World Diamond Market

Team 6. De Beers Presentation

Report on presentation

Originally we planned to prepare a presentation about the PepsiCo, however I offered the team to talk about something less well-known and therefore more exiting – about diamond industry.

I came to this idea when I was using a diamond industry as an example to answer one of the HW questions within this course. I have wrote a diploma paper dedicated to the features of world diamond market and discussing the prospects that Russia has on it in terms of future strategies and development.

A sufficient part of my work was dedicated to discussion of the great changes on the world diamond market that happened in 1995 – 2000 and which significantly affected the market structure turning it from monopoly driven by De Beers into Oligopoly with few main players presented.

By 21st century the specific form of the cartel union has ceased to exist on the world diamond market. It happened because several new independent diamond producers entered the market while few diamond suppliers that had already participated on the market decided to abolish their production. The unique system of fixing market prices, which had been organized under the aegis of “De Beers”, had ceased to satisfy the new market tendencies and the change of the alignment of forces and thus had been modified. Formation of the price level on the world market had ceased to be the priority aim of the “De Beers” and that is why the role which “De Beers” was playing as a guarantee of the stable market prices is not of current importance nowadays. With “De Beers” refusal to control the price level and with the advent of new competing diamond producers the strategies of the main diamond mining companies were changed. In modern circumstances they focus on profit maximization and market share enlargement. The forms of competition that had been peculiar to the world diamond market had also been changed. “De Beers” had turned from the price wars towards gradual...