Forever: De Beers and U.S. Antitrust Law SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Forever: De Beers and U.S. Antitrust Law
For over a century, the international diamond market has been dominated by one of the most successful cartels on earth. Run by the legendary De Beers Corp., the cartel has managed to keep diamond prices increasing and to prevent the defection that dooms most other "orderly marketing arrangements." It has also managed to uphold one of the greatest marketing coups of history: convincing millions of customers that diamonds are actually rare and therefore highly prized. There is only one problem for the cartel. It is illegal in the United States (the world's largest market for gem diamonds) and has been under constant attack by the U.S. Justice Department. The case describes how De Beers has dealt with this problem in the past and how, in the late 1990s, changes in the African political situation and the world diamond market may suggest a new relationship with the U.S. government.
Swot Analysis of "Forever: De Beers and U.S. Antitrust Law" written by Jennifer Burns, Debora L. Spar 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 Forever: De Beers and U.S. Antitrust Law case study are - Strategic Management Strategies, Competition, Regulation and Global Business.
Some of the macro environment factors that can be used to understand the Forever: De Beers and U.S. Antitrust Law casestudy better are - – there is increasing trade war between United States & China, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, wage bills are increasing,
customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Forever: De Beers and U.S. Antitrust Law
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Forever: De Beers and U.S. Antitrust Law 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 Forever: De Beers and U.S. Antitrust Law can be done for the following purposes –
1. Strategic planning using facts provided in Forever: De Beers and U.S. Antitrust Law case study
2. Improving business portfolio management of Beers Diamond
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Beers Diamond
Strengths Forever: De Beers and U.S. Antitrust Law | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Beers Diamond in Forever: De Beers and U.S. Antitrust Law Harvard Business Review case study are -
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Beers Diamond are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Effective Research and Development (R&D)
– Beers Diamond has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Forever: De Beers and U.S. Antitrust Law - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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 Jennifer Burns, Debora L. Spar 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.
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 Forever: De Beers and U.S. Antitrust Law HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Global Business industry
– Forever: De Beers and U.S. Antitrust Law 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 Global Business industry. The sustainable margins have also helped Beers Diamond to invest into research and development (R&D) and innovation.
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 Forever: De Beers and U.S. Antitrust Law Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Beers Diamond is one of the most innovative firm in sector. Manager in Forever: De Beers and U.S. Antitrust Law Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Beers Diamond has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Forever: De Beers and U.S. Antitrust Law Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Organizational Resilience of Beers Diamond
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Beers Diamond does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Beers Diamond is present in almost all the verticals within the industry. This has provided firm in Forever: De Beers and U.S. Antitrust Law 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.
Weaknesses Forever: De Beers and U.S. Antitrust Law | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Forever: De Beers and U.S. Antitrust Law are -
Aligning sales with marketing
– It come across in the case study Forever: De Beers and U.S. Antitrust Law 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 Forever: De Beers and U.S. Antitrust Law can leverage the sales team experience to cultivate customer relationships as Beers Diamond is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Forever: De Beers and U.S. Antitrust Law, 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Forever: De Beers and U.S. Antitrust Law, in the dynamic environment Beers Diamond has struggled to respond to the nimble upstart competition. Beers Diamond has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Forever: De Beers and U.S. Antitrust Law 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 bargaining power of channel partners
– Because of the regulatory requirements, Jennifer Burns, Debora L. Spar 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.
Capital Spending Reduction
– Even during the low interest decade, Beers Diamond has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Forever: De Beers and U.S. Antitrust Law, it seems that the employees of Beers Diamond don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Need for greater diversity
– Beers Diamond has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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 - Forever: De Beers and U.S. Antitrust Law, 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.
Increasing silos among functional specialists
– The organizational structure of Beers Diamond is dominated by functional specialists. It is not different from other players in the Global Business segment. Beers Diamond needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Beers Diamond to focus more on services rather than just following the product oriented approach.
Opportunities Forever: De Beers and U.S. Antitrust Law | 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 Forever: De Beers and U.S. Antitrust Law are -
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 Global Business 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 Global Business 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.
Developing new processes and practices
– Beers Diamond can develop new processes and procedures in Global Business industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Beers Diamond can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Forever: De Beers and U.S. Antitrust Law, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
Buying journey improvements
– Beers Diamond can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Forever: De Beers and U.S. Antitrust Law 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.
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.
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.
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 Forever: De Beers and U.S. Antitrust Law - 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.
Manufacturing automation
– Beers Diamond can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business 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.
Building a culture of innovation
– managers at Beers Diamond can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Global Business segment.
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. Forever: De Beers and U.S. Antitrust Law 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.
Threats Forever: De Beers and U.S. Antitrust Law External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Forever: De Beers and U.S. Antitrust Law are -
High dependence on third party suppliers
– Beers Diamond high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Beers Diamond business can come under increasing regulations regarding data privacy, data security, etc.
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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Beers Diamond.
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.
Shortening product life cycle
– it is one of the major threat that Beers Diamond is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Global Business sector and impact the bottomline of the organization.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Beers Diamond in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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 Global Business industry.
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 Global Business industry. This will help it in building a better workplace.
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.
Easy access to finance
– Easy access to finance in Global Business 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.
Weighted SWOT Analysis of Forever: De Beers and U.S. Antitrust Law 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 Forever: De Beers and U.S. Antitrust Law 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 Forever: De Beers and U.S. Antitrust Law 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 Forever: De Beers and U.S. Antitrust Law 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 Forever: De Beers and U.S. Antitrust Law 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.