system thinking task

1. SSM Case Study
Prepared by: Hari Suciadi [1806153290]
DeBeers’s Diamond Dilemma

2. Content
Understanding the Situation
01
Rich Picture
02
Root Definition
03
Gap Analysis
04
Summary
05

3. Understanding The Situation
DeBeers is the largest diamond mining and trading
company in the world. At one time it controlled 45% of the
world’s production and sold over 80% of all diamonds. It used
monopolistic practices and using their massive size and
control of the market, financially punished smaller miners and
retailers who tried break away from the DeBeers “
DeBeers purchased over 80% of all mined diamonds, controlled
most of the diamond cutting and polishing industry and was able
to artificially control the supply and prices of diamonds.
However over the years due to Government regulation, the
advent of synthetic diamonds and other reasons, monopoly of
DeBeers is under threat. DeBeers should responds to the
multiple threats it faces.

4. Understanding The Situation
5W + 1H Remarks
What
DeBeers as the largest diamond mining and trading company controlled 45% of the world’s production and sold
over 80% of all diamonds, is under threat by advent of synthetic diamond, and need to responds to protect the
future of natural diamond market.
Who DeBeers Diamond
Where Southern African countries, and other diamond mining country (Namibia, Canada, Rusia, etc)
When End of 1990
Why
The advent of synthetic diamonds and other reasons, monopoly of DeBeers is under threat. Due to all of this the
diamond industry in under disruption.
How
• Increase marketing and become more customer focused in order to find a niche for itself in the market
• Create branding mark to differentiate between natural and synthetic diamond then increase value of it’s luxury
brand
• Educate consumers to get knowledge of a natural process of a diamond and give them the meaning of it’s
process.

5. Rich Picture

6. Root Definition 1
Root Definition
DeBeers Diamond Managing Director need to protect natural diamond market from
the threat of advent synthetic diamond by actively campaign on Gem defensive
program while sales of synthetic diamond is increase 15%/year.
Threat from
Synthetic
Diamond
1. Increase research
of natural diamond
5. Consumer
education
Monitor
Control
2. Differentiate
Natural and
Synthetic diamond
4. Discover new
natural diamond
Description
C Diamond end customer
A DeBeers Diamond Managing Director
T
Protect natural diamond market from the
threat of advent of synthetic diamond
W Active on Gem defensive program
O
DeBeers Diamond Chairman (Nicky
Oppenheimer)
E
Synthetic diamond with low cost and eco-
friendly, while sales trend of synthetic
diamond increase around 15% per year
6. Collaborate
with diamond
mining and
producer
3. Campaign
uniqueness of
natural diamond

7. Gap Analysis
Activity Exist? How?
Measurement
Criteria
Good/Bad Improvement
Component – DeBeers Diamond Managing Director
1. Increase research of natural
diamond
Yes Proactive on research activity Research activity Good
Increase research for reduce cost for mining
natural diamond
2. Differentiate Natural and
Synthetic diamond
Yes
Spent $17 M for on research for
differentiate natural and synthetic
diamond
Willingness to spend
resources
Good
Create visual branding mark to differentiate
between natural and synthetic diamond then
increase value of it’s brand
3. Campaign uniqueness of
natural diamond
Yes
Proactive lasering word’s “lab
diamond” for synthetic diamond.
Proactive diamond advertisement
campaign “ Synthetic & Diamond
are very different product”
n.a -
Separate retailer between natural and
synthetic product, placing natural diamond on
place that is more unique and luxurious
4. Consumer education Yes
Focused on how the industry
provide mining communities with
access for employment
opportunities
n.A -
Educate consumers to get knowledge of a
natural process of a diamond and give them
the meaning of it’s process.
Advertise every humanitarian effort on mining
communities
5. Discover new natural diamond Yes
Searching out new supplies of
natural diamonds
Number of new diamond Good
Continue to find unique diamond, but DeBeers
also should thinking to sell synthetic diamond
6. Collaborate with diamond
mining and producer
Yes
Marketing agreement with
producers in Canada, Botswana,
India, etc.
Number of collaboration
country
Good
Not only collaborate with producers, but also
with cutting and polishing industry for create
unique design.

8. Gap Analysis
Activity
Connection
Exist? How?
Measurement
Criteria
Good/bad Improvement
Component – Company
1-2 Yes
Increase research of natural diamond to
differentiate natural and synthetic diamond
Research finding Good
Increase research not only to differentiate
natural diamond but to reduce cost of
produce natural diamond and for
environment issue
1-4 Yes
Increase research of natural diamond to
find new type of natural diamonds
New type of diamond
found
Good
Find the most unique of natural diamond
that cannot imitiate in labs
2-3 Yes
Differentiate natural and synthetic
diamond to campaign uniqueness of
natural diamond
n.a -
Not only campaign about differentiate of
natural diamond, but also regarding the
value natural diamond for mining
community
3-5 Yes
Give consumer education to understand
unique of natural diamonds
n.a -
Educate consumers to get knowledge of a
natural process of a diamond and why it
can be unique
4-5 No
Give consumer education to promote new
type of natural diamond
n.a -
Educate consumers to get knowledge of
each type of natural diamond and why it
can be valuable
4-6 Yes
Collaborate with diamond producer to
increase number of finding new diamond
Number of
collaboration country
Good
Collaborate with new country that
possibility have diamond mine

9. Root Definition 2
Root Definition
DeBeers Diamond need to rise from failure that occure in late 1990 by change to
new direction (demand driven strategy) while DeBeers market is fallen, increase
stockpile, decrease share, violation of antitrust, terminated sightholder.
1. Demand
driven
strategy
5. Supplier of
choice
program
Monitor
Control
2. Ended
stockpiling
4. Only selling
from own
operation
Description
C Diamond end customer
A DeBeers Diamond Company
T
Rise from failure that occurred in the late
1990
W
Change to new direction to get more profit by
demand driven strategy
O
DeBeers Diamond Chairman (Nicky
Oppenheimer)
E
DeBeers market is fallen, increase stockpile,
decrease share, violation of antitrust,
terminated sightholder
7. Create
new
branding
3. Stop
buying on
open market
6. Marketing
and retail
strategy
8. Join venture with
retail and collab’
with new country

10. Gap Analysis
Activity Exist? How?
Measurement
Criteria
Good/Bad Improvement
Component – DeBeers Diamond Company
1. Demand driven strategy Yes
Ending stockpiling diamond,
produce based on demand
Profit Good
Increase marketing and become more
customer focused
2. Ended stockpiling Yes
Decreasing stockpile by not to buy
every diamond, sell more valuable
and better price
Stockpile amount Good
Not to purchase on higher price than selling
price.
3. Stop buying on open market Yes
Build new relationship with
suppliers
n.a -
Avoid to purchase from conflict country.
Become pro-active in making sure that the
profits from diamond mining are shared more
equitably with the people of the country
5. Only selling from own
operation
Yes
By selling from own operation
DeBeers enable to guarantee that
supply is conflict free.
n.a -
Increase branding of product from own
operation
4. Supplier of choice program Yes
Make DeBeers the supplier choice
in the eye of customer
Business relationship Good Increase relation with customer
6. Marketing and retail strategy Yes
Develop marketing and retail
strategy as branded luxury item.
Boston-based diamond wholesale
Strategy execution Good Integrated mining-cutting-polishing- store
7. Create new branding Yes
Create tiny logo “DeBeers’s
Forever” Mark.
Heart on fire brand
Non-wedding advertisement
“Celebrate Her”
Branding approved by
sightholder
Good
Adjust the brand of a diamond to mean more
than just love between a man and woman.
8. Join venture with retail and
collab’ with new country
Yes Join venture with retail stores LVMH
Number of retail in
various country
Good Expand join venture in develop country

11. Gap Analysis
Activity
Connection
Exist? How?
Measurement
Criteria
Good/bad Improvement
Component – Company
1-2 Yes Demand driven by ended stockpiling Stockpile amount Good
Monitor and control stockpile amount
Integrated supply (minning-store) based
on demand
2-3 Yes
Reduce stockpile by stop purchase on
open market
n.a - Avoid to purchase from conflict country.
3-4 Yes
Stop purchase open market and sell only
from own operation
n.a -
Avoid to purchase from conflict country.
Become pro-active in making sure that the
profits from diamond mining are shared
more equitably with the people of the
country
4-5 Yes
Selling new branded diamond by promote
in supplier choice program
Business relationship
with customer
Good
Increase branding of product from own
operation and increase customer relation
5-6 No - n.a - -
6-7 Yes
Marketing and retail strategy by share new
strong branding “heart of fire”, “DeBeers
Forever mark
Strategy execution Good
Adjust the brand of a diamond to mean
more than just love between a man and
woman.
7-8 Yes
Using joint venture of retailer it can
increase product branding
Branding approved by
retailer
Good
Branding campaign in all retailer and
country that have collaboration

12. Summary of Improvement
In other hand, DeBeers must start thinking about getting into the
synthetic diamond business in the jewelry line too, since a lot of
people are getting more eco conscious and diamond mining is
extremely destructive to natural habitats. .
• Create visual branding mark to differentiate between natural and
synthetic diamond then increase value of it’s luxury brand
• Educate consumers to get knowledge of a natural process of a
diamond and give them the meaning of it’s process.
• Advertise every humanitarian effort on mining communities
DeBeers Dilemma: Natural VS Synthetic
DeBeers Diamond rise from failure on 1990
• Avoid to purchase from conflict country.
• Become pro-active in making sure that the profits from diamond
mining are shared more equitably with the people of the country
• Increase branding of product from own operation
• Adjust the brand of a diamond to mean more than just love
between a man and woman.
Increase marketing and become more customer focused in order to
find a niche for itself in the market

13. Thank You