Nucor Strategic Issue

Topics: Steel, Steel mill, Pig iron Pages: 24 (6527 words) Published: July 28, 2010
copyright - University of Dayton students - angie, nancy, lisette, kim, bob

1. Identification of a Significant Strategic Issue3
2. Analysis4
2.1 General/ External environment4
2.2 Industry environment6
2.3 Segment analysis/ Strategic groups8
2.4 Competitive dynamics8
2.5 Business level strategy9
2.6 Value10
2.7 Internal environment11
2.8 Value chain and value proposition15
2.9 Corporate level strategy16
2.10 Mechanisms17
3. Identification and Evaluation of Alternate Courses of Action for Resolution18 4. Recommendations and Justifications for Alternative Courses of Action18 5. Plan for Implementation18

1. Identification of a Significant Strategic Issue

(Nucor distinguishes itself from the rest of the steel industry with its use of scrap steel, a fact that makes Nucor the largest recycler in the nation.[25] Furthermore, the company uses modern steel making techniques allowing Nucor to employ fewer workers. The workers that Nucor does employ are all independent of unions; these workers have a vested interested in the productivity of the company because a significant portion of their compensation is based on their own productivity.[26] In addition, Nucor has recently focused heavily on acquisitions to increase production capacity and to make the company more competitive in the global market.[27]

| | |Total Global |Total Sales |Cost of Sales |Operating |% | | | |Steel | | |Income |Gr| | | |Production | | | |os| | | | | | | |s | | | | | | | |Ma| | | | | | | |rg| | | | | | | |in| | | | | | | |s | |Nucor |22.12 |$14.75 |$12.05 |$2.7 |18% | | |US Steel (X) |21.63 |$15.72 |$13.93 |$1.79 |11% | | |Arcelor Mittal (MT) |110.5 |$58.87 |$51.37 |$7.50 |13% | |

Source: 2006 Company Reports ) - wiki


Source: www.wikinvest .com

2. Analysis

2.1 General/ External environment

It is important to consider both direct and indirect impacts while evaluating a firm’s external environment. The changes in the costs of raw materials or labour, affect as much as changes in emerging markets and political policies.

To be successful in any industry, a firm should be able to respond to market changes. Throughout the 60 years of its existence, Nucor has been able to balance a healthy and productive work environment with the continually changing political policies, economic cycles and technological advancements to sustain profitability.


Nucor’ non unionized workforce is a perfect example of its unique personnel policies. Inherent in its management philosophy, all workers, regardless of their standing with the firm, deserve to be are treated equally and all employees received the same fringe benefits and only one group of insurance. The compensation is directly linked to performance of the employee. Furthermore, the incentives plan...
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