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Essay / Research Paper Abstract
This 4 page paper considers the dominance of De Beers compnay on the diamond industry from an economic perspective. The paper shows how the compnay has sought to manage the process of diamonds by managing and manipulating the supply and demand factors. This is discussed with examples of De Beers strategies and practices. The bibliography cites 6 sources.
Page Count:
4 pages (~225 words per page)
File: TS14_TEDEBerEc.rtf
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Unformatted sample text from the term paper:
dictate the value of a good. The true value of diamonds, if left to natural market forces, would be well below the current prices, even allowing for the value adding
aspects such as cutting and polishing. De Bears has been the main diamonds supplier to the global diamond market, a position it has used to manipulate the markets to kelp
the prices of diamonds high, they have does this by seeking to manipulate and control both the supply and the demand for diamonds. De Beers had historically controlled up
to 895% of the market and sought to influence other suppliers. Their dominance is not only in the owning of the mines, but also the ownership of the distribution
system for diamonds as well as the control of the control selling organizations for diamonds (Carstens, 2001, Stein, 2001). The organizations structure of De Beers is very complex, with many
subsidiary mining and trading companies (Stein, 2001) The prices have been retained high by the careful management of supply and demand in lie with general economic principles, so that the
demand is high and so that the supply ensures that prices remain (Nellis and Parker, 2000). The control over the supply over the years has seen many tactics used.
The compnay would have external; offices of its own competing with the external purchasers to keep prices up (Stein, 2001). The way diamonds should be purchased was limited to 10
sights a year, these were processes that were highly controlled by De Beers. De Beers would have the sole control over how many diamonds were sold and they would also
set the price, only inviting a fixed number of buyers to each sale, usually between 120 - 250 sightholders (Carstens, 2001). When they were buying the diamonds they would be
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