Nucor Swot Case Study

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Mission Statement
The following is Nucor’s Mission Statement from their company website:

Nucor Corporation is made up of 17,300 teammates whose goal is to "Take Care of Our Customers." We are accomplishing this by being the safest, highest quality, lowest cost, most productive and most profitable steel and steel products company in the world. We are committed to doing this while being cultural and environmental stewards in our communities where we live and work. We are succeeding by working together.

Strategic Profile and Case Analysis Purpose
Nucor is a leading steel manufacturer and recycler in the United States. Their headquarters are located in Charlotte, North Carolina, and the company is made up of about 17,300 teammates, as they are referred to on the company’s website . According to Datamonitor’s Company Profile, revenues for 2006 were $14,751.3 million, a 16.1% increase over 2005. In the same profile, net profit was recorded at $1,757.7 million for 2006, a 34.1% increase over the previous year. Nucor operates in two main segments: steel mills, which account for 88.3% of total revenues, and manufacturing of steel products, which accounts for 11.7% of total company revenues.

“Nucor in 2005” by Frank Barnes and Beverly Tyler, briefs us on Nucor’s two main core competencies that have kept it successful when competitors have not been: their ability to stay innovative and their distinct organizational structure. These two competencies have made Nucor one of the top leaders in the American steel industry, which has impacted its historical strategic direction and performance, as will be seen in the following case analysis.

The purpose of this case analysis is to better understand Nucor’s core competencies, as well as to analyze the current situation surrounding the company. This case analysis will include a general environmental analysis, industry analysis, competitive environmental analysis, internal analysis, and SWOT analysis. These analyses will help us better understand Nucor, as well as help us create competitive strategies for the future.

Situation Analysis

General Environmental Analysis: PESTEL
Understanding the external environment of the steel industry is necessary in order to better understand the internal environment of Nucor Corporation. The following is the PESTEL analysis for the steel industry, with remarks towards Nucor when needed.

Political
There are a few main political issues currently affecting the steel industry. First is the issue of protective tariffs on the steel industry. In the case study, it is noted that in “…March 2002, President George W. Bush, after an investigation and recommendation by the International Trade Commission, imposed anti-dumping tariffs under section 201 of the Trade Act of 1974. This restricted some imports of steel and placed quotas of up to 30 percent on others. The move was opposed by many, including steel users”. Current CEO and President of Nucor, Daniel DiMicco, had been pushing for protective tariffs after the surge of imports and the current economic recession. Bush’s tariffs led to global responses of import and export tariffs, causing the price of steel to increase 40 percent. In November of 2003, the WTO ruled against the tariffs and Bush withdrew the tariffs in fear of further retaliation.

An additional issue is the practice of giving monetary incentives to companies to convince them to build their steel mills in certain locations. Nucor was given $155 million in tax breaks as incentives from North Carolina to build a $300 million steel mill. Debate has rising over whether or not it was worth the incentives to bring 300 new jobs to North Carolina.

Economical
Economical issues have had a large effect of the steel industry. Current issues they are facing include bankruptcy, a weak dollar, global competitors consolidating, and rising energy prices.
According to the case study, 25 percent of domestic...
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