Ablity and vision to

bring together the entire

diamond industry
powerful brand.people
willing to pay 15%
premium
Evasive strategy
new and
aggressive
shareholders
realized "all
cash no dash"
no bold
acquisitions
heavily
invested in
anglo-
american
legal issues in
united states
stockpiling
led to
undervalued
stockprice

Pre 1998 Post 1998

Null. As there was a situation of complete
monopoly, there was no rivalry.
Rivalry existed, but was very weak, as they
still controlled almost 60% of the output
of the biggest market
Pre 1998 Post 1998
Very strong cartelization led to superior
bargaining power of suppliers. They were
also able to control the prices through
market buy back and maintain a stock pile.
With a fall in luxury brand values, the strain
on stockpile increased and the new share
holders forced De Beers to offload the
stock pile. This reduced the pricing
control ability of supplier (De Beers)

Pre 1998 Post 1998

Very low, due to level of cartelization. The
supply was controlled by De Beers and this
allowed them to control the price. This was
the main reason that anti-trust law was
being forced upon De Beers
Increased to a certain extent with the new
entry of Angola, Russia and Australian
diamond producers. When they off-loaded
their diamonds at lower prices, the now
weak De Beers could not buy to control the
prices.
Pre 1998 Post 1998
Very low for suppliers as the industry was
very closely held and cartelized
After 1992, De Beers had to face double
blow of defection from Russian and
Angolan and new independent diamond
developers in Australia. After the Asian crisis
in Far East, the overall control of De Beers
on suppliers in the Diamond market came
down to 60% , even at generous estimates.
The buyers were limited to sight-holders,
for whom sights took place in closed
rooms of London
After the opening up of the suppliers
market, fell of shares and entry of American
stock holders, no more was it possible for
the company to maintain a stockpile as it had
over the years. Thus, the market, though
highly capital intensive was open for new
entrants.
Threats of New Entrants