Introduction
Debswana is a diamond mining firm jointly controlled by the Botswana government and the De Beers Company. The firm has four diamond mines in Botswana and employs about 5,500 people (Business Focus Magazine, 2021). It is among the largest diamond mining corporations in the world and a substantial contributor to the economy of Botswana (Aljazeera, 2021). Debswana will be used as a case study to investigate its current business model approach and assess its sustainability in the competitive business market. It will evaluate possible adjustments that may be made to the business strategy to make it more sustainable. This report will critically discuss Debswana’s present business model and see if there are any ways to make it more sustainable. The Baden-Fuller and Mangematin framework emphasizes customer sensing, interaction, monetization, the value chain, and links; it is crucial in enhancing the sustainability of the business.
Literature on Sustainability
The relevance of sustainable business models in the modern corporate environment is the subject of a growing interest. Several studies have proved sustainable business methods to improve a company’s profitability (Bradley, Parry and O’Regan, 2020). Businesses that adapt to changing market circumstances and satisfy a wider variety of clients are more likely to be sustainable. Waste and Resources Action Programme (2013) aims to ensure businesses actively contribute to a sustainable economy through their efforts to reduce waste, encourage the culture of valuing resources and help businesses gain resource efficiency. A sustainable business model considers the social, economic, and environmental consequences of a company’s actions and seeks to mitigate or eliminate them (Geissdoerfer, Vladimirova and Evans, 2018). Sustainable supply chain methods may include switching to renewable energy sources, decreasing waste, and lowering emissions. When companies do this, they boost their productivity and help society and the environment.
Despite the growing interest in sustainable business models, there are still significant gaps in the literature. Although the positive effects of sustainability on businesses have been the subject of several studies, fewer have examined the difficulties that certain companies may have while attempting to implement sustainable practices (Bocken, Boons and Baldassarre, 2019). Additional study is required to determine the efficacy of various sustainability techniques and how they might be adapted in multiple sectors and settings. Closing these gaps is essential for creating successful and long-lasting company strategies.
Case Introduction and Background
Debswana was established as a partnership between the Botswanan government and the De Beers Group of Companies to mine diamonds. De Beers Botswana Mining Company was founded in 1969 and changed its name to Debswana in 1992 (De Beers Grp, n.d.). It is a large-scale business, the biggest private employer in Botswana, and one of the leading firms in the global mining industry (Debswana, n.d.). Since its founding, it has been the most critical contribution to Botswana’s economy, making up more than 30% of GDP (De Beers Grp, n.d.). The company runs Botswana’s Orapa, Jwaneng, Letlhakane, and Damtshaa diamond fields.
Regarding value, Jwaneng is the highest-income diamond mine, whereas Orapa is the world’s largest (De Beers Grp, n.d.). The business has launched several efforts to reduce its impact on the planet. Consequently, assessing the business’s sustainability is crucial due to the company’s efforts to protect the environment.
Methodology and Theoretical Framework
The methodology section will include using sustainability metrics to assess the current business model of Debswana. The metrics will cover various areas, including the social and environmental impact of the company’s operations. The evaluation will involve identifying and evaluating the complex operational causes and environmental and social or cultural effects. It is important to note that environmental and social auditing is still in the early stages of development compared to financial reporting and auditing. The business model Baden-Fuller and Mangematin (2013) proposed will be used to examine sustainable company concepts. Customer sensing, engagement, monetization, and value chain and connections are the main components. Secondary data sources will be used to compile information for this research to understand Debswana’s business strategy. Information on the mining sector in Botswana will be gathered from various web sources, industry reports, and news stories.
Analysis of Case Study
Application of Baden-Fuller and Mangematin Model
Debswana’s business model may be evaluated using the Baden-Fuller and Mangematin framework. The consumer sensing component entails segmenting the clients and learning what each subset of customers wants (Panchal and Krishnamoorthy, 2020). Debswana sells its diamonds to consumers worldwide via the huge De Beers Group supply chain (Henderson, 2020). The exported diamond massively contributes to the nation’s gross domestic product (De Beers Group of Companies, 2022). The firm additionally helps the growth of Botswana’s diamond-cutting and polishing sector by supplying raw diamonds to local producers. Therefore the mining of diamonds by the Debswana Company is vital to the economy and consumers.
Debswana’s business model in terms of customer involvement is to provide high-quality diamonds while doing business responsibly and sustainably. The firm has created several initiatives, such as the Supplier Code of Conduct and the Diamond Trading Company (DTC) Best Practice Guidelines, to guarantee the highest ethical and responsible conduct standards in all commercial dealings (De Beers Group, 2020). Debswana works with nearby communities via programs like the Social Impact Assessment and Management Program at the Orapa, Letlhakane, and Damtshaa Mines.
Monetization is the process through which a company extracts financial benefits for itself. The company uses many methods to generate revenue from its products. They use strategies such as investing in cutting-edge technology like blockchain to increase the openness of supply chains (De Beers Group of Companies, 2022). It additionally markets polished diamonds under the Forevermark brand name (De Beers Group of Companies, 2022). Debswana’s diamond sales are a significant source of income for the Botswanan government and economy (De Beers Group of Companies, 2022). The organization hopes to save on expenses with improved methods and new ideas. For instance, Debswana used a novel cutting technique called Cut 9 at the Jwaneng mine to extend the mine’s useful life and decrease operating expenses (Lock, 2019). Reducing the expenditure on mining activities will thus help increase the company’s profit margin.
Lastly, the framework’s value chain and connections section entails learning how a business gets its wares to its clients. Exploration, mining, refining, grading, marketing, and sales are all links in Debswana’s value chain (Barrington, 2022). The utilization of renewable energy sources and water conservation methods are only two examples of the many initiatives the firm has taken to guarantee efficiency and sustainability throughout the whole value chain. Debswana has partnered with the Botswanan government and local communities to promote long-term growth and prosperity.
Sustainability of the Current Business Model
Social auditing, the global reporting effort, and environmental risk assessment may all be used to assess Debswana’s business model’s sustainability. It is crucial to consider the impact on air quality, landscape, and water pollution in assessing the degree of environmental pollution (Department for Environment, Food & Rural Affairs, 2023). The company’s operations are evaluated for their social effect via social auditing, which looks at how the business’s operations influence the stakeholders and communities it engages with. Debswana’s performance in terms of sustainability may be evaluated and reported on using the global reporting initiative (GRI) methodology (Global Reporting Initiative, 2023). Debswana uses GRI to report its economic, environmental, and social sustainability implications to stakeholders, such as investors, clients, and workers. The business may pinpoint areas where its sustainability performance needs improvement and monitor its development over time.
Environmental risk assessment helps Debswana to identify and evaluate the environmental risks associated with its operations. ISO 26000 provides guidelines on how organizations can operate in a socially responsible manner, considering the interests of stakeholders such as customers, employees, suppliers, and the environment. (Soderberg, 2012). One of the most notable projects is using sustainable technology, which includes employing electric vehicles in the mining process and installing solar panels to light its offices and facilities. The organization has also created an environmental management system that involves frequent evaluation and communication of its environmental performance and emphasizes lowering water usage and waste generation.
Social auditing is a tool used to assess a company’s social performance, including its impact on the communities in which it operates. Debswana has devoted considerable effort and time to ensuring its existing business model can last. The present business model’s strength is its focus on participation from key stakeholders (De Beers Group of Companies, 2022). The firm has shown a deep dedication to communicating with all groups interested in its success, such as neighborhood residents and environmental advocacy groups (De Beers Group, n.d.). Due to the comprehensive and uniform framework, the GRI Guidelines provide for reporting on sustainability performance. Stakeholders can comprehend a company’s sustainability effects and activities. The sustainability report for Debswana contains details on the country’s environmental effects, labor policies, human rights, community involvement, and other important sustainability issues. Debswana’s present business strategy benefits immensely from its emphasis on ecological sustainability.
There are specific weaknesses in the existing business model, notwithstanding its benefits. The corporation relies heavily on diamond mining, one of its primary problems (De Beers Group of Companies, 2022). It exposes the corporation to changes in the worldwide supply and demand for diamonds, which might have severe repercussions for the company’s finances and operations. In conclusion, Debswana’s existing business strategy contains both strengths and disadvantages that may threaten the company’s viability in the long run. Therefore, the corporation should think about ways to broaden its economic base and lessen its reliance on diamond mining, all while maintaining its commitment to shareholder participation and ecological responsibility.
Reconceptualization of the Business Model
Debswana should prioritize creating a thorough communication plan to ensure that all stakeholders get frequent information on its sustainability initiatives. Employees, clients, local communities, and environmental advocacy organizations should all be considered. The business may use a variety of channels for communication, such as regular newsletters, social media updates, and other pertinent outlets. This strategy will support the development of an accountable and transparent culture. The company should evaluate its recruitment practices to make sure they support its dedication to sustainability, diversity, and inclusion. The organization should try to acquire people from various backgrounds and create a new hire orientation program that stresses the value of sustainability. This strategy will assist in developing a staff that is knowledgeable about sustainability principles and can support the company’s sustainability objectives.
Debswana must implement a monitoring mechanism that monitors sustainability performance over time. Regular evaluations of the system’s effects on the environment, society, and economic metrics should be included. Monitoring will aid in ensuring that the business’s sustainability initiatives are long-lasting. More potential clients will be drawn to the company due to the positive reputation it will establish based on the changes(Mardani, 2020). Profitability and growth will increase, and environmental and social responsibility may improve. The changes to the company model need to be assessed for their feasibility. Resource availability, technical prerequisites, and regulatory compliance are all crucial considerations (Aghahosseini et al., 2019). To guarantee that the interests and viewpoints of all relevant parties are considered, it is crucial to include them in the decision-making process.
Conclusion and Reflection
The research concludes with an analysis of Debswana’s existing business model approach, an assessment of its sustainability, and recommendations on how to make the model much more sustainable. Current business model strengths and shortcomings were identified using the Baden-Fuller and Mangematin framework. Improvements to the present model that would increase its longevity were revealed by examining consumer sensing, customer interaction, monetization, the value chain, and links. The business should evaluate and improve its recruitment policies to promote diversity, inclusion, and sustainability, and establish an ethics committee to oversee ethical concerns. Benchmarking, establishing control groups, and monitoring sustainability efforts are essential in identifying areas that need improvement and taking action to address them. A cost-benefit analysis can help assess sustainability measures’ social and economic costs in a business. The report concludes that implementing these changes could lead to a more sustainable business model for Debswana. It will improve its profitability and enhance efficient competition in the global market.
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