Publications
Publications
- February 2017
- HBS Case Collection
The De Beers Group: Exploring the Diamond Reselling Opportunity
By: Benjamin C. Esty, Daniel P. Gross and Lauren G. Pickle
Abstract
In September 2014, Tom Montgomery (SVP of strategic initiatives at the De Beers Group) and his team launched a pilot program in the United States to explore the $1 billion diamond market for pre-owned (recycled) diamonds. According to Montgomery, the motivation for the pilot program was to improve the consumer reselling experience and to enhance "diamond equity". Somewhat paradoxically, consumers typically received very low prices when they tried to sell diamonds (5-20% of the original retail price) leaving them reluctant to purchase diamonds in the future and making them into ambassadors of ill will. At a meeting scheduled for November 2015, the De Beers Executive Committee would have to decide whether to end the pilot program, extend it for another year to gather more information, or convert it into a new standalone business unit. Because De Beers had historically focused on producing rough diamonds (the "upstream" business), yet the new business unit offered an opportunity to enter and enhance the market for polished diamonds (the "downstream" business), the decision was particularly noteworthy.
Keywords
Diamonds; Go-to-market Strategy; Secondary Market; Willingness To Pay; Pilot Program; Strategy Development; Strategy Execution; Scope; Marketing; Advertising; Branding; Customer Value; Pawn Shops; Jewelry; Supply And Demand; Corporate Strategy; Business Strategy; Vertical Integration; Advertising Campaigns; Value Creation; Retail Industry; Consumer Products Industry; Advertising Industry; Mining Industry; United States; United Kingdom; Africa; Botswana; South Africa; Namibia
Citation
Esty, Benjamin C., Daniel P. Gross, and Lauren G. Pickle. "The De Beers Group: Exploring the Diamond Reselling Opportunity." Harvard Business School Spreadsheet Supplement 717-806, February 2017.