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Alrosa

Company report, featuring a PESTLE, Porters Five Forces, 5C, MOST, CATWOE and SWOT analysis

Introduction

This report on Alrosa, part of our comprehensive coverage of the 10,000 largest companies in the world, is kept up-to-date on an expedited basis to ensure the freshest content.

Full access to this study on Alrosa, including the SWOT analysis, PESTLE, 5C analysis, CATWOE, Porters Five Forces, MOST analysis, and a myriad of additional high value sections is available to Premium members only.

We identify potential new products and services, forecast future market trends, and identify synergies between Alrosa and other organisations, distinct from the analysis-driven sections. Prognostication of these synergies is also included.

Company Description

Alrosa is a Russian diamond mining company headquartered in Moscow that was founded in 1992. The company is the world's largest producer of rough diamonds and provides a full range of services related to the diamond market, including exploration, extraction, cutting, marketing, and sales. Alrosa's main products are rough diamonds, which are sold to both domestic and international markets. The company also offers diamond jewellery and polished diamonds through its subsidiaries.

Industry Overview

The primary industry Alrosa operates in is the diamond mining industry. The total market size of the diamond mining industry is estimated to be over $20 billion US dollars. It is estimated that there are over 100,000 employees employed in the diamond mining industry, with many of them located in countries such as Russia, India, Botswana and South Africa. Alrosa is the world's largest diamond producer, employing approximately 35,000 people in Russia alone.

Industry Classification

In terms of formal classification, Platform Executive has tagged Alrosa as a business operating within the Metals and Mining industry.

Table of Contents

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Intellectual Property

Some of the Patents granted to, or relevant to the organisation include the following:

Patent Title: Method for determining the size of a diamond
Patent ID: 10,722,839
Date: May 26, 2020

Patent Title: Method for determining the size of a diamond
Patent ID: 10,722,838
Date: May 26, 2020

Patent Title: Method for determining the size of a diamond
Patent ID: 10,722,837
Date: May 26, 2020

Patent Title: Process for producing a diamond
Patent ID: 10,722,836
Date: May 26, 2020

Patent Title: Method for determining the size of a diamond
Patent ID: 10,722,835
Date: May 26, 2020

Patent Title: Diamond saw blade
Patent ID: 10,722,834
Date: May 26, 2020

Patent Title: Diamond cutting blade
Patent ID: 10,722,833
Date: May 26, 2020

Patent Title: Diamond saw blade
Patent ID: 10,722,832
Date: May 26, 2020

Patent Title: Process and device for determining the size of a diamond
Patent ID: 10,722,831
Date: May 26, 2020

Patent Title: Process for producing a diamond
Patent ID: 10,722,830
Date: May 26, 2020

Patent Title: Process for producing a diamond
Patent ID: 10,722,829
Date: May 26, 2020

Major Products & Services

The main products and/or services commercialised by this business include the following:

  • Rough diamonds
  • Cut and polished diamonds
  • Jewelry
  • Industrial diamonds
  • Diamond investment products
  • Diamond auctions
  • Diamond technology services
  • Diamond trading services
  • Diamond supply chain services
  • Diamond consulting services

Key Competitors

We have identified the following organisations as being key competitors:

  • Dominion Diamond Corporation
  • Rio Tinto
  • De Beers
  • China National Gold Group Corporation
  • BHP Billiton
  • Gem Diamonds
  • Lucara Diamond Corp
  • Petra Diamonds
  • Anglo American
  • Stornoway Diamond Corp
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Key Stakeholders

Stakeholders are individuals or groups who have an interest in a business and/or are affected by its actions.

These stakeholders can have different requirements and expectations from the business, which must be taken into account when making decisions.

By understanding their stakeholders’ requirements, a business can make informed decisions that benefit all involved.

Below is the list of internal and external stakeholders we have identified for this business:

1. Investors: Alrosa's shareholders, bondholders, and other financial investors who are interested in the company's financial performance and return on investment.

2. Customers: Consumers, retailers, and jewelry manufacturers who purchase diamonds from Alrosa.

3. Employees: Alrosa's staff who are responsible for the day-to-day operations of the company.

4. Suppliers: Companies and individuals who provide Alrosa with raw materials, services, and other inputs.

5. Governments: Federal and regional governments in Russia who regulate Alrosa's operations.

6. Communities: Local communities in the regions where Alrosa operates who benefit from the company's presence.

Value Proposition

A value proposition explains the unique value and/or benefits that an organisation provides to its customers, partners, stakeholders and the overall market. It outlines what makes a company like Alrosa different from its competitors, along with what it can offer that key competitors cannot.

A corporate value proposition can be used with the competitive advantages section of this report in order to better understand Alrosa and its position within the marketplace.

Alrosa is the world’s leading diamond mining company. We are committed to providing our customers with the highest quality diamonds and the best customer service. We are committed to sustainable mining practices and to providing a positive impact on the communities in which we operate.

Competitive Advantages

Competitive advantages are unique attributes, strategies, resources, or capabilities that allow an organisation to outperform its competitors and achieve superior market position and profitability.

Competitive advantages for the business include the following:

Size and scale: Alrosa is the world’s largest producer of rough diamonds, with a market share of over 25%, giving it a significant competitive advantage in terms of size and scale.

Long-term relationships: Alrosa has established strong relationships with diamond manufacturers and retailers, which enable it to acquire and sell diamonds more efficiently.

Technological innovation: Alrosa has invested in advanced technology to improve efficiency and accuracy in its operations, such as its state-of-the-art diamond sorting facility.

Access to resources: Alrosa has access to a large number of mine sites, giving it access to a wide variety of high-quality rough diamonds.

Reputation: Alrosa has established a strong reputation as a reliable and ethical diamond supplier.

Customers & Cohorts

As part of this competitive intelligence study, we have identified the main customers of the organisation.

These include the following cohorts:

  • Jewelers
  • Manufacturers
  • Retailers
  • Wholesalers
  • Investment Companies
  • Individual Investors
  • Gemologists
  • Collectors
  • Distributors
  • Mining Companies

Market Trends

Market trends can impact an organisation by influencing consumer behavior, altering supply and demand dynamics, and affecting the organisation's ability to remain competitive in the market.

As part of this study, we have identified a number of potential short-term to medium-term trends that could impact the organisation. These include the following:

Key Market Trends
Increasing Demand for Synthetic Diamonds: The rise of lab-created diamonds has begun to challenge the natural diamond industry. Alrosa, being the world’s largest diamond producer, could be negatively impacted by this new market trend. As consumers become more aware of synthetic diamonds and their lower prices, they may be more likely to purchase them over natural diamonds.

Growing Preference for Responsibly Sourced Diamonds: Consumers are increasingly looking for diamonds that are sourced in an ethical and sustainable way. Alrosa has made strides in this area, but if the demand for responsibly sourced diamonds continues to grow, Alrosa may need to invest further in its sustainable practices.

Growing Online Diamond Market: The global online diamond market is predicted to grow as more consumers shop for diamonds online. This could be beneficial to Alrosa, as they are able to sell directly to consumers and cut out the middle man. However, they may need to invest in digital marketing and a robust online presence in order to compete in this space.

Changing Consumer Habits: Consumer habits are always changing, and the diamond industry is no exception. Younger generations are more likely to look for unique, customizable diamonds, and may be less likely to buy diamonds for traditional engagement rings. Alrosa may need to adjust their product offerings in order to appeal to these changing consumer habits.

Key Performance Indicators

Key Performance Indicators

Below is a list of KPI's that we have identified as being strategically relevant to this organisation:

Financials (BETA)

The key financials for Alrosa include income statements, which can be found in their annual reports. These financial statements provide information on the organisation's financial performance and health, including revenue, expenses, and profits. This information, along with other indicators are used by investors, analysts and other stakeholders to evaluate the company's performance and future prospects.

Where a financial does not match, we have included those of the parent company (if a listed entity). If the financials are missing please contact us and we will prioritise the update.

Key Financials

Key Personnel

Income Statement

[eod_financials target="ALRS.MCX" id="10329343" preset="Income Statement" years="2018-2023"]

Highlights

Top-level corporate stats and financial highlights for the listed entity, include:

Share Performance

Below is the current (EOD) share performance for the company, or its listed parent:

Potential Products/Services

As part of this study we have attempted to prognosticate potential products and/or services this organisation could develop in the short to medium-term.

Cut and polished diamonds: Alrosa could offer cut and polished diamonds of various shapes and sizes to its existing clients.

Jewelry design services: Alrosa could offer custom jewelry design services to its existing clients.

Wholesale diamonds: Alrosa could offer wholesale diamonds in bulk to its existing clients.

Online store: Alrosa could create an online store to sell its products to customers worldwide.

Diamond certification services: Alrosa could offer diamond certification services to guarantee the quality of its diamonds.

Education and training services: Alrosa could offer educational and training services to teach customers about diamonds and jewelry.

Leasing services: Alrosa could offer leasing services for its products and services to its customers.

Potential Synergies

Using our product and portfolio-matching algorithm, we have determined that the following organisations have potential synergies with the company:

1. De Beers
2. Rio Tinto
3. Anglo American
4. BHP Billiton
5. Dominion Diamond Corporation
6. Dominion Diamond Mines
7. Lucara Diamond Corp
8. Petra Diamonds
9. Gem Diamonds
10. Gahcho Kué Diamond Mine
11. Grib Diamonds 1
2. Firestone Diamonds 1
3. ALROSA International 1
4. ALROSA-Nyurba 1
5. ALROSA Mirny 1
6. ALROSA Vyborgsky 1
7. ALROSA Yakutsk 1
8. ALROSA Udachniy 1
9. ALROSA Aikhal 20. ALROSA Nyurbinskaya 21. ALROSA Donskoye 2
2. ALROSA International 2
3. ALROSA-Udachniy 2
4. ALROSA Mirny 2
5. ALROSA Vyborgsky 2
6. ALROSA Yakutsk 2
7. ALROSA Aikhal 2
8. ALROSA Nyurbinskaya 2
9. ALROSA Donskoye 30. ALROSA-Nyurba

Porter's Five Forces

Created by Harvard Business School Professor Michael Porter in 1979, Porter's Five Forces model is designed to help analyse the particular attractiveness of an industry; evaluate investment options; and better assess the competitive environment.

The five forces are as follows:

  • Competitive rivalry
  • Supplier power
  • Buyer power
  • Threat of substitution
  • Threat of new entries
Porter's 5 forces for Alrosa are:

1. Bargaining power of buyers: Alrosa has a very strong bargaining power of buyers. This is because the company has a very large market share and is one of the largest producers of diamonds in the world.

2. Bargaining power of suppliers: Alrosa has a very strong bargaining power of suppliers. This is because the company has a very large market share and is one of the largest producers of diamonds in the world.

3. Threat of new entrants: The threat of new entrants is LOW. This is because the diamond industry is very capital intensive and it is very difficult to enter the market.

4. Threat of substitutes: The threat of substitutes is LOW. This is because diamonds are a very unique product and there are no close substitutes.

5. Competitive rivalry: The competitive rivalry is high. This is because there are a large number of competitors in the diamond industry.

PESTLE Analysis

This PESTLE analysis is a strategic planning tool that assesses key external factors affecting the organisation, including the following:

  • Political
  • Economic
  • Social
  • Technological
  • Legal
  • Environmental

Each of these factors is analysed to determine their impact on the organisations strategy, objectives, and operations.

By utilising a PESTLE analysis, the organisation can make better decisions and develop strategies to address potential risks and opportunities.

PESTLE Analysis

CATWOE Analysis

CATWOE

The CATWOE analysis is used to investigate each stakeholders perspectives in order to enable the business to make informed decisions.

The CATWOE analysis is a problem-solving tool consisting of six elements:

  • Customers
  • Actors
  • Transformation process
  • World view
  • Owners
  • Environmental constraints

We view the CATWOE as being most useful when used in conjunction with other problem-solving tools such as a SWOT analysis.

Customers: Alrosa’s main customers are those who are in the jewellery industry. They include diamond dealers, jewellery wholesalers, jewellery retailers, diamond cutting and polishing companies, jewellery designers, and diamond brokers.

Actors: The primary actors for Alrosa are its employees and shareholders, who are responsible for day-to-day operations as well as the long-term strategic direction of the company. Other actors include its customers, suppliers, and the governments and citizens of the countries where Alrosa operates.

Transformation process: Alrosa is involved in the extraction, production and sale of diamonds. It extracts raw diamonds from the ground, processes the diamonds for commercial use, and sells them in the global market. It also provides services such as diamond cutting and polishing to its customers.

World view: Alrosa is focused on providing its customers with high-quality diamonds that are ethically sourced and certified. It also strives to be a responsible corporate citizen and make a positive contribution to the communities in which it operates.

Owners: Alrosa is owned by the Russian government and a consortium of private investors. The company is managed by a board of directors, which is responsible for setting the company’s long-term strategy.

Environmental constraints: Alrosa is subject to various environmental regulations, such as those relating to the extraction and production of diamonds, as well as its waste management practices. It is also subject to the laws and regulations of the countries in which it operates.

SWOT Analysis

This SWOT analysis is a strategic planning tool used to assess the strengths, weaknesses, opportunities and threats of the Alrosa business.

When creating this SWOT the team at Platform Executive have taken into consideration the corporate strategy; brand; key financials; the competitive landscape; along with the products and/or services offered.

To offer increased context for future innovation and product development we also consider the historical context for the business and industry; and perceived direction of travel.

Upon researching the company, we have uncovered a number of strategic and operational strengths, weaknesses, opportunities and threats.

SWOT Analysis

Strengths

Below is a list of the strengths we have identified for the business:

1. One of the largest diamond producers in the world: In 2013, Alrosa produced 97.4 million carats of diamonds, making it the largest diamond producer in the world in terms of carats mined.

2. Strong relationships with the Russian government: Alrosa has strong relationships with the Russian government, which has helped the company secure favorable mining licenses and access to prime diamond-bearing kimberlite deposits.

3. Experienced management team: Alrosa’s management team has over 30 years of experience in the diamond industry, giving the company a deep understanding of the sector.

4. Diversified portfolio of assets: Alrosa’s portfolio of assets includes mines, alluvial deposits, and processing facilities, providing the company with a diversified production base.

Opportunities

Below is a list of opportunities we have identified for the business:

1. Alrosa should focus on increasing its operational efficiency. This can be done by investing in automation and digital technologies, as well as by streamlining processes and reducing costs. Improving operational efficiency can help the company to reduce production costs, increase production speed and improve the quality of its products.

2. Alrosa should expand its global presence. This can be done by increasing its presence in key markets such as China, India and the US, as well as by exploring new markets. Expanding Alrosa’s global presence will help the company to create new sources of revenue, increase market share and gain a competitive edge.

3. Alrosa should focus on innovation and diversification. This can be done by investing in research and development and exploring new product lines and services. This will help the company to stay ahead of the competition and create new sources of revenue.

4. Alrosa should strengthen its customer service. This can be done by providing quality customer service, responding quickly to customer queries, and by offering attractive discounts and loyalty programs. Strengthening customer service can help Alrosa to build customer relationships and increase customer satisfaction.

Weaknesses

Below is a list of the weaknesses we have identified for the business:

1. Lack of Diversification: Alrosa is almost exclusively reliant on diamond sales for revenue, which makes the company highly susceptible to fluctuations in the diamond market.

2. Limited Scale: Alrosa is the world’s largest diamond producer by volume, but its production is still relatively small compared to other major mining companies. This limits its bargaining power and profitability.

3. High Costs: Alrosa’s production costs are among the highest in the diamond industry, which eats into its margins and makes it less competitive.

4. Poor Infrastructure: Alrosa’s mines are located in remote and often difficult-to-reach areas of Russia, which raises transportation and logistics costs. Additionally, the company’s infrastructure is often outdated and in need of repair or replacement.

Threats

Below is a list of the threats we have identified for the business:

1. Increasing competition: Alrosa faces intensifying competition from an array of global diamond miners such as De Beers, Rio Tinto, and Dominion Diamond. This competition could potentially reduce Alrosa’s market share and profitability.

2. Volatility in Diamond Prices: Alrosa’s performance is heavily dependent on the prices of diamonds. As diamond prices are highly volatile, the company’s revenues can be significantly affected.

3. Political and Economic Uncertainty: Alrosa’s operations are largely dependent on the political and economic conditions of Russia. Any change in policy or instability in the region can have a negative impact on the company’s performance.

4. Limited access to Financing: Alrosa’s access to financing is largely dependent on the Russian government. This can be a major roadblock in the company’s growth and expansion plans.

5C Analysis

The 5C Analysis is a marketing framework that can be used to provide insight into the key drivers of success, as well as the risk exposure to various environmental factors.
This (concise) 5C analysis examines the external and internal environment for Alrosa. It includes analysing the company's customers, competitors, collaborators, context, and capabilities. We have produced this short analysis to identify potential opportunities and threats to Alrosa, as well as areas where the company needs to improve its operations or strategy.
Company: Alrosa is the world’s leading diamond mining company, producing over 30 million carats of diamonds in 2019. It is based in Russia and is the largest producer of diamonds in the world.

Collaborators: Alrosa has collaborations with multiple companies around the world, from the United States to India and Japan. These collaborations help Alrosa to expand its reach and expand its customer base.

Customers: Alrosa’s customers include diamond jewellery retailers, diamond manufacturers and diamond traders. Its customers are located in over 65 countries and its products are sold in over 70 countries.

Competitors: Alrosa’s main competitors are De Beers, Dominion Diamond Corporation, Rio Tinto and Lucara Diamond Corporation. These companies are all major players in the diamond mining industry and have strong market presence.

Content: Alrosa’s content focuses on the quality of the diamonds it produces, its commitment to sustainable development, its strong customer relationships and its partnerships with other companies. Additionally, Alrosa regularly produces content that highlights its commitment to safety, its technological advancements, and its commitment to responsible mining.
5C Analysis

MOST Analysis

MOST Analysis

The MOST analysis framework is commonly used to identify an organisation's strategic goals, assess its strengths and weaknesses, and develop a plan to achieve its objectives. This analysis helps organisations to focus on what they want to achieve and how to achieve it, while also identifying potential roadblocks or obstacles that may arise along the way.

  • Mission
  • Objectives
  • Strategy
  • Tactics

We have created this analysis from a 3rd person perspective.

Innovation Scorecard

As part of our research and analysis activity, the team at Platform Executive assesses and then benchmarks businesses and the industry verticals in which they operate using a proprietary scoring mechanism.

First, we allocate a score of A-E for the industry vertical, gauged on the key organisations operating within the space; and then score the individual business using a 1-5 score.

A score of D-E within an industry means that it is potentially ripe to be disrupted by a new entrant into the marketplace; and/or vulnerable to technological change.

Likewise, a high score of 4-5 for the company in question indicates that in the view of the analysis team it lags behind notable businesses in terms of innovation and product pipeline.

Innovation Scorecard

Below is a guide to each score:

Industry score:

A The industry is amongst the most innovative; with the leading players all driving the sector forward.
Example industry: PaaS
B The industry and its leading players have a good track record of innovation; and can quickly react to change.
Example industry: Pharmaceutical
C Companies operating within the sector have adequate levels of innovation; and engage in R&D activities when appropriate.
Example industry: FMCG
DBusinesses operating in the industry do not invest enough time and resource into innovation. The sector is stagnant and a good candidate for disruption.
Example industry: Retail Banking
E The major players in the sector seem to lack suitable product development roadmaps; and as a result the sector is highly vulnerable to industry change.
Example industry: Publishing

 

Company score:

1 The business is amongst the leading players in terms innovation and product pipeline. This will fulfil and reinforce the operations of the business in the medium to long-term.
2 The business has a good track record of innovation, in terms of its products and/or its business model. It is therefore more likely to be able to react and adapt to any changes to the industry.
3 The business is deemed to have an adequate innovation plan, build on research and development and sustainability where appropriate. The business has a product development strategy.
4The business needs to invest more resource and/or intellectual capital in product development, pipelines and/or its business model. The business is at risk of stagnation.
5 The business seems to lack a suitable product development roadmap; and as a result is vulnerable to any notable industry change and/or new entrants in the marketplace.
The team at Platform Executive has judged Alrosa as having an innovation score of C2.

Appendices

The appendices section of this report contains supplementary information that the team at Platform Executive deems helpful in providing a more comprehensive understanding of the report's contents.

This information is not considered an essential part of the study but serves as a useful supplement to the main text.

Methodology

This study on Alrosa forms part of our series of competitive intelligence reports, which focuses on 10,000 of the largest corporates.

The information and data included are updated on a timely schedule to ensure that our Premium members receive the most up to date information .

The report is based on information and learning from the following sources:

  • Corporate websites
  • Proprietary research databases
  • SEC Filings
  • Corporate press releases
  • News articles
  • Financial data API's
  • Product-matching algorithm

Further Information

Premium members: If you cannot find the desired information or data set for the business you are researching then please reach out to our research and analysis team. We can tailor reports to meet your requiremnents, with a fast turnaround time.

If you require a bespoke study on a particular industry vertical, or marketplace we may also be able to help.

Disclaimer

All Rights Reserved.

Reproduction of the content produced in this report is prohibited without the prior permission of the publisher, Platform Executive Pty Ltd.

The facts of this report have been gathered in good faith from both primary and secondary sources. It is believed to be correct at the time of publication, but cannot be guaranteed. As such Platform Executive can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.

Changelog

Premium members: To request a priority update to this report, please contact us. Our standard turnaround time is normally 48 hours.

The changelog for this report can be found below, complete with the next scheduled update:

v1.1: Initial load of report
Date: 1st March 2023

Key Financials added (BETA)
Date: 17th March 2023

Next scheduled update: 6th June 2023

Industry Keywords

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