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.
To begin diamonds are can be found all over the world including countries like, Botswana, Canada, Namibia, Russia, South Africa, Australia, and Tanzania. Yet, diamonds are still quite rare and are only found from two dominant deposits. The primary deposits often consist of diamond-bearing “pipes” of volcanic rock called kimberlite. Deep within th...
Should diamonds be seen as such highly sought-after, luxury goods, and marketed and sold at such extravagant amounts? While some individuals might be of the impression that diamonds are lavishly priced, because of limited supply, it is of my opinion that a very shrewdly-created cartel disguises the very reason for these “rare” gems seemingly being worth your “pretty penny”.
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.
Diamonds were not bought as a store of value, they could not be traded in the same w...
A beautiful precious diamond can last forever, but what most people do not know is that a majority of our diamonds come from Africa. The civil wars in Africa over diamonds began around 1961 and ended in 2003. Conflict diamonds were rampant and it would be difficult to say if any jewelry sold prior to 2003 was conflict free. Conflict diamonds are diamonds that have been mined and were controlled by African rebels. The rebels would use the profits from selling conflict diamonds to fund illegal activity and to purchase more weapons for their armies. While rebels had control of the diamond mines they killed approximately 4 million people and countless families were displaced.
Said to be a girl's best friend, diamonds are often seen as a symbol of poverty, war, and death for many Africans. Due to the cruel and inhuman manner by which these diamonds are mined and process, the trade of these illicit gems must be stopped. Conflict diamonds or blood diamonds are often associated with war, forced labor, child labor, and smuggling. Paul Orogun wrote an article for in the journal, World Affairs, where he describes some of the brutal conflicts in recent African history. “Blood Diamonds and Africa's Armed Conflicts in the Post—Cold War Era”, in which he talks about the conflicts associated with the illegal diamond trade. Orogun de...
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.
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.
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.
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
[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
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 .
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.