DE BEERS A DIAMOND IS FOREVER Robert Ewers
DE BEERS A DIAMOND IS FOREVER Robert Ewers Brian Moore James Keston Anna Sapozhnikova DE BEERS A DIAMOND IS FOREVER
AGENDA ¨ Industry Overview ¨ De Beer’s Cartel ¨ Responses to Changing Market ¨ A Diamond Is Forever ¨ Q&A DE BEERS A DIAMOND IS FOREVER
DIAMOND VALUE CHAIN Uncut Diamonds Cutting & Polishing $5 - $8 Billion Retailers $55 - $58 Billion DE BEERS A DIAMOND IS FOREVER
DE BEERS HISTORICALLY: THE SUCCESSFUL CARTEL ¨ Controlled Market Supply – – 90% of global diamond production Cooperative agreements Highest prices to producers Lowest-cost mines owned by De Beers ¨ Influenced Demand – $170 million advertising budget – Bundling and “Box” sales ¨ Earned Outsized Profits DE BEERS A DIAMOND IS FOREVER
DE BEER’S TODAY: CHALLENGES AND RESPONSE ¨ Two Significant Challenges – New mines constructed in 80’s and 90’s –“ War Diamonds ” ¨De Beer’s Response – Forward Integration – Joint Ventures (LVMH) – Strategy of differentiation ¨Result: Dissolution of Cartel DE BEERS A DIAMOND IS FOREVER
BUYERS OUTLOOK ¨Sentimental Value ¨Is “Forever" Worth That Much? ¨Happy Consumer Times DE BEERS A DIAMOND IS FOREVER
DE BEERS Q&A Robert Ewers Brian Moore James Keston Anna Sapozhnikova DE BEERS A DIAMOND IS FOREVER
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