To: Michael Howe
From: Suya Chen
February 13, 2013
The major player in the U.S. steel industry. And change into the global steel industry (especially Asia market). Mission
Nucor Corporation’s goal is to "Take Care of Our Customers.” they are accomplishing this by being the safest, highest quality, lowest cost, most productive and most profitable steel and steel Products Company in the world. They are committed to doing this while being cultural and environmental stewards in their communities where they live and work. They are succeeding by working together. " Corporate Level Strategy
Business Level Strategy
• The strong leadership at all levels by being able to make quick decisions and be accountable for it as well as share their success and failures with each other. This approach towards employee benefit and welfare, compensation based on group performance and production quality, training and job rotation to ensure all employees know all areas of work and an approachable management which practices open communication as well as top to bottom risk taking and innovative culture complemented each other to have created a highly motivated, productive, flexible and innovative workforce. • Close relationship with major customers who have co-located with them results in lower shipping cost and lower price for customers. • Nucor is able to provide superior quality products. Nucor’s superior financial performance is the best in the industry in United States. It is also North America’s largest recycler. Weakness:
• Almost all of Nucor’s plants are in US making it difficult to compete with Asian manufacturers with lower production costs. Production is energy intensive (20% of total cost). Nucor is dependent on scrap metal. • No internal R&D performed makes it dependent on suppliers or partners to bring in new technology. • Being a decentralized organization, there is no coordination between divisions during purchasing or sales which results in duplication of sales and marketing effort and not capitalizing on economies of scale for purchasing. Opportunities:
• There are a lot of opportunities for Nucor to expand through mergers and acquisitions, to perform market research to understand existing customers’ product or business roadmaps, to perform R&D to find new steel products, better manufacturing technology and improved process as well as to capture and process waste energy & products into electricity or some useful product for another industry.
• There is also further opportunity to improve inbound and outbound logistics and also to export steel to emerging markets such as Japan, China, Germany and Russia where the demand is growing.
• The major threats that Nucor are facing are increased competition due to globalization, scarcity & rising raw material and energy costs, tougher environmental laws and free trade agreements which allows foreign players who have cheaper labor force, reduced regulation and unfair subsidies to have the cost advantage, being bought over by larger competitor and cyclical demand for steel products.
The objective has been to lay the groundwork on which future analysis can be based and provide a greater understanding of evolution toward strategic fit, and, perhaps even more importantly, the origins of misfit.
Joint Ventures & Acquisitions
• TO grow globally with joint ventures and the licensing of new technologies. Nucor had recently partnered with lots of internal corporations to operate an environmentally friendly pig iron project. Additionally, to develop a low-cost substitute for scrap steel in raw materials field.
• Nucor lists some strategic acquisitions that could strengthen Nucor’s customer base, geographic coverage, and lineup of product offerings.