Nucor Case Study
NUCOR (25 Points)
1. List and elaborate some strategic issues facing NUCOR?
Nucor has been facing many industry challenges including the overall development of the industry. They are competing with foreign firms on cost and efficiency. Nucor has a low cost strategy because as they say their product is not necessarily very attractive. It does not have attractive or unique selling features other than its cost. The commodity of steel is in a very competitive market. Nucor understands that innovation and productivity are going to be key factors to keep their buyers satisfied with their prices. Nucor is facing many challenges with a growing world market and many of their competitors merging in order to create stronger more dominate conglomerates. The company is also facing several issue with other countries illegal dumping or subsidizing steel in the United States. This creates major strategic problems for Nucor because their prices are being matched or undercut and there is no protection to help them retain their market share or expand it. This lack of protection from foreign firms has become a problem from Nucor and one they will have to navigate to remain successful.
2. What are the key elements of NUCOR’s low cost strategy? What factors have helped Nucor achieve a low cost position?
One key element to Nucor’s low cost strategy is to keep executives from making exorbitant amount of money. Nucor tries to make sure that they keep rising employees salaries proportionate to the growth in profits that the company sees. Nucor has developed many innovative technologies such as automated inventory systems. They make their steel mills automated whenever possible and continue to raise the bar in productivity. Nucor has been leaps and bounds in the steel productions facilities allowing them to keep their costs very low. They have also been able to reduce cost by keeping the number of employees down to a minimum and paying them less than the industry standard but giving the
1. List and elaborate some strategic issues facing NUCOR?
Nucor has been facing many industry challenges including the overall development of the industry. They are competing with foreign firms on cost and efficiency. Nucor has a low cost strategy because as they say their product is not necessarily very attractive. It does not have attractive or unique selling features other than its cost. The commodity of steel is in a very competitive market. Nucor understands that innovation and productivity are going to be key factors to keep their buyers satisfied with their prices. Nucor is facing many challenges with a growing world market and many of their competitors merging in order to create stronger more dominate conglomerates. The company is also facing several issue with other countries illegal dumping or subsidizing steel in the United States. This creates major strategic problems for Nucor because their prices are being matched or undercut and there is no protection to help them retain their market share or expand it. This lack of protection from foreign firms has become a problem from Nucor and one they will have to navigate to remain successful.
2. What are the key elements of NUCOR’s low cost strategy? What factors have helped Nucor achieve a low cost position?
One key element to Nucor’s low cost strategy is to keep executives from making exorbitant amount of money. Nucor tries to make sure that they keep rising employees salaries proportionate to the growth in profits that the company sees. Nucor has developed many innovative technologies such as automated inventory systems. They make their steel mills automated whenever possible and continue to raise the bar in productivity. Nucor has been leaps and bounds in the steel productions facilities allowing them to keep their costs very low. They have also been able to reduce cost by keeping the number of employees down to a minimum and paying them less than the industry standard but giving the