Nucor Strategic 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.

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

In essence, we learned many important lessons. First, when the business is new and its’ future is uncertain it should not invest in large capital. Next, the business should outsource only when it is appropriate considering the risks and benefits. And most importantly, we learned that in a small business situation, the company should focus on its’ core competency in bringing value to the business and the customers.

Nucor Corporation is the largest steel producer in the United States and had net sales of $12.7 billion in 2005. Nucor is the nation 's largest recycler. In 2004, Nucor recycled approximately 17 million tons of scrap steel, with 5 million of those tons being automobiles. Nucor 's origins are with auto

Until 2009, Nucor operated in an industry which experienced significant output declines during recent decades. The U.S. steel industry was operating at capacity levels of less than 50 percent and had lost more than 50,000 jobs since 2000. Growth of the Chinese steel industry posed a serious threat for domestic steel producers (Scott, 2009). Since that time, however, the U.S. steel industry has picked up momentum in response to soaring demand by the automobile and construction industries. Steel is the preferred material by the construction industry because of its performance, strength, reliability and versatility. In addition to construction, the automobile, energy and container industries have all been responsible for increasing steel consumption (Market Research.com, 2011).

AMS has their main mission to teach, serve, compete with, and make their clientele’s ballroom dancing an epic and exultant journey. It has plans to expand to a new fifth branch location and provide new job opportunities. AMS wants to continue the same mission for their leaders and teams and make their personal and community environment with exceptional values and great expectations.

Nucor has created a company that is both internally and externally fit to the environment. The firm responds well to the driving forces of the industry and has opted to take a low-cost strategy with the relentless pursuit of innovation and strong employee productivity in order to combat the issues of the steel industry. In 2000, Nucor decided to expand its operations by acquiring new firms and new factories while continuing with its low-cost operations. The competitive strategy of Nucor has helped it become one of the leading manufacturers of steel and steel products in the United States.

The automotive industry is inherently interesting: it is massive, it is competitive, and it is expected to

Nucor Corporation (NYSE: NUE), a Fortune 300 company headquartered in Charlotte, North Carolina, is one of the largest steel producers in the United States, and the largest of the "mini-mill" operators (those using electric arc furnaces to melt scrap steel, as opposed to companies operating integrated steel works with blast furnaces). Nucor claims to be North

Nucor has many strengths that include being the largest steel producer in North America, having broad product lineup, continuous production process innovations, environment-friendly, streamlined organizational structure, incentive-based compensation system, strong relationship with employees, and having a strong financial position. Nucor manufactures a wider range of steel products, which include steel bars, sheet steel, steel plate, structural steel, steel joists, steel mesh, and fabricating steel reinforcing products. Nucor has incentives and bonuses for its employees for exceeding the standards. It does not lay off its employees, which helps them retain a strong relationship with employees. Some strengths of Nucor are valuable such as

Nucor Steel Company started as a failure of two corporations: Nuclear Consultants and Nuclear Corp. Nuclear Corp was quickly diversifying by participating in the “conglomerate” trend of the time by acquiring high-tech companies specialized in semi-conductors, radiation sensors, air-conditioning technology, and rare earth metals. In 1965,when Nuclear Corporation was the verge of bankruptcy, Ken Iverson, who was in charge of just successful division, was announced president and moved to headquarters in North Carolina. Iverson started closing down the esoteric, but non-lucrative, independent, high tech divisions and concentrated on profitable steel business. However, Nuclear Corp continued to make losses and thus; the company undergone a fourth reorganization in around 1966 with Ken Iverson becoming in charge. By 1984, the company had four steel mills and six joint plants, employing the new so called “mini-mill” technology. After the purchase of Vulcraft, Aycock replaced Iverson as Nucor’s president. The company that was verge of bankruptcy became the leader in the US Steel industry and Nucor’s management style was used as example of “Excellency”. Its success was attributed to the well-built organization design, incentive system, and management philosophy

Nucor Corporation is the largest manufacturer of steel and steel products in North America. The worldwide industry in which Nucor competes had record years of crude steel production in 2010 and 2011. Steel making capacity worldwide was approximately 2,090 million tons in 2011, resulting in a 2011 capacity utilization rate of 80 percent versus just 75 percent in 2010. The demand for steel mill products had grown 5.5 percent annually since 2000, but between 2000 and 2011 there have been periods of both strong and weak demand. Weak demand caused over supplied conditions in the steel industry worldwide and allowed Nucor to expand via acquisition.

Ferro (2015) identifies that the automotive industry is both capital and labor-intensive. This is shown through the management of costs and expenses associated with the manufacturing of vehicles (e.g., facilities, materials, parts, equipment, product development, and employment). Further, Ferro discusses that the prices of key raw materials, such as steel, can fluctuate which requires the industry to be strategically flexible.

Strategy evaluation should initiate managerial questioning of expectations and assumptions, trigger a review of objectives and values, and stimulate creativity in generating alternatives and formulating criteria of evaluation.

The Strategic fit approach to management, describes that the prospect of profitability depends largely on the firm positioning itself in an “attractive industry” the attractiveness and therefore profitability is said to depend upon how competitive the industry is, “a highly competitive industry is less attractive and less profitable than an industry where the competition is less intense.” (www.netmba.com)