New Competitiveness Challenges of de Beers Company - Essay Example

The tool permits a systematic and disciplined evaluation of internal and external factors. Equally appropriate for the present case is the PESTEL tool using which, one can analyze the political, economical, social, technological, environmental, and legal angles, to test strategy options. PESTEL factors substantially deal with the external situation within which a company has to operate.
Key issues
De Beers’ strengths lie in its knowledge of the industry in all its facets – from mining to retail marketing of jewels – and the controlling interests it had created through subsidiaries, cross holdings, and trading practices. However, this very breadth of monopolistic operations has drawn adverse public attention. The Discovery and development of mines outside of Africa by other companies and the growth of the synthetic diamond industry are the other major weaknesses of the company.

The political situation in Africa where De Beers has its major mining interests has been undergoing significant change since the dismantling of apartheid. Socioeconomic factors like poor pay and working conditions, child labor, and inadequate welfare measures are issues of concern for the public. While it is at the forefront of exploiting technology in operations, the degradation of the natural environment, particularly in opencast mining operations, puts additional responsibility on the company. Anti-trust laws and a ban on child labor practices add to its cup of PESTEL woes.
Thus, the key issues as per SWOT and PESTEL analyses are to retain its status as a major but enlightened player and sustain profitability by exploiting its experience and market knowledge.
Parallel cases
De Beers is in the company of other global companies like Microsoft, MacDonald, and Wal-Mart in terms of the sweep of operations and breadth of controversies. Microsoft is accused of suffocating competition, MacDonald of unsustainable use of packing materials, and Wal-Mart of exploiting cheap labor in China and other Asian countries in its bid to offer the lowest cost products.

Strategies for future
Leveraging its knowledge and technology, the company has to enhance the efficiency of operations, both vertically and horizontally. Acquiring rights for mines in new areas around the globe, investing in technology for improving the value-added yield from rough
diamonds, partnerships with local governments for integrating the socio-economic development of local people with the business objectives of the company are the strategies for the future.
Conclusion
SWOT and PESTEL tools help to analyze and identify key issues for developing future strategies for De Beers. Emphasis for the future should be more on quality than on quantity to improve efficiencies and profitability. In the current situation of global awareness and instant adverse publicity, it is also necessary that the operations of the company are fully in compliance with internationally acceptable policies.