review of Last Week, Current Events Antitrust Case Study: DeBeers Wrap Up Review of Last Week “People of the same trade seldom meet together, even for merriment and division, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” -- Adam Smith “Perfectly Competitive Market” Consumers well-served. Receive goods at lowest price possible. Society able to choose among competing good with maximum efficiency. Firms that do not produce what consumers want at a fair price are quickly eliminated. Highly restrictive model applying stringent standards. Antitrust Perfect competition model is essentially static. Real world markets are extremely dynamic. Perfect competition model is unsuitable as a benchmark. Antitrust Laws Promote a competitive economy by prohibiting actions that restrain, or are likely to restrain, competition and by restricting the forms of market structure that are allowable. Limit the activities of firms that have legally obtained monopoly power. Intended to provide a general statutory framework to give the Justice Department, the FTC, and the courts wide discretion in interpreting and applying them. The Development of Antitrust Laws Trust was a device for pyramiding control over several operating companies. The Sherman Antitrust Act (1890)...
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... Incorporated in 1999 as a Delaware corporation, Blue Nile Inc.is the leading online retailer of high quality diamonds and fine jewelry. Blue Nile offers its products for sale through the bluenile.com website in over 40 countries and territories throughout the world. The company is headquartered in Seattle, Washington and employs 206 employees as of December 2012. The objective of Blue Nile is to offer high-quality diamonds and fine jewelry at competitively attractive prices and at the same time providing useful information and guidance throughout their purchase process. High end jewelry shopping has in fact taken a surprising turn as more and more customers order them online at websites like bluenile.com instead of vising a brick and mortar store. Blue Nile is definitely not the only online jeweler. It has competitors like diamonds.com, whiteflash.com and successful retailers like amazon.com have also tapped this market in the recent years needless to say that the competitive market is intense and highly fragmented with brick and mortar stores also selling a big percentage online. While barriers to entry is high in this industry due to high capital costs, regular brick and mortars are entering this online market due to the ability to keep costs down while reaching a huge market. Threat of substitutes is really low which is a significant advantage to all diamond jewelers. The bargaining power of customers is medium as there are many options for purchase. However as people...
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