Nucor Competitive Strategy

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NUCOR COMPETITIVE STRATEGY ANALYSIS CONTENTS 1. Case Profile 2. Situational Analysis 2.1 General External Environment (PESTLE model) 2.1.1 Political/Legal 2.1.2 Economic 2.1.3 Sociocultural 2.1.4 Technological 2.1.5 Environmental 2.1.6 Demographic 2.1.7 Global 2.1 Industry Analysis (Porter 5 Forces) 2.2.1 Threat of new entrants 2.2.2 Bargaining power of suppliers 2.2.3 Bargaining power of buyers 2.2.4 Threat of substitute products 2.2.5 Intensity of rivalry 2.3 Competitive Environment Analysis 2.3.1 Future objectives 2.3.2 Current strategy…show more content…
The threat is high in applications where strength is a not crucial concern but cost is (e.g. plastic, wood, synthetic materials, fiberglass); low for applications that require strength since substitute materials are just not strong enough10. Also, the many composition steel can be produced reduce the threat. 2.2.5) Intensity of rivalry. It is a highly competitive market with high exit barriers since assets are specialized, increase of mini-mill competitors taking on production of steel sheets and other steel products, stagnant demand, many global competitors, commodity-like products that minimizes switching costs and customer loyalty and excess capacity11. 2.3. Competitive Environment Analysis Nucor has grown to become the largest steelmaker in the US by tonnage2. To have a sustainable market leader position, it must continue to compete for more market share from the large, integrated steelmakers. Although Nucor is the first mover in the mini-mill sector, it must also compete against second movers. 2.3.1) Future objectives. Nucor’s primary objective is “the production of high volumes of quality, low-cost steel.”12 It has an ambitious annual earnings growth of 10-15%. Nucor’s competitors would have the same objective, but unlikely the same high annual growth. Nucor’s competitors will be less risk-taking, giving Nucor a distinct advantage since a risk-aversive approach produces lower returns. 2.3.2) Current strategy. Nucor’s strategy is cost

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