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Report on Argyle Diamonds and the Diamond Industry

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Report on Argyle Diamonds and the Diamond Industry

1 INTRODUCTION

India was the only known source of diamonds before the eighteenth century when diamonds were discovered in Brazil. The modern diamond industry was born in 1867 when diamonds were discovered in the Kimberley region of South Africa. The De Beers mining company was formed and they controlled 80-90 per cent of the rough diamonds entering the diamond market. The De Beers share of the diamond market fell in the 1990’s when the Soviet Union moved to a free market economy as Russian diamond mining companies were selling their diamonds on the open market. The Central selling Organisation (CSO) controlled by De Beers is responsible for regulating the price of diamonds on the market and marketing a large percentage of the world’s diamonds. The CSO protected the dominance of the diamond cartel but this monopoly was challenged by Argyle Diamonds when they refused to renew their marketing contract with De Beers. Argyle has been characterised by low value coloured diamonds, however their highly sought after pink diamonds has successfully differentiated their products from other diamonds the in the market (Vinciullo, Annear and Disbury, Not dated).

1.1 AIM OF THE ASSIGNMENT
The aim of the assignment is to research and analyse the diamond industry and to evaluate Argyle Diamonds’ strategic position in the diamond industry.
1.2 OBJECTIVES OF THE ASIGNMENT
• To research and evaluate competition in the precious stone (diamond) industry by doing a six force analysis.
• To identify the forces operating in the precious stone (diamond) industry’s macro-environment that have the power to alter the nature and structure of competition in the precious stone (diamond) business.
• To identify the key success factors for firms in the precious stone (diamond) business.
• To analyse what a SWOT analysis

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