Strategic Formulation Analysis For De Beers International Corporation

Strategic Formulation Analysis For De Beers International Corporation
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Strategic Formulation Analysis For De Beers International Corporation
INTRODUCTION
Background in Brief
De Beers has been a monopoly in the diamond industry until the late 1990s. During this time, the company faced a dilemma as to whether it could join the market of making and selling a synthetic diamond or not. The only competition that the De Beers faced was selling a synthetic diamond, sold at a lower price than natural diamond. Their new strategy was demand-driven and aimed at developing their brand.
DeBeers underwent significant changes following the Soviet fall in 1991. The company had been buying all the diamonds from the Soviet Union. When the union failed, De Beers could no longer enforce contracts, which led to the fall in diamond prices. By 2007, the company was producing and selling approximately 40% of the world's diamonds (McAdams, D., & Reavis, 2008).
The Organization Today
The history of De Beers has acted as a key factor in its strategic planning. Currently, the company no longer focuses on being a monopoly but aims to maximize profits. Therefore, it has laid down various strategies such as pricing their diamond depending on the market's prices. Such a strategy has prevented the company from buying a diamond at a price close to the market value. De Beers has also invested in the blockchain market, thus enabling it to track the diamond value chain.
De Beers is one of the world's largest companies in the Diamond Industry. However, it has lost a substantial size of the diamond's market share due to the competition. It faces a lot of competition from giant companies in the diamond industry, such as Harry Winston, Algore, and Aber Diamond. The reduction in market share has affected the company's profitability, as indicated by its declining revenues in the last five years.
The company has not been performing well since 2017. During this year, the company's total revenue fell by four percent. In 2019, De Beers reported a twenty-five percent decrease in sales from the previous year. In 2020, the total revenues decreased by fifty-four percent of the prior year. The poor performance attributes to Covid 19 on the economy (Grigoryeva, Evstafeva & Sentizova, 2020). 
Mission
De Beers mission statements stated on its website as the company's purpose: 
"In the De Beers family of companies, we have one purpose: 'We are driven to turn diamond dreams into lasting reality".
The mission statement indicates that the company focuses on fulfilling its shareholders' needs regarding diamonds' purchase. It plans to bring the dreams of the rich into a reality by offering them the diamond they would wish to buy with their riches. The mission statement indicates the company's commitment to being the leading diamond seller in the industry. 
Goals and Objectives  
De Beers' mission statement is an indication that the company focuses on giving its best to the stakeholders. Such would be possible by providing an intelligent life to those involved with the company. It is a reflection of how the end-user benefits...