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Set in September 2018, the case describes De Beers’ attempt to halt the escalating disruption to its core business posed by diamonds grown in laboratories. Since its inception over a century ago, De Beers had created and nurtured the perception of diamonds as rare objects and exclusive symbols of love. But lab-grown diamond makers now had the capabilities to mass-produce and sell at a discount diamonds with the same optical, chemical and physical characteristics as natural ones, possibly jeopardising the entire mined-diamond industry. To counter the threat, De Beers introduced its own lab-grown diamond jewellery brand, called Lightbox. Lightbox diamonds were positioned as cheerful fashion items and sold directly to consumers at a substantial discount to generic lab-grown diamonds. Over its history, De Beers had had a remarkable track record of dwarfing competition. Would it succeed this time?
- Understand the factors that set luxury products apart from commodities.
- Disambiguate the notions of disruption and disruptive innovation and learn how to operationalise reverse disruption
- Understand the concept of ‘extendable core’ to gauge a disrupter’s strength.
- Explore the range of responses that incumbents can use to counter disruption.
- Learn how to quantify the efficiency and profitability of a company’s capital investments
|Publication Date:||October 2023|
|LBS Case Code:||CS-19-005|
|Subjects:||adaptation, Business strategy, Corporate strategy, Disruption, Disruptive innovation, extendable core, quantifying profitability of capital investments, reverse disruption, ROCE, Strategy|