Crisis at De Beers – 1992

Description

Crisis at De Beers – 1992: Abstract

De Beers Mining Company Ltd. was established in 1880 and soon merged with other major mining forces in South Africa. By 1900, De Beers controlled 90% of the world’s rough diamond supply. This case describes three potential threats to the monopolistic business model of De Beers Consolidated Mines in 1992: the sudden availability of diamond supplies from two important sources – Russia and Angola – and the discovery of a significant new source in Canada’s Northwest Territories. Although this case is set in 1992, it is still useful to students in 2017 because of the company’s easily understood business model and its use of the key pillars described by the VRIN model of strategic capabilities.

Teaching objectives

This 20-minute, in-class, instructor-led exercise is designed to help students acquire a deep understanding of the VRIN/VRINE/VRIO model derived from the resource-based view (RBV) of companies.

Main themes covered

Sustaining competitive advantage in the face of new sources of competition and macro-environmental threats.

Concepts and theories related to the case

VRIN/VRINE/VRIO model derived from the resource-based view (RBV) of companies.

Additional information

Also available in French.

Teaching notes are available for teachers only. Contact the HEC Montréal Case Centre for more information.