Lev Leviev vs De Beers
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Case Details:
Case Code : ECOA125
Case Length : 13 Pages
Period : 2004
Organization : De beers, Lev Leviev
Pub Date : 2004
Teaching Note :Not Available
Countries : South Africa, Global
Industry : Diamond
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
About De Beers
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For most of the 20th century, De Beers sold 85% to 90% of the diamonds mined worldwide. With this monopoly, it could artificially keep diamond prices stable by matching its supply to world demand.
The De Beers legacy was more than 100 years old. In 1888, Cecil Rhodes successfully consolidated South Africa's diamond mines, laying the foundation for De Beers. He formed a cartel with the ten largest merchants. Each was guaranteed a certain percentage of the diamonds
coming out of De Beers' mines. In return, they provided Rhodes with market data, enabling him to ensure a steady, controlled supply...
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About Leviev
Leviev, De Beers' challenger had grown up in the Uzbek capital of Tashkent. Despite the prevailing communist rule, his family was committed to Jewish religion and values. Leviev's father was a successful textile merchant and a collector of rare Persian carpets. The family immigrated to Israel in 1971, having converted their wealth into rough diamonds worth $1 million...
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Russia
Leviev's friendship with Putin dated back to 1992, when the president, then a deputy mayor in St. Petersburg, authorized the opening of the first new Jewish school in the city (financed by Leviev) in half a century after the mayor hesitated to do it.
Leviev had nurtured the relationship with Putin, brokering meetings for the first time between the new Russian president and prominent Israeli politicians. But he avoided being identified with the "Family," a group of business tycoons who tried to convert their economic influence into political power... |
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