This essay will start looking at the foundation of De Beers and how he initiated his marketing campaign and what the effect was on the prices of diamonds. Diamond is commonly known as a material that possesses unique qualities physically. It contains a strong covalent bond between its atoms. Diamond is majorly known for its hardness as well as lasts thermal conductivity in comparison with bulk material. Such properties make it useful in industrial application such as cutting and polishing tools.
Before the 19th century, diamond minerals were known to be rare as it was found in India and Brazil. During 1870, large mines for diamond deposits were discovered in South Africa at a place near Orange River. Such became a threat to the few diamond producers despite the large supply, thus made the commodity a luxury instead of a commodity.
Diagram - As we can see from Figure 1.1, the discovery of large mines in South Africa caused supply to increase which caused the price of diamond to fall.
In the year 1888, a body was formed known as De Beers Consolidated mines in South Africa by suppliers in order to secure a high market for diamond prices. Initially, diamond cartel successfully controlled the supply worldwide and regulation done at mine output and purchase of the exclusive right to mining nations across Africa. At the onset of the 20th century, De Beers dominated around 90 percent trade for diamond internationally which proved a monopoly as the diamond industry was mostly taken over by a single firm. An association was structured as other distributors and diamond miners were afraid that the value of diamonds will decrease.
Diagram - Figure 1.2 shows a rise in prices of diamonds as market supply was limited so demand for diamonds ...
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... strategy done by De Beers Corporation to sell to men, it leaves a remarkable mark as a sign of leadership to the masculine gender according to tradition. The diamond ring has acted as a signifier that someone has commitment with another. Also, the engagement ring has implied that the bigger the rock, the bigger the love. That will put pressure on who is purchasing. Pressure will be in the form of financial means as not everyone can afford it. Despite the costly diamond, De Beers control the price as well as the value of a ring. A person’s money would better off invest in a home than something adorning in another person in a relationship and later loses value. On contrary, there was human right violations as the labour involved in the extraction are exploited especially in Africa. However, engagement rings remains an important element during marriage and commitment.
The Rahr and Sons Brewing Company based in Fort Worth, Texas in USA was established in 2004 by Fredrick Rahr. Rahr studied brewing in Texas Christian University and later worked with a railroad company after which he built his own brewing company with the help of his family and friends. Rahr’s wife Erin was a great influence to Rahr’s decision to carry on with beer brewing which was a family tradition.
The demand-side of this cartel was primarily driven by advertising and in 1948, its world-renowned statement of “A diamond in forever” won over consumers like nothing had ever before. This associated an idea of a diamond being an “heirloom”, decreasing the chances of the resale market of diamonds booming. They were seen as “priceless”, similarly to love: something that is just immeasurable. De Beers ingeniously lead consumers towards buying their most fancy and rare cut of diamond to act as the talisman for love for their “female associates”.
Engagement rings initially served a double purpose. In the days when brides were purchased, these rings were partial payment for the bride in addition to symbolizing the groom's intentions and woman's agreement. Diamonds were first found in Medieval Italy and due to their hardness symbolized enduring love.
Final contribution of de beers to the diamond pipeline is the promotion of diamond jewelry for the industry; through advertising campaigns developed from extensive market research; trade promotional activities and jewelry design competitions
Some of the highest producing diamond mines are countries in Africa. Countries that had some of the highest rate of conflict were Angola, The Democratic Republic of Congo, Sierra Leone, and Liberia. The ...
It’s hard to imagine that a mineral could be fueling wars and funding corrupt governments. This mineral can be smuggled undetected across countries in a coat pocket, then be sold for vast amounts of money. This mineral is used in power tools, parts of x-ray machines, and microchips but mostly jewelry. Once considered the ultimate symbol of love, the diamond has a darker story. "Blood" diamonds or "conflict" diamonds are those mined, polished, or traded in areas of the world where the rule of law does not exist. They often originate in war-torn countries like Liberia, Sierra Leone, Angola, and Côte d'Ivoire were rebels use these gems to fund genocide or other questionable objectives. Even with a system known as the Kimberly process which tracks diamonds to prevent trade of these illicit gems, infractions continue as the process is seriously flawed. The continuation of the blood diamond trade is inhuman, and unethical, and in order to cease this illicit trade further action to redefine a conflict diamond, as well as reform to the diamond certification prosess is nessasary.
Deep within African mines, elusive diamonds lay enveloped in the Earth’s crust. Possessing much influence, beauty, and tension, nature’s hardest known substance causes parallel occurrences of unity and destruction on opposite sides of the globe. Diamonds, derived from the Greek word "adamas", meaning invincible, are formed deep within the mantle, and are composed entirely from carbon. Moreover, only under tremendous amounts of heat and pressure can diamonds form into their preliminary crystal state. In fact, diamonds are formed approximately 150km- 200km below the surface and at radical temperatures ranging from 900-1300 C°. When these extremes meet, carbon atoms are forced together creating diamond crystals. Yet how do these gems, ranking a ten on Moh’s hardness scale, impact the individual lives of millions of people besides coaxing a squeal out of brides-to-be? These colorless, yellow, brown, green, blue, reddish, pink, grey and black minerals are gorgeous in their cut state, but how are these otherwise dull gems recognized and harvested? Furthermore, how and why is bloodshed and violence caused over diamonds in Africa, the supplier of approximately 65% of the world’s diamonds? (Bertoni) The environmental, social, and economic impact of harvesting, transporting, and processing diamonds is crucial because contrary to popular belief, much blood has been spilled over first-world “bling”.
In the graph, it shows the law of demand; as the price increase there is a decrease in the quan...
Santarossa, B. (2004, January 13). Diamonds: Adding lustre to the Canadian economy. Retrieved November 06, 2017, from https://www.statcan.gc.ca/pub/11-621-m/11-621-m2004008-eng.htm
In “ “Blood Diamonds” and Africa’s Armed Conflicts in the Post – Cold War Era, “ Orogun (2004) said that diamonds are referring as “clean stones”. This article explains about the black market is really happening in African. I am using this article to support how the black market of diamond trades is still not regulated, and they defined it as “licit” trade.
[5] Diamond Industry Annual Review, De Beers Signs New Angolan Agreement, [internet] Accessed on: 13th November 2005, http://www.pacweb.org/e/images/stories/documents/addendum%20angola%202005-english.pdf
The film marker is trying to raise awareness of the illicit conflict diamond trade and reinforcing the Kimberley process1 and showing how it will stem the flow of conflict diamonds. This is successful mainly due to the public outburst after the movie. The great impact of the movie has caused diamond companies like De Beers2 to start a pre-emptive PR (public relationship) campaign, even before the movie was released to inform people that their diamonds are conflict-free.
Figure I I .4 illustrates the effects of an increase in demand. OD is the original demand curve so that the equilibrium price is P and quantity Q is demanded and supplied.
In the beer game, the two main problems that cause high inventory or backorder costs associated with the ordering policy of each participants; are the uncertain demand and the lack of communication between different participants in the game who are the retailer, wholesaler, distributer and manufacturer. In order to operate the supply chain efficiently, the participants of the beer game should be in a coordination to fulfill the customer demand.
Diamonds were created million years ago, when the earth was formed, the material experienced pressure of 5million times the atmosphere at sea level and temperatures between 1000~1200degreesC. These conditions caused carbon in the layers inside the planet to crystallize into diamonds. The diamonds moved up to the earth’s surface through volcano eruptions. This is why many Diamond mines are near volcanoes. Diamonds occur in two types of rock: Kimberlite and Lamprolite. Diamonds are mostly found in South Africa, India, Brazil, Russia, Australia, and Arkansas. Right now about 100million carats are mined each year. Today the largest cut Diamond in the world is the Cullian I at 530.2ct .