Richest man

Chapter 44 Africa: Nicky Oppenheimer (2)
Although the monopoly has brought huge profits, Oppenheimer and his De Beers have also been subject to various sanctions, because after all, this is a very unfair business competition.Of all the sanctions, the toughest are those of the United States. In 1994, De Beers planned to limit the price of industrial diamonds in the United States and was subject to anti-monopoly sanctions by the US government. Since then, De Beers has not been allowed to directly enter the US market, and even once the company’s top personnel enter the US, It will be arrested, which seriously affects the sales of De Beers diamonds in the world's largest consumer country - the United States.As a last resort, De Beers can only enter the US market indirectly through a third party.After Nicky took over De Beers, he opened up a better channel: through a joint venture with Louis Vuitton, Louis Vuitton will be the agent of De Beers's own brand of top-quality diamond jewelry sales, and this move does not Not subject to U.S. sanctions.However, the latest news shows that the United States will lift the sanctions against De Beers in the near future. This is not because De Beers has given up its monopoly strategy, but because through negotiations, De Beers admitted that it had made a monopoly mistake and made a mistake. Agreed to pay a fine of $1000 million to the United States.

Whether such a result will once again condone De Beers' monopoly is still unknown, but what happened to De Beers before makes people suspect that the trend of its monopoly will become increasingly serious. In February 2001, the largest reorganization in the diamond industry after World War II took place, when Anglo American and the Oppenheimer family jointly acquired De Beers, thus making De Beers a private company and ending its operations in the diamond industry. More than 2 years of trading history on the Johannesburg Stock Exchange.After the reorganization is completed, the Oppenheimer family and Anglo-American each hold a 100% stake in De Beers, and the remaining 45% is owned by the Botswana De Beers Diamond Company.Previously, De Beers and Anglo-American adopted a cross-share exchange business model.After the reorganization, the two companies were basically merged into one. Anglo-American Company replaced De Beers as the world's largest diamond mining company, and De Beers no longer engaged in business in its own capacity, but the newly formed DTC Diamond Trading Co., Ltd. The company implements uniformly.

The focus of people's attention on this incident is actually the monopoly, because the core content of the whole incident is that the Oppenheimer family spent about 176 billion US dollars to take back the De Beers Group from shareholders and investment groups, thus turning it into a became a private company, what does this mean for the diamond industry, which has long been suffering from monopoly
"Diamonds are forever, and one is always passed on"

Although De Beers' monopoly strategy has always been condemned by people, in fact, it has developed from a small mining company to a global diamond monopoly. It also relies on the unique business strategy and adaptability of the Oppenheimer family.

Advertising is an important part of it.De Beers is one of the first multinational companies to cooperate with professional advertising agencies. As early as 1951, JWT Chicago Company began to shape the image of De Beers. A classic created at the time.

When De Beers gradually became the largest diamond mining company in Africa, it was generally believed that only in the African continent would diamonds be produced, so De Beers was also a well-deserved monopoly at that time.But after 1980, a large number of diamond mines were continuously discovered in Australia and Russia, and the status of the South African diamond kingdom was gradually shaken; connected with this, the monopoly position of De Beers also appeared in crisis.Under such circumstances, Henry, who was the president of De Beers at the time, decisively decided to break through the noble barriers of diamonds in the original sales concept, and began to advertise in the media, so that diamonds finally entered the families of the middle class.This move not only expanded the popularity of De Beers and increased the sales volume of diamonds, but also consolidated De Beers' monopoly position in the diamond industry.This cross-level publicity method of De Beers was also used by Intel Corporation later. In the 20s when Intel was just starting up, it advertised computers for the first time, because both Intel and De Beers were well aware of the expansion of the entire industry. Undoubtedly, it will greatly increase the sales volume of your company.

Compared with Henry, Nicky's contribution to De Beers has more long-term significance.

Under Nicky's leadership, De Beers ventured into diamond retailing by partnering with French luxury goods house Louis Vuitton.This move has extended De Beers' industrial chain and brought more profits to De Beers.At the same time, the famous slogan "Diamonds are forever, one piece will last forever", which is the essence of De Beers' corporate culture, has also been translated into various languages ​​and has become a classic saying that people often talk about.

What is even more commendable is De Beers' grasp of the entire diamond market.Although in a monopoly position, De Beers has been committed to expanding the capacity of the diamond market.It is also one of the few upstream companies in the world that promotes terminal sales for free. "Our goal is very clear, that is, to promote consumers' demand for diamond accessories. Through more effective cooperation within the industry, we can jointly pursue a successful future for the development of the diamond industry, thereby creating huge business opportunities for the entire diamond industry." This is a De Beers executives' description of the core of the company's marketing strategy.To this end, the DTC Diamond Promotion Center under De Beers will continue to spend [-] million US dollars per year on diamond advertising, public relations, and promotion of international and local brands around the world, so as to help jewelers formulate effective Marketing strategies to increase diamond jewelry sales and increase profits.

Undoubtedly, such a strategy is also an effective measure to continuously consolidate De Beers' global diamond dominance. These unique industry characteristics are also worth learning for companies in other industries.

A story that has nothing to do with wealth: It's all about diamonds
The theme of one of De Beers' well-known advertising series these days is "It's All About Diamonds."The romantic advert follows a young woman trying on a diamond necklace in a diamond shop, only to find the diamond's brilliance attracting passing men.The man was completely attracted by the light, and walked along the light involuntarily, but bumped into the transparent glass of the diamond store (there was still glass).The artistic conception of this series of advertisements is very beautiful, and the creativity is also very unique. The implication is: diamonds confuse people and make people forget everything. It is not his fault that the man hit the glass, but the fault of the diamond.

What the advertisement conveys is the most beautiful side of diamonds, but in fact, "the disaster caused by diamonds" is not limited to these, and is often even connected with blood and disaster.

On Earth, the ancient continent of Africa is the main source of diamonds.Natural diamonds originate in the ground more than 200 kilometers deep, and their formation age is usually 24 billion to 32 billion years ago, and some are 250 million years ago.But no matter how old it is, diamonds are extremely rare.According to the Antwerp Diamond Higher Council in Belgium, it takes 315 tons of rock, sand and gravel to process a [-]-carat diamond, which can be worth as much as $[-] per carat.Also for this reason, expensive and rare diamonds attract countless people crazy with their huge profits, and often become the object of people's competition regardless of means.

In November 2000, De Beers held a grand diamond exhibition at Millennium Square in London, England.Not long after the exhibition began, bandits began to plan for exhibits.The thieves used an excavator to break down the gate of the exhibition center at night, but the tight security measures at the scene finally made them fall short.The leader of De Beers commented on the theft and said: "This theft is like a public farce. If these greedy people make trouble like this every six months, then our company can almost save a lot of publicity. fee."

What De Beers said is right, they have almost monopolized the world's diamond industry, and they have become household names, and they don't even need advertisements to become famous.But in addition to the preciousness and brilliance of diamonds, the reason why De Beers has become the center of people's attention is that diamonds have brought great disasters to the African continent-although diamonds are a symbol of wealth, they bring endless benefits to the place of origin. war, blood and tears.

In the "Diamond Coast" of South Africa, black laborers have to work more than ten hours a day in the dark diamond mines, and at work, they must wear baggy clothes without pockets, and even have their mouths sealed, and there are tall guards standing beside them at any time. Watched, supposedly to prevent theft.In such harsh conditions, a black laborer earns as little as a dollar a day—almost a few percent of the price of a finished diamond, and most of the profits go to diamond miners like De Beers. fanny pack.

But for most Africans, such a life of income is considered lucky, because now on this diamond-rich continent, there are endless wars caused by diamonds everywhere.In South Africa, besides AIDS and poverty, social unrest caused by diamonds is the third biggest problem it faces.Looking at the map of Africa, Sierra Leone, Angola, Congo, Rwanda, Zambia, Zimbabwe, Namibia, Burundi... As long as there are diamond deposits, there have been or are wars taking place. Frequent wars have turned the entire southern Africa into a big one. battlefield.

Unlike wars in other parts of the world, the wars here are neither ideological nor ethnic or geographical, but rooted entirely in rival international jewelers competing for diamond deposits.

What's more frightening is that people still can't seem to see where this war will end, because Africa is caught in a terrible vicious circle: in order to compete for scarce diamond deposits, people and people, governments and anti-government There will be fierce conflicts between forces, and those who occupy the mines will use the income from smuggling diamonds to buy more weapons, and then invest in new and bigger wars. This cycle repeats forever.If anyone benefited from the war, it was diamond merchants like De Beers, which provided them with a steady stream of cheap diamonds that made them even more profitable.

Because of this, diamond giants like De Beers have been criticized in the process of development, and Oppenheimer often encounters various lawsuits, and some even propose astronomical huge compensation.However, these scourges caused by diamonds did not cause much trouble for Oppenheimer himself, because he was just a businessman.Instead, he had to worry about what he would do if no more diamonds came to bring him trouble.Because as a mineral deposit, diamonds will eventually be mined. At that time, what will Oppenheimer and his De Beers, Anglo-American do for a living? We just play by the rules and strive to do our best.

(End of this chapter)