De Beers Group: Marketing Diamonds to Millennials SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of De Beers Group: Marketing Diamonds to Millennials
In 2017, the next generation of consumers that were poised to become engaged to be married-millennials-showed different preferences and consumption patterns than previous generations had shown. In response, the De Beers Group of Companies (De Beers), a leading company within the global diamond industry, was making moves to capture this important market. In partnership with the world's six other leading diamond companies, known collectively as the Diamond Producers Association, De Beers launched a campaign titled "Real is Rare" with the goal of persuading millennials into believing that diamonds were an important symbol of romantic commitment, even in 2017. Would these marketing endeavours be successful in changing the millennial mindset, or would the campaign fall flat? Would diamond engagement rings continue to be the ultimate symbol of commitment? What could De Beers do to encourage sales of diamonds in a changing world? Stefanie Beninger is affiliated with Simon Fraser University. Karen Robson is affiliated with Central Michigan University.
Swot Analysis of "De Beers Group: Marketing Diamonds to Millennials" written by Stefanie Beninger, Karen Robson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Beers Diamond facing as an external strategic factors. Some of the topics covered in De Beers Group: Marketing Diamonds to Millennials case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the De Beers Group: Marketing Diamonds to Millennials casestudy better are - – increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, wage bills are increasing, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, geopolitical disruptions, increasing transportation and logistics costs,
increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of De Beers Group: Marketing Diamonds to Millennials
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in De Beers Group: Marketing Diamonds to Millennials case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Beers Diamond, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Beers Diamond operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of De Beers Group: Marketing Diamonds to Millennials can be done for the following purposes –
1. Strategic planning using facts provided in De Beers Group: Marketing Diamonds to Millennials case study
2. Improving business portfolio management of Beers Diamond
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Beers Diamond
Strengths De Beers Group: Marketing Diamonds to Millennials | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Beers Diamond in De Beers Group: Marketing Diamonds to Millennials Harvard Business Review case study are -
Sustainable margins compare to other players in Sales & Marketing industry
– De Beers Group: Marketing Diamonds to Millennials firm has clearly differentiated products in the market place. This has enabled Beers Diamond to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Beers Diamond to invest into research and development (R&D) and innovation.
Strong track record of project management
– Beers Diamond is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Beers Diamond is present in almost all the verticals within the industry. This has provided firm in De Beers Group: Marketing Diamonds to Millennials case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Analytics focus
– Beers Diamond is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Stefanie Beninger, Karen Robson can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
High brand equity
– Beers Diamond has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Beers Diamond to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Sales & Marketing field
– Beers Diamond is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Beers Diamond in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the De Beers Group: Marketing Diamonds to Millennials Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Innovation driven organization
– Beers Diamond is one of the most innovative firm in sector. Manager in De Beers Group: Marketing Diamonds to Millennials Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Beers Diamond has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in De Beers Group: Marketing Diamonds to Millennials HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Beers Diamond is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Beers Diamond is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in De Beers Group: Marketing Diamonds to Millennials Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Beers Diamond has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Superior customer experience
– The customer experience strategy of Beers Diamond in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses De Beers Group: Marketing Diamonds to Millennials | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of De Beers Group: Marketing Diamonds to Millennials are -
Lack of clear differentiation of Beers Diamond products
– To increase the profitability and margins on the products, Beers Diamond needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As De Beers Group: Marketing Diamonds to Millennials HBR case study mentions - Beers Diamond takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Slow decision making process
– As mentioned earlier in the report, Beers Diamond has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Beers Diamond even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study De Beers Group: Marketing Diamonds to Millennials, is just above the industry average. Beers Diamond needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Products dominated business model
– Even though Beers Diamond has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - De Beers Group: Marketing Diamonds to Millennials should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study De Beers Group: Marketing Diamonds to Millennials has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Beers Diamond 's lucrative customers.
High cash cycle compare to competitors
Beers Diamond has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of Beers Diamond, firm in the HBR case study De Beers Group: Marketing Diamonds to Millennials needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Stefanie Beninger, Karen Robson suggests that, Beers Diamond is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Beers Diamond supply chain. Even after few cautionary changes mentioned in the HBR case study - De Beers Group: Marketing Diamonds to Millennials, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Beers Diamond vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study De Beers Group: Marketing Diamonds to Millennials that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case De Beers Group: Marketing Diamonds to Millennials can leverage the sales team experience to cultivate customer relationships as Beers Diamond is planning to shift buying processes online.
Opportunities De Beers Group: Marketing Diamonds to Millennials | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study De Beers Group: Marketing Diamonds to Millennials are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Beers Diamond can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Beers Diamond in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Beers Diamond can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Beers Diamond can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Using analytics as competitive advantage
– Beers Diamond has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study De Beers Group: Marketing Diamonds to Millennials - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Beers Diamond to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Beers Diamond in the consumer business. Now Beers Diamond can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Beers Diamond to increase its market reach. Beers Diamond will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Beers Diamond can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Beers Diamond can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Buying journey improvements
– Beers Diamond can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. De Beers Group: Marketing Diamonds to Millennials suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Beers Diamond is facing challenges because of the dominance of functional experts in the organization. De Beers Group: Marketing Diamonds to Millennials case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Beers Diamond can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Beers Diamond can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Low interest rates
– Even though inflation is raising its head in most developed economies, Beers Diamond can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Threats De Beers Group: Marketing Diamonds to Millennials External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study De Beers Group: Marketing Diamonds to Millennials are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study De Beers Group: Marketing Diamonds to Millennials, Beers Diamond may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Stagnating economy with rate increase
– Beers Diamond can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Shortening product life cycle
– it is one of the major threat that Beers Diamond is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Beers Diamond can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Beers Diamond needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Beers Diamond will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Regulatory challenges
– Beers Diamond needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Increasing wage structure of Beers Diamond
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Beers Diamond.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Beers Diamond with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Beers Diamond in the Sales & Marketing sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Beers Diamond can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study De Beers Group: Marketing Diamonds to Millennials .
Environmental challenges
– Beers Diamond needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Beers Diamond can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Weighted SWOT Analysis of De Beers Group: Marketing Diamonds to Millennials Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study De Beers Group: Marketing Diamonds to Millennials needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study De Beers Group: Marketing Diamonds to Millennials is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study De Beers Group: Marketing Diamonds to Millennials is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of De Beers Group: Marketing Diamonds to Millennials is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Beers Diamond needs to make to build a sustainable competitive advantage.