De Beers College Essay Example

during the production stages form part of the industry's external environment. These activities are usually conducted by governments or in collaboration with companies like De Beers. When a significant reserve is found, it becomes lucrative to exploit it due to the valuable nature of the raw material, resulting in substantial financial gains (De Beers Group, 2012).

2. Analyze the key roles and relationships of three (3) important stakeholders in the selected organization.

The De Beers Diamond Company is associated with three main stakeholders, namely The Kimberley Process, Business Action for Africa, and Diamond Development Initiative. The Kimberley Process is a collaboration among governments, industries, and civil society with the objective of preventing the circulation of conflict diamonds - uncut diamonds that rebel groups use to finance campaigns against lawful governments. Business Action for Africa is an international business and organization based in Africa that focuses on influencing policies in favor of growth and poverty alleviation; presenting a more balanced perspective on African development; and highlighting exemplary business practices.

De Beers is dedicated to advancing sustainable business practices to aid in Africa's long-term positive development. This commitment is exemplified by their substantial social investment efforts in South Africa, Botswana, and Namibia. De Beers Group (2012) reports an annual contribution of over $2.0 billion to the continent. Their approach to sustainable development is seamlessly integrated into their business model and guided by five strategic focal points: Economics, Ethics, Employees, Communities, and Environment.

The Diamond Development Initiative (DDI) is a program in the diamond industry that seeks to alleviate poverty among over one million African informal, or artisanal, small diamond diggers and their families

by formalizing the economies surrounding artisanal diamond mines. DDI was established by De Beers Group in partnership with prominent NGOs, the World Bank, and the British Government. This initiative draws inspiration from the collaboration seen in the Kimberley Process and unites NGOs, governments, and the private sector to collectively harness diamonds as a catalyst for development.

The organization's financial performance is greatly influenced by the primary stakeholders. They have the power to impact the perception and demand for products, particularly diamonds, through effective marketing strategies (Stein, 2001). Diamonds have come to be closely linked with love and commitment, making them the ultimate symbol of affection. Furthermore, stakeholders shape the market by using diamonds as gifts for a range of celebrations such as births, weddings, and anniversaries. This unique status and absence of alternative options make diamonds extremely coveted in the jewelry industry.

Gold, silver, and platinum can serve as substitutes for diamonds in some cases; however, they are commonly used alongside diamonds in consumer jewelry since diamonds are often set on gold or silver. Although a significant number of synthetic diamonds are manufactured annually, the majority (3 billion carats) is utilized for industrial purposes. Only a small quantity of synthetic diamonds with gem quality (a few thousand carats) is produced each year specifically for jewelry compared to the production of 120 million carats of natural diamonds. Given that only a minimal percentage (0.1%) of natural diamonds produced annually are not clear, synthetic diamonds designed for the jewelry industry usually have coloration to meet the high demand from consumers seeking colored gems (Stein, 2001).

Diamonds, being irreplaceable, are considered an elastic commodity. De

Beers has successfully created an emotional value for diamond jewelry, making it a necessity for marriage proposals and various special occasions like anniversaries and birthdays (Stein, 2001). Today, diamonds are viewed as the ultimate symbol of lasting love and dedication, leading consumers to willingly pay a high premium for them. The demand for diamonds continuously grew over the 20th Century, while prices also significantly rose during that time (Stein, 2001).

South Africa's diamond production has been steadily increasing since the 1870s when diamond fields were discovered. More than 4.5 billion carats have been mined, with 20% of that amount being extracted within the past five years alone. The rise in production can be attributed to the growing global demand for diamonds, largely influenced by De Beers group's marketing efforts. As mentioned before, De Beers successfully marketed diamonds as a symbol of love and commitment, making diamond rings an essential part of marriage proposals since the 1930s.

The well-known slogan "Diamonds are forever" was created by De Beers to give diamonds sentimental value and limit their private sales. Despite the public currently owning over 500 million carats of gem diamonds, which is more than fifty times the annual production of the diamond cartel, this strategy has not decreased the demand for new diamonds from high street jewelers (Stein, 2001). De Beers also played a crucial role in expanding consumer markets for diamonds globally, successfully increasing the demand for diamond jewelry in countries like Brazil, Germany, and Japan. In response to Russia's abundant but small rough diamond production in the 1960s, De Beers adjusted their marketing campaigns. They promoted multiple small diamonds set on one

piece of jewelry instead of a single large stone to match the available supply.

Due to the global economic crisis, there has been a notable decline in the demand for diamonds. In previous periods of economic recession, De Beers maintained high prices and upheld the image of diamonds as a luxury item through their exclusive market control.

De Beers Diamond company's corporate social responsibility has been a topic of controversy due to its involvement with conflict diamonds. During the civil wars in Angola and Sierra Leone in the 1990s, De Beers purchased conflict diamonds amounting to $1.2 billion in order to safeguard its competitive position. However, this action received significant backlash as it was perceived as unethical conduct by the company. Consequently, the United Nations imposed sanctions on conflict diamonds and there were targeted consumer boycotts and activist campaigns against De Beers.

Assuming you are the leader of the most influential stakeholder group, create a plan to form a stakeholder coalition with the purpose of addressing your chosen controversial issue. This plan should outline the key steps to identify members for your coalition group, explain why you believe this particular target group can help accomplish your goal, and describe the method you would use to foster collaboration among the various groups you target.

Additionally, De Beers initiated a "Kimberly Process" in 2000 to alleviate their poor public relations image and rebuild brand equity. This process involved almost 70 industry players committing to a strict certification process for the legitimate origin of diamonds. Since its implementation in 2003, the Kimberly Process has significantly reduced the number of conflict diamonds to 0.2% of global production (Burne, 1996).