PEST-analysis-about-De-Beers.docx

PEST analysis about De Beers“A diamond is forever” is a very classics advertisement in the advertisement world, but the company about de beers is more classical more this sentence in the world.De beers was established in 1888 and is the world leading diamond company with unrivalled expertise in the exploration, mining and marketing of diamonds. From its mining operations across Botswana, Namibia, South Africa and Canada. De beers produces and markets approximately 40% of the worlds supply of rough diamonds.1888, Cecil Rhodes establish de beers in South Africa. Its early strategy was succesful by prove. At that time, most of diamond was produced in South Africa especially in Kimberley. Through 8 years development, Cecil Rhodes corner the diamond produce market in Kimberley. Because he corner the marker, he use a lot of ways to control the price. In this case, de beers got a huge profit and this situation continue until Oppenheimer faction control de beers.Before 21 century, de beerss strategy is very simple. Because of it control most of diamond mining in the world, it built a Central Selling Organization in London. All of the prchaser only can decide buy or not, they cant decide price. When somewhere find new diamonds mining, de deers will use their strong financial to buy it. On the other hand, if some company want sell diamonds which they mine by themselves, the central selling organization will release huge of diamonds on the market in the short time. In order to let diamond price goes down quickly, let other company cant suffer loss. On the other way, If the price of diamond was down, de beers will buy superfluity diamonds to keep price high.Because of this power of contraling, de beers got a great influence in the world, especially in diamond world. In my opinion, some western country maybe use this company influence to interfere other country which produce diamond. Before the Kimberley treaty, there are so much diamonds which called blood diamonds. It means it come from conflict area. Some western country usually make some conflict in this area and sell weapon in this area. Some factions which control the diamond mining only can sell diamonds to buy weapon. So using de beers is the best way to indirect control these kinds of country. With time past, the situation has a great change. De beers bit by bit lose his absolutely control position. More and more diamond mining were founded in the world. The output of rough diamonds got a siginificant decline from 90% to 10%. It is a huge change. On one hand, de beers dont have enough money to buy all of the mining, on the other hand, most of other countrys gorvernment prevent de beers to buy their diamond mining, in order to protect local economic. In this case, traditionary way is not access. De beers need to change his policy.On the economic way, they change a lot. He begin to built some strategic alliance. For example, he make alliance with Russia, exploring diamonds with Tanzania, Namibia and so on. The funny things is de beers dont regard themselves as a king,he began to know what is teamwork and cooperation. On the other hand, he began to choose their cooperative company very carefully. The benefit of this behavior is it can much better than before, they choose some company which more big and more influnce. It also can help de beers improve their influnce. Another benefit is de beers use their limit diamonds sourse to support some important partner, it both good for them. Another way is he produce his diamonds international. De beers put their manufacture factory in some country which have a very low labor cost, such as India.The most wonderful change is de beers begin to get in luxury goods market. It means not only de beers just sell rough diamonds, but he also direct sell diamonds goods to costumers. In 2000, De beers and LVMH established a new company together. They are both pay 50% for the new company. De Beers supply rough diamonds and LVMH was responsible for design. As we know, luxury goods are one of things which earn money most in the world. This way means de beers can direct to sell diamond to normal customers. we can regard as de beers open a new area to earn money.On the social, I think De beers change several generations love opinion. From this way, it is very success. His classcial advertisement “ a diamond is forever” It make a link between love and diamond. As the linking, every girl want own a diamond when she marrage to prove their love. It looks very romantic, however, for De Beers it means more money. Nowadays, De Beers still publicize like this or even more. For example, in China, every years De Beers organise a lot of lovers to hold wedding together in some big city like Bei jing Shang hai, in order to publicize the opinion about marrage. Because of this opinion, American and Japan become the biggest diamonds market in the world. It brings huge profit to De Beers. Even though the financial crisis, the volume of diamond have a sharp decline, but it cant change the position of diamond in peoples mind. At once financial crisis disappear, diamonds volume must goes up. All of this because of the advertisement of De Beers. We can say, on the advertisiment, De Beers is very successful.On the technological, De Beers always be a lead. His technic always advance than other competitor. For example, the most advance technic in De Beers is exploration. Nowadays, diamond mining on the earth is less and less and people find there are also lots of diamond mining under the sea. So who can exploration mining under the sea means who can control diamond market in the fulture. Fortunatly De Beers have this advance technic and it much advance than other company. This is a huge advertages. Let me give some data to help you to understand. On the exploration ship, 37 workers