Nucor Case Analysis

Since steel is a commodity it leads to very volatile prices and can change quite frequently due to demand. By looking at Exhibit 1, you can see how the average price per ton decreased form $425 per ton in 2000 to $354 per ton in 2001. This exhibit shows how many tons of steel Nucor sold during certain years from 1970 to 2006. It is interesting to see that Nucor’s net income was fairly low during the years of 2000-2002, but increased to $1,121.5 million. This is because of Nucor’s many acquisitions during the low period. Just a few years later in 2004, the price of steel was back up to $595 per ton.

II. Strategy Identification The challenges faced by Nucleon, Inc. present more of an issue with how to take full advantage of an opportunity in front of them, rather than a problem that poses a threat to the company. As a company in its early stages, only putting out its first product, it is critical that it is done in a manner that allows the budding firm to grow. The main issue here is determining the most effective means by which they are to manufacture and market their first product, CRP-1. Doing so requires in-depth evaluation of three strategic options, all with their own benefits and potential risks. The problem statement, therefore, is as follows:

. Executive Summary Upon Review of Nucor Corporation’s current findings, analysis of internal strengths and weaknesses, as well as a comparative analysis at the industrial level of the steel industry, the following includes a summary of findings and recommendations for Nucor Steel Corporation:

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

• Scalability: Relatively easy to scale up due to complete control over the processes • Core competencies, capabilities and capacity: This option would require a high level of changes within the organization. Nucleon’s existing core competencies and capabilities is in the area of R&D. It has no prior experience of production and manufacturing. Manufacturing is significantly different than R&D. It would require Nucleon to acquire different talent, skillsets, experience and very difference focus in developing manufacturing competencies and capabilities.

Section 2: Problem(s) Even Another recommendation that I have for Nucor is instead of buying existing plant capacity, make new plants elsewhere or form a joint venture with a supplier to help save money. (Exhibit 3) This would decrease cost of supplies so they would have the extra money to build elsewhere or build a ne plant. By using the SWOT analysis (Exhibit 1) it let me break up Nucor into different parts to see what their strengths and weaknesses are. Nucor is solid with technology and treating the employees correct but the weaknesses that affect Nucor are more market based with some internal problems. Nucor has products for many different industries including automotive and housing. This can cause issues for Nucor if those industries take a fall, which they have over the last 5 years. It’s a good idea to be in these industries but Nucor has to realize what can happen to sales and revenues when one or both of those industries take a fall. Nucor has been expanding more in the United States, recently just building a plant in Louisiana (Exhibit 5). This plant will be a 750 million dollar purchase and will be a mill for pig iron. Nucor is expanding all over the United States but needs more presence internationally plan and simple. Nucor is a solid company with shareholder equity increasing each year; they have a solid stock in the NASDAQ market and continue to be a healthy steel company. They can and will

3/ What is your recommendation regarding Nucleon’s long-term manufacturing strategy? What should this company look like in 10 years (e.g. an R&D boutique, an R&D boutique with pilot scale manufacturing capabilities, or an integrated manufacturing enterprise)?

In terms of industry profitability, it appears that profit margins have a tendency to fall. This is because competition is high and customers tend to buy low-priced high-value items. The average gross margin and net profit margin is 37.1% and 14.3%, respectively (MSN Money, 2010).

The National Steel Car company is based in Canada in Ontario and it happens to be the leading railroad freight cars company in North America. The company has been respected for its respected value in the market and has always been committed to success. National Steel Company is 9001:2008ISO certified, and it is the only freight car in the region to have been awarded the certification. It was established in the year 1912 and took the right turn when it was purchased by Gregory James Aziz who has made the company improve capacity since the purchase date in the year 2005. Greg Aziz happens to be the president, chairman, and the company’s CEO and has dedicated his time and resources to the company success. His only commitment is making the company

C. In the early of 2000, Nucor followed growth strategies Iverson was a leader who walked the talk. He proved himself as a “Master in crafting and executing a low-cost leadership strategy and he made a point of making sure he practiced what he preached”. In 1968, Nucor integrated backward into steelmaking due to the benefits of supplying its own steel requirements for producing steel joists and the opportunities to capitalize on newly emerging technologies to produce steel more cheaply. Until now, Nucor Corporation is one of the largest steel producers and the largest steel scrap recycler in North America. Nucor Corporation remains Operation as series of low-cost, highly productive steel mini mills utilizing scrap and Metallic Raw Materials, together with Technology as Electric Arc Furnaces.

National Steel car success has been realized by working together as a team. Its customer care skills are as well above par as it treats all its clients with much respect as it values their contributions in the freight car industry. Currently, the company has employed more than 2000 employees who are expert in their work and are full of integrity. For that reason, National Steel Car has been internationally certified by ISO. The Company has also been honored with the highest award for its provision of quality, TTX SECO, from 1996

1. Give a synopsis of the case. Nucor's has had a stimulating company history that emerged from two corporate failures. Nuclear Corp. which objective was to participate in the conglomerate trend popular at the time. Nuclear at this time acquired a various high-tech business, such as radiation sensors, semiconductors rare earth, and air conditioning equipment. The company did not create profits and was eventually reorganized in 1966 with Ken Iverson in charge. Iverson should be viewed as the founding father of what we know as Nucor today. Iverson was hired because of his great knowledge and experience of both Aeronautical engineering and business management. He singled handily prevent Nucor's 1965 Bankruptcy by liquidity and permanently closing esoteric, unprofitable, unrelated, high-tech divisions and concentrated on the steel joist business. This action proved to be successful. Nucor contained on this successful trend by opening additional joist plants and in 1968

Nucor Corporation got its start in the 1950’s making nuclear instruments as well as electronic products. It struggled for many years and by 1964 was facing bankruptcy. Around the mid 1960’s it was decided that it was best for the company to exit its current market and focus on its profitable Vulcraft subsidiary steel joint business. In 1968, management then made the decision to integrate backward into steelmaking. In 2012, Nucor was the largest manufacturer of steel and steel products in North America.

Nucor takes a simple approach to succeeding in the industry of steel. At its mini mills, Nucor produces hot- and cold-rolled steel, steel joists, and metal buildings. It has the capability to produce more than 26 million tons of steel a year. Being one of North America’s largest recycler of scrap metal, it produces steel by melting scrap in electric arc furnaces. Most products are sold to steel service centers, manufactures, and fabricators. Subsidiary Harris Steel fabricates rebar for highways and bridges and other construction projects. Its David J. Joseph Company unit processes and brokers metals, pig iron, hot briquetted iron, and direct reduced iron. In 2014 Nucor recycled 19 million tons of scrap steel.

Nucor at a Crossroads Case Analysis In 1986, three distinct segments defined the U.S. steel industry; integrated steel mills, mini-mills, and specialty steel makers. The integrated mills have the capacity to produce a maximum of 107 million tons of steel per year, mini-mills produced a maximum of 21 million tons of capacity a year, and the nation’s specialty steel makers could produce a maximum capacity of 5 million tons of stainless and specialty grades of steel. This leads to a total capacity of 133 million tons of production per year. In 1986, the market consumed only 70 million tons of steel, leaving 33 million tons unused. Nucor is at a crossroads. It faces a saturated market suffering from significant overcapacity. Nucor’s