Argyle Diamonds: Where to Now?

Ў®Argyle Diamonds: where to now?ЎЇ

Central Selling Organistion (CSO) is responsible for the marketing of a high percentage of the worldЎЇs diamonds. It is a distribution channel for international diamonds trade and successfully in protecting the diamond industry and attracted an increasing number of entrants into the marketplace. In the early 1980s, when Argyle came on stream, it chose to sell its diamonds through CSO. Argyle has taken advantages of using the cartel. First of all, the agreement enabled Argyle to establish itself in the diamonds industry, promoting industry and investors confidence in the viability of the mine. Secondly, it also gave the company time to gain experience in sorting, valuing and marketing its diamonds. This experience gave Argyle the confidence to design and develop marketing systems that would take it forwards along the diamonds pipeline and establish the companyЎЇs competitive advantage in the market. However, the CSOЎЇs tight control over diamonds producers has restricted the independent marketing efforts of many produces, Argyle wanted to maintain a degree of independence in their marketing, which brought it into conflict with the CSO. In the same time, Argyle initiated sales direct to market. It developed its own distribution channel via Argyle Diamonds Sales in Antwerp because it believed that total reliance on a third party would limit its ability to maximise its profit.

Argyle Diamonds has created a global web of value creation activities with different stages of the value chain being dispersed to those locations around the globe where value added is maximised. It also realiesd the location economies which has two effects;

1) lower the cost of value creation, helping the company achieve a low-cost position, or

2) enable a company to differentiate