In the few past years, the industry of diamond evolved a lot.
Even if De Beers was the juggernaut of this industry, it has to evolve has well to keep its competitive position. What used to be its unique resources and distinctive competences and how De Beers decided to make it evolve? First of all, let’s studying the physical resources of De Beers. The company used to have the monopole of rough diamonds : it owned 80% of the world production 15 years ago but now it produces less than half of the world production.Nevertheless, the company still owns a lot of mines, it remain the number one producer of rough diamonds and has got an unrivaled distribution network. To finish with physical resources, De Beers has a huge stock of diamonds as it was a monopoly before.
Human resources are also a major component of a firm. De Beers know that and invested in exploration and research & development teams. In addition to that, has De Beers is one of the oldest diamond company, it has some reliable local workers on any mining site. The organizational resources are well developed too.
De Beers has some efficient managers able to evolve with the environment.Concerning the distribution, the management decided to choose a selective distribution channel and the marketing strategy has high performances which is a good point but it is not what can alone guarantying the success of a company. De Beers enjoys a good financial health since it has the biggest turnover of the sector. Thus, this financial position gives good strength to the company which is a great advantage compare to the competitors. As De Beers is one of the pioneer of the sector, it has been able to develop two other resources: the first one concerns its technology and its know-how developed through its long experience in the diamond.The second one is much more important; it concerns the reputation of the brand.
Indeed, since the company has got a old story, its reputation is strong and De Beers enjoys respectability of the sector. Having a strong image is an essential resource because it is really difficult to get and so it gives great competitive advantage because of the difficulty to get this resource for competitors. Much more important than resources, competences give to a company a real competitive advantage on its competitors. Nevertheless, it is more difficult to develop some distinctive competences and that is why a company can only develop a few of them.One of the most important competence the company developed is the capacity of negotiation with governments which gives a major advantage on competitors.
The company developed this competence all along its history as far as it used to involve in the political sector in countries in which De Beers was established. Other competence De Beers has acquired is its offensive marketing strategy which is very efficient with the selective distribution channel selected and the intentional limitation of number of customers. So that, even if the company is not a monopole anymore, it keep control on its resources and on its sales.This strategy leads the company to be a supplier of choice and very reliable since it as a great image among the customers. Last but not least, management is also a competence that De Beers acquired.
There are two component of management that the company developed as a competence. First, concerning the human resources, R&D, exploration teams and local workers are well managed which leads to an efficiency and a loyalty from its employee, so that, the company can rely on them. Other side of management is the management of stocks which is cleverly done and this able the company to maximize its profit.
