De beers five force analyze (Essay Sample)

De beers five force analysis Name Course Institution Instructor Date De beers five force analysis The Porter’s five forces model for De Beers represents several challenges and opportunities in the dynamic diamond industry. As a strong player in this sector, De Beers has been trying to maintain its dominance and competitiveness through various strategies. Threat of substitutes Synthetic diamonds are increasingly becoming a major challenge to natural diamonds on various grounds. In this regard, De Beers has been trying to highlight the exclusiveness of natural diamonds and focus on research to create a distinction between man-made and natural diamonds. In the same way, the company has been conducting extensive CSR in order to educate the masses on its products  ADDIN EN.CITE De Beer200912(De Beer & Schils, 2009)12126De Beer, P.Schils, T.2009CheltenhamEdward Elgar9781848444782http://books.google.com/books?id=N9v6qjJvqDMC( HYPERLINK \l "_ENREF_2" \o "De Beer, 2009 #12"
De Beer & Schils, 2009). Competitive Rivalry The emergence of new diamond producers within the industry has led to several challenges for De Beers. Some of the companies have flooded the market with cheap products while others are engaging in price manipulation in order to gain control of the market. In the same way, hoarding has become very commonplace. Threat of new entrants Despite the plentiful nature of diamonds, it is much difficult for new entrants to find their way into the market. The industry is much protected while the mines are located in politically unstable countries  ADDIN EN.CITE D'aveni199411(D'aveni, 1994)11116D'aveni, R.A.1994New YorkFree Press9780029069387http://books.google.com/books?id=IAy6yDjk25UC( HYPERLINK \l "_ENREF_1" \o "D'aveni, 1994 #11"
D'aveni, 1994). In this regard, many potential entrants shy off. The huge capital investment required will always bar many potential players from the market  ADDIN EN.CITE De Beer200912(De Beer & Schils, 2009)12126De Beer, P.Schils, T.2009CheltenhamEdward Elgar9781848444782http://books.google.com/books?id=N9v6qjJvqDMC( HYPERLINK \l "_ENREF_2" \o "De Beer, 2009 #12"
De Beer & Schils, 2009). Suppliers’ bargaining power The industry is facing much forward and backward integration as mines ar...