De Beers SA
A Diamond is Forever
As the meeting concluded and Gareth Perry left the expansive conference room of De Beers SA in Johannesburg he had a lot to think about. The company had recently settled its litigation with the US anti-trust courts and was free to begin selling rough diamonds directly to customers in the United States.
The US retail diamond market was worth approximately $28.7 billion in 2002. Traditionally De Beers had served this market indirectly through its network of resellers, polishers and merchants. This strategy had been complemented by De Beers marketing efforts using its famous ?A Diamond is Forever' tag line. This combination had allowed De Beers to circumvent the regulation imposed on it by the anti-trust regulation. But now, with the major lawsuit settled the company was free to operate directly in the United States.
Perry had been the international marketing director for De Beers SA for several years and had never faced such a challenge before. Should the company continue its strategy as the marketer for the whole diamond industry and stimulate US demand in this manner or should it examine new channels to market for its rough diamonds.
Background
The long history of De Beers began back in 1859 when the first reports surfaced of diamonds being found in the Kimberley region of South Africa's Northern Cape. The rush to this area increased when the 83.5 carat "Star of Africa" was discovered in 1869 .
One of the people drawn to this area was a 17 year-old Englishman, Cecil Rhodes. Rhodes came to South Africa in a time when permits for diamond mining were restricted to individual claims with caps on how many claims one person could own. Rhodes initial foray into business was to buy an ice-making mac ...