Nucor at Cross Roads - Swot Hbr Case

Topics: Steel, Market, Investment Pages: 3 (679 words) Published: September 17, 2011
Week 3: Nucor at Crossroads


* Strong leadership & progressive company culture => decentralized management philosophy, egalitarian benefits, performance based compensation, strong emphasis on customer service and quality, and technological leadership through consistent investment in R&D and modernization of plant & machinery * Strong financials => consistent growth in sales and profits during the last 3 years (1983 to 1985) with the most recent year (1986) resulting in a sales figure of $755Mn (down $3Mn from last year) and net earnings of $46Mn. * Flat structure => leading to improved communication (formal & informal) between corporate and factory and amongst factories (interplant) => leading to improved efficiencies / productivity * High employee morale, low staff turnover compared to industry average => a culture that promotes team work, high levels of commitment and hard work => compensation schemes designed to reinforce the relationship between pay and performance and to reward production groups rather than individual performance. Also attractive incentive and reward schemes for employees (eg. bonuses, stock options, health coverage, college education for children of employees). * Nucor’s geographic spread (by 1986 Nucor had 16 plants in 10 locations around the United States) => these facilitate easy access to customers (markets) or sources of raw material (iron ore).

Weaknesses / Concerns:

If Nucor decides against investing in CSP, then they run the risk of allowing their competitors to acquire this technology and commercializing it first to the market. At the same time, there are also risks to Nucor of choosing to adopt the CSP technology: * The design of CSP is sensitive to scrap prices => price should be below $140 per ton * The design is only in its infant stage, continuous operation should be completed before making a...
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