After having a monopoly in the diamond market for many years, by 2000, De Beers faced competition from other companies. To maintain its market share, De Beers:

A. lowered the prices of its diamonds to make the market appear less profitable to potential competitors.

B. began buying so-called "blood diamonds" in order to keep these diamonds out of the control of other diamond companies.

C. adopted a strategy of differentiating its diamonds. Each of its diamonds is now marked with a microscopic brand.

D. bought diamond mines in Canada and Russia that had been its competitors.

The correct answer is C. adopted a strategy of differentiating its diamonds. Each of its diamonds is now marked with a microscopic brand.

During some period, De Beers holds almost 85% of the world's total stock of diamonds. Therefore, De Beers had control of the diamond supply due to its monopoly power. However, in the second half of the twentieth century, new mines were found in other places allowing the entrance of new competitors. Due to this situation, De Beers had to implement a strategy (differentiation) to maintain part of their existing market share. So they decided to use a microscopic inscription in their diamonds along with a certificate of authenticity to ensure that diamonds are conflict-free.

In contrast, lowering the prices would not be an effective way to maintain the market share due to the type of commodity traded (luxurious). As mentioned previously, De Brees ensures that their diamonds are responsibly sourced. Additionally, they could not buy since now they only hold about 35% of the market.