CASE STUDY #1 FOR GLOBAL ENTREPRENEURSHIP
MGT-2248-330
PREPARED BY: ALEXANDRA SOKOLOVA
PREPARED FOR: DAWID NEWING
COMPANY NAME: “ALMAZJUVELIREXPORT”
WWW.ALMAZ.RU
COMPANY DESCRIPTION AND INFORMATION
“ALMAZJUVELIREXPORT” stands for –“Almaz”(rough diamond) -“juvelir”(jeweler), and “export” is evidently clear. Company profile info:
State-Owned Unitary Enterprise Foreign Trade Association v/o "Almazjuvelirexport".
25 block 1, Zubovsky Boulevard, Moscow 119021, Russia.
Tel.: (095) 245-3410, 245-3420.
Fax: (095) 956-6326.
Satellite com.: (7-502) 220-2018.
Telex: 411115.
Company was founded in 1970 in Moscow, and executes government’s assignments on export of precious stones and metals such as platinum group metals, emeralds,
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Russia is on the third place by polished diamonds cost and quality of polishing has been a leader for decades. Traditionally, significant jewelry manufacturing in recent years feels unprecedented growth, driven by consumer boom.
Russia's position is unique in the sense that all other countries are part of a single "diamond pipeline", and involved either in diamond mining, or diamond polishing, or in the production or the consumption of finished jewelry. Russia is not just characterized by commodity orientation; it has all the elements of the diamond pipeline, from the richest diamond reserves in the ground and to a multitude of existing and potential customers.
To sum up, in 2010 the Russian market is estimated as $ 3 billion on raw materials, $ 1.2 billion on diamonds and $3 billion on ready precious jewelry.
SITUATION ANALYSIS STREIGHTS | * VTB Bank and "Almazjuvelirexport" are connected by long history of cooperation, due to the mutual interest of the parties in comprehensive future development; strategic partnership agreement between bank and company took place. Implementation of the agreement requires the involvement of VTB as one of the main credit agencies for an integrated banking group and its subsidiaries. VTB is one of the major and most trustfully banks. * In 2011. Russia’s Gokhram foreign association has allocated to "Almazyuvelirexport" about 24 tons of metal
Commercial imports of precious gems such as; diamonds, pearls, jewelry, and precious and semi-precious gems valued at $2500 or more will require a formal entry to the United States. How did your diamond get to the United States?
In a lot of jewelry commercials, the main point is “he went to ‘name of store’” with the ring being a diamond one. A popular way of selling an engagement ring by telling the consumer where they should buy their engagement ring. The engagement ring, specifically ones with diamonds, is an interesting concept that is known as a widespread tradition. One compelling notion is that a person has to spend three months’ salary to buy one is also compelling. Some people would say that to be truly considered engaged you would need to have a diamond. They also believe that diamonds are forever. The concept is that diamonds are worth a lot more than other precious stone like emeralds and sapphires or semiprecious stone like ambers and pearls. The price of diamonds is very high, and it can be higher depending on the company and quality of cut. A lot people are worried that a lot of diamonds used for the rings may be blood diamonds, also known as war’s diamond, which are diamonds that have been mined during war, so some claims that their diamond came from another source such as a lab. The idea that diamonds are worth a lot of money is highly debatable because of how they are processed. Are diamonds even worth the cost?
Diamonds have become the ultimate symbol of luxury and money and are highly valued throughout the world today. However, in the spectrum of time diamonds have served a variety of other purposes. Diamonds were formed 3.3 billion years ago by extreme heat and pressure within the earth and are formed entirely out of carbon, making it the hardest natural surface known to man (debeers.com). Archaeologists believe that early humans actually used diamonds as spear heads and other tools. However, over time diamonds have become a luxury good, connected with much prestige. The high status of diamonds helped create the diamond rush that would forever alter the fate of South Africa.
On the Tiffany web site they clearly outline who they purchase their diamonds from, Laurelton Diamonds with known sources across the globe, primarily in Africa, Canada and Russia. They work to eliminate the flow of "conflict diamonds"—rough diamonds that are smuggled by rebel movements to finance wars against legitimate governments. Tiffany also does research on countries they purchase from to make sure they follow the guidelines of Kimberley Process Certification Scheme (KPCS). This is an international cooperative monitoring system created by governments, industry and civil society to eliminate the flow of "conflict diamonds. To comply with this process, rough diamonds may only move among participating countries in sealed containers with accompanying documentation evidencing that the diamonds are conflict-free (Tiffany, 2011).
For many people over generations the diamond has been a symbol of power, beauty, luxury, uniqueness, and everlasting pure love. For others the diamond has been a symbol of conflict, death, exploitation, misery, and blood shade. All the glamour and beauty attributed to diamonds might be blinding us to the impacts of its operations in Africa. In this paper we will go through a research journey to find out more about the positive and negative impacts of diamond mining in Africa and the diamond industry. Also, this research paper will highlight
Sierra Leone is one of the poorest nations on earth second to last on the United Nations human development index. The first mine was established in the town of Kimberley by two farmers; the De Beers Brothers. (BloodDiamondsDocumentary) The De Beers sold diamonds at least ten times per year in London’s open market and controlled at least 90% of the world’s diamond production bringing in billions of dollars per year. The average person brings in about $220 per year income yet the nation remains rich in natural resources. (BloodDiamondsDocumentary) Places like Botswana, South Africa, Canada, and Russia are the largest diamond producing nations in the world with more than 20 tons produced per year and a revenue that equates to about 60 billion dollars per year with half of the merchandise being sold right here in the United States.
The former Soviet Union was the 3rd largest diamond producer in the world and had traditionally sold most diamonds to DeBeers since the 1950s. Following the discovery of over 500 kimberlite pipes in the region, De Beers’ Central Selling Organization (CSO) struck a deal with Larose, the Russian central government’s joint-venture with the Sakha Republic. At the time, the region produced approximately 98% of the then-USSR’s diamonds (PR Bain Report: The Global Diamond Industry, 2011).
Average price of every piece sold was more than twice of US or Europe as size and quality of diamonds is greater.
This essay discusses the statement “the price of diamonds is too high”; it will analyze the diamond cartel and its history in order to determine the validity of this statement. Various microeconomic theories will be discussed and explained, all of which are involved in the diamond cartel. The Oxford Dictionary defines a cartel as “an association of manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition” [Oxford Dictionaries; unknown]. Therefore, the diamond cartel consists of a group of manufacturers/suppliers of diamonds who come together in order to restrict supply and as a result increase the price of diamonds. This essay will focus, mainly; on
Situation: DeBeers Consolidated Mines Limited (DBCM) occupies a major presence in the diamond industry. Discoveries of diamonds in the late 1800s were pioneered in South Africa, in which DeBeers held a heavy monopoly over. Since then, they have cultivated an impressive track record and leadership position. The Central Selling Organization (CSO) controls and regulates the flow and sale of rough diamonds, and was acquired by DeBeers in the 1930s. Due to a stable economy both locally and internationally, DBCM was the world’s largest producer and distributor of diamonds in late 1998. However, just before the turn of the century, globalization and developments in international
Literature: The US is still the sale growth engine of the global diamond jewelry market. The growth of retail sales was measured for 3% at constant exchange rates but 2% decline in terms of dollar terms. Dee Beers the major player have curtailed the production in 2015 and hoping for a new outlook to help the retailers and
De Beers Diamond Company is an industry that currently produces $13 billion worth of rough diamonds each year, leading to the employment of 10 million people globally from mining to retailing. 70% of rough diamonds are sold for industrial purposes with the remaining 30% “gem quality” being distributed to experts for cutting, polishing and jewelry manufacturing (Stein, 2001). The global jewelry market has increased three-fold in the last 25 years and is currently worth $72 billion each year. Jewelry diamonds
Every time in this industry the suppliers and the buyers stand high in their bargaining powers. Also the level of competition and rivalry is moderate to high as there is no differentiation. This industry remains attractive field as entry into the barriers is high and always the threat from the substitutes is high. If we compare this industry with the other industries then one can say that the growth is comparatively less. May be because not many options for variations are available as in color or metal types like diamond and gem metals. The same metal is used over a long period of time. But the monetary value will always be high. Personally speaking the emotional value of certain metals is high as
The process of producing the diamonds so they could be sold on the market involved many steps which were illustrated in the movie, Blood Diamond. Smugglers like Archer would supply the RUF with guns. The guns would be used by the RUF to intimidate the people of Sierra Leone into working as laborers for them, we see this with Solomon and his son. These men would be forced to dig in the water mines for hours a day searching for diamonds of all sizes. Then the diamonds are mixed with other diamonds all around the world, mixing the illegal ones with the legal ones; this was explained in the movie by Archer to Maggie. When the diamonds are mixed in with the others, no one can determine for certainty where each originated from. It is then distributed to nations where they are made into necklaces and bracelets, and no questions are asked.
Diamonds have been considered valuable since they were found. To understand the diamond industry we must first look at when they were discovered and where they are mined. Although, the first diamonds discovered were not mined but found in alluvial deposits along the banks of Orange River in India around 4000 BC. It’s interesting to think that in both India and Africa the first diamonds were found above ground and not through any