What contributed to the breakdown of De Beers' single-channel marketing system in the mid-1990s?

What contributed to the breakdown of De Beers' single-channel marketing system in the mid-1990s?

• A. Rise of major new producers outside South Africa
• B. De Beers monopolized all markets
• C. Global demand collapsed
• D. Advances in synthetic diamonds

Answer: (A)

Competition from new diamond producers outside South Africa began to erode De Beers' ability to control both supply and how diamonds were marketed. In the mid-1990s, major producers in places like Russia, Canada, and Australia expanded their output and began selling rough diamonds more independently, introducing substantial new supply into the market. This diminished De Beers' hold over the distribution through its centralized channel and made the single-channel system harder to sustain. The shift wasn't driven by a collapse in demand or by synthetic diamonds—those factors were not the main force behind the change.

Competition from new diamond producers outside South Africa began to erode De Beers' ability to control both supply and how diamonds were marketed. In the mid-1990s, major producers in places like Russia, Canada, and Australia expanded their output and began selling rough diamonds more independently, introducing substantial new supply into the market. This diminished De Beers' hold over the distribution through its centralized channel and made the single-channel system harder to sustain. The shift wasn't driven by a collapse in demand or by synthetic diamonds—those factors were not the main force behind the change.