Strategic managiment Essay Example | Topics and Well Written Essays - 2000 words

Strategic managiment - Essay Example DeBeers provides employment to more than 23000 employees worldwide and the main objective of the company is to make high quality diamonds and make a lasting contribution on the community (DeBeers, 2013h). The company has two major shareholders Anglo American with 85 percent holding and Government of the Republic of Botswana with 15 percent holding (DeBeers, 2013k). The DeBeers group of companies constitute of wholly owned subsidiaries, investment and partnerships in diamond making. The major tasks of DeBeers include exploration of diamonds and mining activities in three major diamond producing countries like Botswana, Namibia and South Africa. The company also specializes in sorting, valuation and sale of rough diamonds and the development of synthetic diamonds for major industrial applications (DeBeers, 2013e).The study will deal with the strategic analysis of DeBeers and its outcome during the tenure 2008 to 2009. The author of the study will also conduct a PESTLE analysis which wi ll highlight the impact of the external and internal forces on the business activities of De Beers. Finally, the study will also conclude with an analysis which would help in identifying the internal and external resources of the company. Analysis of Business Environment & Success factors of DeBeers The business environment analysis also helps the company in adapting a particular marketing environment and also the way it responds to certain environmental circumstances (Shaikh, 2010). The Porter’s Five Forces Model will be a significant macro environment analysis which will help in understanding the impact of the external and internal forces in a direct and indirect manner. Bargaining Power of Buyers: Diamond is regarded as one of the most precious and valuable jewellery item in UK and is also the most coveted jewellery in the world. As per a survey conducted by the Bain and Company it was analyzed that diamond was the most coveted jewellery among women in UK in the year 2008 (Bain and Company, 2011). In the same survey conducted in the year 2008 it was also observed that that at least 65 percent of the UK household owned at least one diamond jewellery in the household (Bain and Company, 2011). This reflects that in spite of recession in the UK the common people preferred investing in valuable jewellery like diamond and also regard it as a valuable gifting item. Since, diamond is one of the most valuable and requires extensive maintenance, the price of diamond is quite high and seldom there is any bargaining while purchasing the product. The bargaining power of the buyers is not very high in this industry. Bargaining Power of Suppliers: The supplier forms an integral part in the diamond industry because they helped the diamond companies in 2008 to maintain timely delivery of the jewellery for industrial and consumer applications. The suppliers are responsible for supply of crude diamond to the warehouses for cutting purposes and also for the supply of th e polished diamond in the retail shops. The bargaining power of suppliers in this industry is high. Threat of Substitutes: Although, compared to the other jewellery items diamond is regarded as one of the most valuable items in the world jewellery items like platinum and silver cannot be replacement for diamond. However, preference is given to diamonds and the threat of substitutes was very low in the industry. Due to