South%20Africa_Finsch_Diamond%20Mining.pngMarket Power



The diamond industry is fairly stable and the demand for diamonds continues to be equal to the production. There is one company, De Beers, who control the market. They produce 50-60% of the worlds diamond output. This along with the fact that almost all diamonds come from expensive underground mining, means that it is solely a corporate type industry. Because De Beers has almost monopolized this industry, and wants an orderly market, they control the supply and demand of diamonds, as well as the price. Because they have the power to raise the prices without losing its customers to competitors, they have market power.



Competitors




There are four main competitors in the diamond trade; De Beers in Johannesburg South Africa, ALROSA in Moscow Russia, BHP Billiton in Melbourne Australia and London, Rio Tinto Limited in Melbourne Australia and London.

Managing the Supply Chain


All of the competitors have to work with and manage their supply chains. Each supply chain requires integration and the work required to move the product through the channels. This requires developing business relationships and insight into negotiating business deals, cultivation of trust, quality service, purchasing, shipping, managing conflict, using power, applying influence, interactive technology and dealing with ethical issues. All of these things can be improved through collaboration, defining objectives to each member of the chain, and setting metrics that Sorting_Zimbabwe.pngmeasure expectations and improvements


Retail


Finally, jewelry is sold from the retailer to the consumer. The final diamond jewelry product is worth $31 billion in terms of diamonds, and $62.5 billion including the non-diamond components. The highest potential for profit lies in retail.

Retailers must focus on three key strategy imperatives:
  • Provide a high quality, differentiated customer experience by carrying the right products, at the right price and by having what the customer wants in stock.
  • Minimize costs in the supply chain to maintain margins and competitiveness by improving asset utilization, inventory visibility, and by ensuring that each division and supply chain partner has access to a uniform source of product and supply chain data
  • Identify ways to grow revenue beyond simply opening more stores by providing assortments that are tailored to specific stores
The ultimate goal of any retailer is to keep costs low and customer service high. The key to retail success is finding ways to attract and build profitable relationships with customers. Retailers need to understand customer wants and needs as well as trends in the marketplace while simultaneously helping enable employees to improve customer interactions at every stage of a transaction. Good customer service enables retailers to deliver shopping experiences that delight customers, create loyalty and ensure repeat business.
With diamonds, customers are looking for the best quality at the best price with a guarantee that the highest ethics were upheld in the attaining of the diamond.
Diamonds should come with a certificate. A diamond certificate is a report created by a team of gemologists. The diamond is evaluated, measured, and scrutinized using trained eyes, a jeweler’s loupe, a microscope, and other industry tools. A completed certificate includes an analysis of the diamond’s dimensions, clarity, color, polish, symmetry, and other characteristics. Many round diamonds will also include a cut grade on the report.
Consumers want to feel good about their diamond purchase. It is important that they are able to find a jeweler they feel they can trust. It is important that the jeweler is willing to spend time providing the information the customer wants/needs. A reputable jeweler should only use suppliers who can provide a guarantee that their diamonds are from sources free of conflict, have a conflict diamond policy, and be able to answer a customer's questions about the topic