Nucor Strategy

Topics: Recyclable materials, Steel, Investment Pages: 1 (366 words) Published: November 28, 2011
4. What type of strategy has Nucor followed? Which of the five generic strategies discussed in Chapter 5 is Nucor employing? Is there any reason to believe that Nucor has achieved a sustainable competitive advantage over many of its steel industry rivals? Is so, what type of competitive advantage does Nucor enjoy? Since F. Kenneth Iverson took the role of CEO at Nucor, he guided the company to work under a focused low-cost leadership strategy, with great focus in high quality and employing state-of-the-art technology to help keep costs and labor low. As they entered the market and discovered more possibilities in the steel industry, through expansions and acquisition, the company continues with a low cost strategy and as they increased their product line, this expansion changes their strategy to an overall low-cost provider strategy. This strategy as well as their investment in technology allows Nucor to earn higher profits than rivals. Among the strategies that Nucor has employed to obtain and maintain a sustainable competitive advantage over many of its industry rivals, are the high amount of investments in technology and great savings in cost such as carefully selecting the geographical locations for a new plant were electricity is not expensive and also since the scrap metal is expensive they acquired a supplier of scrap metal and started a backward integration process. Throughout their extensive investment in technology in the effort of lowering cost and increasing employee’s performance, Nucor maintains significant cost advantage over their competitors. Besides incredible machinery and high-tech equipment, Nucor has a mini-mill with really advanced technology which uses electric arc furnaces to melt scrap steel and pours it into molds to obtain final products. This mill saves a lot of money since the labor and capital requirement to melt steel scrap and produce crude steel are far lower than those conventional integrated steel mills, were raw steel...
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