This 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, in order to test strategy options. PESTEL factors substantially deal with the external situation within which a company has to operate.
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. Discovery and development
Political situation in Africa where De Beers has its major mining interests has been undergoing significant change since dismantling of apartheid. Socio-economic factors like poor pay and working conditions, child labor and inadequate welfare measures are issues of concern for public. While it is in the forefront of exploiting technology in operations, degradation of natural environment, particularly in opencast mining operations, puts additional responsibility on the company. Anti-trust laws and ban on child labor practices add to its cup of PESTEL woes.
De Beers are in the company of other global companies like Microsoft, MacDonald and Wal-Mart in terms of 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 lowest cost products.
Leveraging its knowledge and technology, the company has to enhance efficiency of operations, both vertically and horizontally. Acquiring rights for mines in new areas