Question

As a member of the De Beers Executive Committee (say from Anglo American or the Government of Botswana), would you vote to end the pilot program, to extend it for another year, or to convert it into a standalone business unit?

Answer 1

After reading this article, I would extend the program for another year. I believe Montgomery was correct in recommending extending the program for at least a year to gather additional information. He points outthat IIDV could succeed on all fronts by improving selling experience, generating attractive returns for retailers, and generating reasonable returns for them. In fact, the pilot program was being very successful. They discovered that retailers were happy with the program and consumers were pleased with the selling experience. Having additional research and resources, such as capital to buy more diamonds, would give the De Beers Committee an upper-hand in the market and exceed their current potential. In my opinion, this would be the right path for the business due to the many unknowns and potential risks that could arisedue to economic downturns. So far, the business is doing well, but it had been such a short time they really need to do their research and plan-ahead for future risks. A rising company could easily fail if they do not plan for what is to come. They need to have every aspect filled to the brim with detail and plan on how they will overcome adversity. Extending the pilot program would allow the De Beers Committee the time to answer these questions and gather the resources necessary to combat a possibly economic downturn.