Debeers

Facts: In 2007, Stuart Brown, Finance Director for De Beers stated, “We don’t see synthetic diamonds as a threat, but you cannot ignore it completely” (pg.1). Unfortunately for De Beers the recent civil war in Sierra Leone had created an unsavory pall over the diamond trade in which De Beers, for the most part, held a monopoly. People like Lee Mandell were aware of the illicit trade in what was known as “Blood Diamonds” and were looking for an alternative to purchasing the tainted gems. For people like Lee the alternative was to buy synthetic diamonds. Synthetic diamonds are created in labs instead of mined from poor, war torn countries like Sierra Leone. Fortunately for De Beers, people like Lee are not sure that buying synthetic diamonds holds the same “Romantic Value” as mined diamonds. De Beers attempts to market their own vast stockpile of diamonds from the encroaching synthetic market by labeling the laboratory produced gems as nothing more than “costume jewelry”, has not done much to stem the turning tide away ground extracted diamonds.

De Beers was at a crossroads of sorts. The company could either stand by and hope synthetic diamonds are a passing fad or it could enter into the synthetic diamond market by manufacturing its own synthetic gems. Additionally, De Beers was attempting to remake its image due to decades of anti-competitive business practices. The company was trying to focus on brand development that was demand driven. By 2007, De Beers had gone from selling eighty percent of the worlds finished diamonds to forty five percent. Coupled with the emerging synthetic diamond market and the “Blood Diamond” aura of mined diamonds, De Beers desperately needed to change its approach.

Part of De Beers problems began in the early 1990’s before the emergence of synthetic diamonds. Previous to the 1990’s, De Beers controlled eighty percent of the worlds finished diamond supplies. During the 1990’s De Beers totalitarian grasp on the industry began to slip....