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De Beers: Reverse-disrupting the Diamond Industry

Subject

Organisational Behaviour, Marketing, Marketing, Strategy and Entrepreneurship

Authors / Editors

Turconi S;Horton T;Rojanapenkul M

Biographies

Publication Year

2023

Abstract

Set in September 2018, the case describes De Beers’ attempt to halt the escalating disruption to its core business posed by diamonds grown in laboratories. Since its inception over a century ago, De Beers had created and nurtured the perception of diamonds as rare objects and exclusive symbols of love. But lab-grown diamond makers now had the capabilities to mass-produce and sell at a discount diamonds with the same optical, chemical and physical characteristics as natural ones, possibly jeopardising the entire mined-diamond industry. To counter the threat, De Beers introduced its own lab-grown diamond jewellery brand, called Lightbox. Lightbox diamonds were positioned as cheerful fashion items and sold directly to consumers at a substantial discount to generic lab-grown diamonds. Over its history, De Beers had had a remarkable track record of dwarfing competition. Would it succeed this time? Learning objectives Understand the factors that set luxury products apart from commodities. Disambiguate the notions of disruption and disruptive innovation and learn how to operationalise reverse disruption Understand the concept of ‘extendable core’ to gauge a disrupter’s strength. Explore the range of responses that incumbents can use to counter disruption. Learn how to quantify the efficiency and profitability of a company’s capital investments

Topic List

Strategy

Industry

Diamond industry

LBS Case Number

CS-19-005

Location

Global, International

Available on ECCH

No


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