Nucor Case Study
Case Background
The Industry
Nucor Corporation has been moving in a very challenging industry which has faced various problems in recent years. The steel industry experienced slowed demand for steel which resulted from substitution of alternative materials. Furthermore, it also had to cope up with increased foreign competition and strained labor relations.
But despite all these obstacles, Nucor Corp. still managed to have a five-year sales growth average of 23%, which is 11 percentage points higher than the nearest fast-growing competitor. The company even had a 5-year ROE average growth of 18% which is more than double than the industry average while maintaining a healthy financial condition having 7% debt to capital percentage, the lowest among steel producers in 1998.
The Company
The story of Nucor Corporation is such a success story. Nucor Corporation had its humble beginning in the 1950s as Nuclear Corporation of America which was involved in the production of nuclear and other electronics instrument. Today, Nucor Corporation, a Fortune 500 company is the second-largest steel maker in the country with nine steel-related businesses and 25 plants all over America. The company is focused on its commitment to produce high-quality steel and steel-related products at competitive prices. It has been at the forefront of innovation as its President Ken Iverson was awarded with the National Medal of Technology in 1991, the country’s highest award for technological achievement and innovation.
Come 1998, despite the many challenges that the steel industry faced such as foreign competition, strained labor relations and slowed demand for steel, Nucor Corporation has sustained an annual growth of 17%. The company’s key financial ratios – sales, ROE, debt-capital ratio, and profit margin were even way beyond the industry median. This made Nucor corporation America’s second largest steel-maker with an annual compounded sales growth rate of 17%.
And yet the
The Industry
Nucor Corporation has been moving in a very challenging industry which has faced various problems in recent years. The steel industry experienced slowed demand for steel which resulted from substitution of alternative materials. Furthermore, it also had to cope up with increased foreign competition and strained labor relations.
But despite all these obstacles, Nucor Corp. still managed to have a five-year sales growth average of 23%, which is 11 percentage points higher than the nearest fast-growing competitor. The company even had a 5-year ROE average growth of 18% which is more than double than the industry average while maintaining a healthy financial condition having 7% debt to capital percentage, the lowest among steel producers in 1998.
The Company
The story of Nucor Corporation is such a success story. Nucor Corporation had its humble beginning in the 1950s as Nuclear Corporation of America which was involved in the production of nuclear and other electronics instrument. Today, Nucor Corporation, a Fortune 500 company is the second-largest steel maker in the country with nine steel-related businesses and 25 plants all over America. The company is focused on its commitment to produce high-quality steel and steel-related products at competitive prices. It has been at the forefront of innovation as its President Ken Iverson was awarded with the National Medal of Technology in 1991, the country’s highest award for technological achievement and innovation.
Come 1998, despite the many challenges that the steel industry faced such as foreign competition, strained labor relations and slowed demand for steel, Nucor Corporation has sustained an annual growth of 17%. The company’s key financial ratios – sales, ROE, debt-capital ratio, and profit margin were even way beyond the industry median. This made Nucor corporation America’s second largest steel-maker with an annual compounded sales growth rate of 17%.
And yet the