Essay on Continuous Casting Investments at USX Corporation

1154 Words Nov 22nd, 2008 5 Pages
Do you think Kappmeyer should sign the proposal, and why? What pushed USS to stay with conventional technology?
My recommendation based on analysis of the case and understanding the basic nature of disruptive technologies, and their impact on the general industry is that Kappmeyer should not sign the proposal.
The main reason for that is USS is tying itself to an existing, but dying business model and technology. While this plan may make sense in the short-term, it does not have long-term sustainability. The market has already indicated that it is changing, adapting to minimills, and this trend would likely continue. As minimill technology becomes more sophisticated, their quality and other disadvantages would reduce and they would
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While it may sense in the short-term foreseeable future, for long term survival USS would need to embrace the disruptive technology.
Looking at CSP technology only from the Mon Valley perspective is a mistake – the current plant puts a lot of restrictions on the project. If the technology and market is looked at independently from Mon Valley, then my recommendation would be more concretely recommend investing in a new greenfield plant based on the minimills model. It may also be practical for USS to house the disruptive technology as an independent entity.
As the market and industry changes, minimills and CSP would mature to improve quality, and further widen the gap between themselves and integrated producers such as USS. Sooner or later, USS would have to modify its production and business models to survive the industry. If it does not do that right now, there is a good possibility that it will be too late.


What are other decision alternatives? What are the reasons of choosing each alternative? What will these reasons look like in five years?
The company should follow a combination of the following options to maintain long-term competitiveness: • Close Mon Valley: USS already has close to 25% of unused capacity. Currently (1990) they have approximately 14.4 million tons of capacity. The Mon Valley plant would add another 3MM in capacity which is not necessarily needed. Maybe there is an opportunity to shift some (or most) of the orders from this plant to…

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