David Yoffie’s lecture was the most interesting today. Talked about sustainability of an organization’s strategy. I found the subject of this blog the most interesting statement made during the lecture.
To create the effect of scarcity De Beers, the largest diamond producer in the world employs a strategy whereby it keeps a large, very large inventory of diamonds in their London vault. The value of this is somewhere between $5B and $8B. While this creates the ‘scarcity’ through supply control, it also serves the purpose of putting pressure on the competitors. The competitors are threatened by the risk of ‘flooding’ the market with a particular category of diamonds if required. It seems that not a single diamond has been taken out of the De Beers vault in years.
There was a distinguished speaker at HBS today – Bob McDonald, President & CEO of P&G. Some fascinating statistics about P&G – $80B in revenue and claims to have a reach of 4B people with an average spending of $12/year in 200 countries. Now don’t do the math because it does not add up to $80B of revenue! Their goal is to reach 5B consumers with an average spend of $14/year.
Bob is a very good speaker and an inspiring one I must say. What surprised me is the amount of ‘business books’ he reads – he mentioned several during the course of his presentation. One of the readers of this blog will be amused to learn that he referred to Steven Covey and his ‘seven habits’ 3 times during his presentation :). You know who you are and Bob’s mention does not change my view on Covey and his money making antics 🙂
One of the slides on his presentation focused on P&G’s social responsibility – Did not talk about a question in my mind – what kind of damage is Pampers causing to the environment? Diapers in landfills!
All in all a very good and refreshing presentation – his energy level was great! A very accomplished man.
Here is Bob presenting to a packed auditorium.