Nucor Competitive Strategy

Topics: Steel, Strategic management, U.S. Steel Pages: 17 (4178 words) Published: September 7, 2008


1.Case Profile
2.Situational Analysis
2.1General External Environment (PESTLE model)
2.1.1 Political/Legal
2.1.2 Economic
2.1.3 Sociocultural
2.1.4 Technological
2.1.5 Environmental
2.1.6 Demographic
2.1.7 Global

2.1 Industry Analysis (Porter 5 Forces)
2.2.1 Threat of new entrants
2.2.2 Bargaining power of suppliers
2.2.3 Bargaining power of buyers
2.2.4 Threat of substitute products
2.2.5 Intensity of rivalry

2.3 Competitive Environment Analysis
2.3.1 Future objectives
2.3.2 Current strategy
2.3.3 Assumptions
2.3.4 Capabilities

3.Strategic Analysis
3.1 Strategies
3.1.1Operational level
3.1.2Business level
3.1.3Competitive level
3.1.4 Corporate level

4. Core Competencies
4.1Tangible resources
4.2Intangible resources

5.Value Chain
6.Sustainable Competitive Advantage
7. Performance Appraisal

8. SWOT Analysis
8.1 Strengths
8.2 Weaknesses
8.3 Opportunities
8.4 Threats

9. Strategy Formulation and Implementation
9.1 New Initiatives to Sustain Growth

APPENDIX 1: Top-30 producers by International Iron & Steel Institute APPENDIX 2: Top Competitors Key Measures: NUCOR

Case Study Analysis: NUCOR

1. Case Profile
Nucor Corp., the U.S largest mini-mill operator1 and largest steel manufacturer by tons produced2, continues to lead the industry in efficiency, technological innovation, profitability and delivery of high quality products at low cost structure, after a record of more than 16 years of rapid growth in a declining industry3. And with a strong relationship with its workers without unionization, Nucor’s employees claimed to be the industry’s most satisfied, most motivated and most productive, making them a formidable workforce. This case considers how Nucor has achieved its success and how to sustain it.

2. Situational Analysis

2.1. General External Environment (PESTLE model4)

2.1.1. Political/legal. The steel industry has seen rocky labour relations since the late 19th century with fatalities to striking workers4. Majority of workers are represented by the United Steel Workers of America. Another issue is the integrated steel producers have filed charges against importers of dumping steel prices, blaming them especially Japan, for declining market shares. Nucor’s plant in Hertford County was located on the banks of a fishery that required restoration in a law passed in 1997.

2.1.2 Economic. Steel industry is a cyclical business, subject to economic fluctuations since it depended on durable and capital goods (car, building). The industry does well during economic expansion and suffers losses and even bankruptcies during economic downturn.

2.1.3. Sociocultural. The industry became a source of employment, symbolizes American economic power and pride during good times and symbolizes economic decline and source of shame when foreign companies took over market shares5.

2.1.4. Technological. Technology drives major changes in the production process to increase flexibility, efficiencies and allowed automation which include the continuous casting technology, blast oxygen furnace and electric arc furnace.

2.1.5. Environmental. Nucor’s mill in Crawfordsville, Indianna was alleged to have violated federal and state clean air rules and discharge of 6,720 tons of pollutants into the air each year by U.S. Environmental Protection Agency.

2.1.6. Demographic. Mini-mills which are located close to customer base has moved as population of U.S. moved to south and west. Demographic shifts affect the industry since construction utilizes a significant amount of steel.

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