Continuous Casting Investments at USX Corporation

Topics: Term, Time, Disruptive technology Pages: 4 (1162 words) Published: September 13, 2008
Do you think Kappmeyer should sign the proposal, and why? What pushed USS to stay with conventional technology?
My recommendation based on analysis of the case and understanding the basic nature of disruptive technologies, and their impact on the general industry is that Kappmeyer should not sign the proposal.

The main reason for that is USS is tying itself to an existing, but dying business model and technology. While this plan may make sense in the short-term, it does not have long-term sustainability. The market has already indicated that it is changing, adapting to minimills, and this trend would likely continue. As minimill technology becomes more sophisticated, their quality and other disadvantages would reduce and they would start competing with integrated manufacturing even in the high-end markets. Unfortunately for USS, there is no silver bullet. Since USS is already invested in the market, they will have to go through a difficult, and expensive, change, or they will end up perishing as the industry changes around them.

USS current decided to stay with conventional continuous casting technology simply because they were looking at the shorter-term future, and was not willing to take the financial hit and risk associated with a new disruptive technology. Additionally, they were tying themselves to the requirements of the current customers, and ignoring potentially new users for the future.

Did the USS team get the right answer to the wrong question? What if, rather than asking whether USS should install CSP in Mon Valley, Kappermeyer has asked whether USS should invest in or participate in this technology? Would you have answered that question differently than you did when the problem was framed as a Mon Valley issue?

My recommendation was that USS should not sign this proposal, and that remains the same whether the issue is addressed with respect to Mon Valley or independently. The main reason for disagreeing with investing in the proven...
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