Problems recognized in Nucor Corporation

Strategic Profile: Background

The Nucor Metal Corporation can be an professional company headquartered in Charlotte, North Carolina. It was founded in 1897 by Ransom Eli Olds, who was an auto company who proven REO engine company when the business made the first Oldsmobile under the name "Reo Pickup truck Company". In 1995 got over a tiny nuclear services company called Nuclear Consultants, Inc. It was in 1962 F. Kenneth Iverson was hired as general manager, who was simply into mini material production. Nucor Company was called by him, and is also the largest metallic producer in the United States and nation's largest recycler. The business operates through three segments: Metallic Mills, Metal Products, and Raw Materials. They are most widely known for producing material with recycled strap metal. The product line is varied including products such as steel joists, steel bars, steel deck, wintry rolled bars, metal building systems, light measure metallic framing and structural material. Nucor Corporation handles many capital gadgets including mill stands, furnaces, and overhead cranes in nine state governments and is looked after by an efficient system making certain it performs in peak efficiency. Nucor Firm exceeded in regards to to the internal organization framework. By 2005 Nucor acquired 16 metal facilities.

Strategic Account: Objective Statement

There goal is "Look after Our Customers. " The company comprises of more than 21, 000 customers. A couple of committed to ensuring safety, finest quality, lowest cost, most productive and most profitable metallic and material products company in the world. They are committed to working together (Nucor. com).

Analysis: Problem id and case analysis

The main problem that the company has encountered for past few generations is the admittance of imported metallic. There have a demand to place analysis on product into the market from transfer steel companies. The US supervision has removed the ban many times. At present there is absolutely no ban on product dumping into the metallic market. Another problem could be the nominal management system, the four tier system proved helpful well for the business which was used for quite some time. However the new five tier system has led to the communication barriers within the segments. The main problem they experienced was strict legislation of contaminants created by the plant life and mills. They may have only faced one issue with the E. P. A therefore they have to be mindful.

The Nucor Company in america confirms it hard to maintain with the Asian manufacturers due to their lower creation costs. The company is reliable on scrap steel which is becoming scarce plus much more expensive and at the same time volatile. The lack of R&D makes the company rely on companions or suppliers to bring in new technology. Nucor being decentralized makes it difficult to coordinate among divisions in a time of buying or sales which cause doubling marketing and sales attempts rather than capitalizing the economies of scales in support of purchasing. The most important problems are to do with its domestic market. The US market is the principal customer bottom and Nucor is unable to compensate losses due to a varied location worldwide. This at present is discovered as a difficulty. The production of the big-three has considerably declined over the past 5 years and it is not near to rebounding anytime soon.

The metallic industry is cyclical which is often seen as a downfall to the business with the demand for steel fluctuating. This obstacle for Nucor can gather more costs for the company. The need to include new acquisitions will result in increase geographic locations, customer bottom part and make it harder for rivals to remain competitive. There by resulting in accumulation of increased costs, for working out and development, of employees. The competitive causes affecting Nucor Organization is numerous and the principal ones include the number of rivals, pace of technological change and market change. The amounts of competitors are declining high capital requirements and labor costs. Nucor opponents include Mittal Metallic Company, AK Steel Holding Corporation, United States Steel Corp. , Baosteel Group Firm, Corus Group Small and Corus Group Small (according to Exhibit 11). The marketplace size is reported to be shrinking due to the lot of fighting international metallic companies. The pace of technology in the material industry is fast and the business that obtains the latest technology has a competitive advantage over the other producers. Quite simply in case a company obtains new technology this allows them to create at an inexpensive then it has a big advantages in the steel industry. In Nucor Company technology has been their key talents. They have several key success factors that permit them to be a successful company. Nucor organization has qualified workers that assist in improving productivity, progress in technology and the breadth if the merchandise line that enhance the success of being one of the low cost makers.

The key strength of Nucor is the employees. The business composition has strong command throughout the hierarchy levels that permit those to make quick decisions and talk about their success and failures with each other. Dedicated workforce indicated by lower turnover (only 5%) than the industry average (10%-12%). By being risk taking and innovative they have been able to produce the best products that are of high quality and is also superior. The company took a risk when they spent a huge selection of million us dollars when adapting to the untested German process making flat metal and the business was the first to use mini mills to create flat rolled metallic.

Section IV

Identification of Opportunities and Risks and Firm Strengths and

Weaknesses (SWOT Analysis)

Strengths

Weaknesses

Strong market position -historically based

Geographical concentration

Increased production capacity

Mature Industry

Strong technical focus

Opportunities

Threats

Joint ventures

Cyclical dynamics of the industry

Inorganic Growth

Consolidation in the global material industry

Overcapacity in the global steel industry

Increasing raw material costs

Identification of Strategic Options and evaluation

The first option (A) is to look into their existing enterprise company. Are their cheaper suppliers out there in the global market? If Nucor is to bring down their production price they first need to lessen the prices of the recycleables. Since 1980 Nucor Corp. has been around jv. Now countries like Korea and china have become industrialized and Nucor has a great opportunity to capitalize on lower products. If they don't consider this they could miss a great opportunity in increasing their future business.

The second item (B) Nucor technological developments have always being the main element success element in making them nobody. To allow them to compete in the market they need to continuously improve their technology and concentrate on producing at lower production cost with high success. They must increase their result by maintaining the prevailing degrees of costs and at the same time bring more metal in to the market. Economies of level lowers the common cost per product through increased creation since fixed costs are distributed over an increased number of goods.

There are pros and cons to these options. The option A reduces the development costs and can enhance the associations with overseas countries. Will bring about profits and the potential for ground breaking methods is higher. However the drawbacks are the loss of associations with the prevailing joint ventures. For option B again this will help to lower the creation costs and boost the output. Can force the business towards expansion and bring Nucor into the top position in the U. S. But again the downsides could be the high charges for buying new technology and sometimes may not deliver the expected results. Also could be difficult to accomplish it in old mills.

In May 2008, Nucor also declared two joint projects overseas to capitalize on growing construction markets beyond your U. S.

Recommendation

As an outside analyst, I think should give attention to several strategic elements. The first tool is market development. Nucor is merely concentrating on the U. S market and aren't expanding internationally. This can be one of the main element steps in competing with the rivals. They can increase to emerging regions such as India, Brazil, China and Russia through acquisitions, mergers and joint ventures. Nucor Corp. can reap the benefits of low creation costs and at the same time be near the growing markets.

To give attention to product development, anticipated to strong competition in the market continuous product development is vital. This can be done through long term relationships with customers this assists in

a. Reduced amount of cyclical demand and possibilities of customers switching to other suppliers (manufacturers).

b. Determine products to be taken away from our offering.

c. Tailor our pre- and after sales services based on customers' need and objectives.

They need to recreate the organic and natural hierarchy which helps Nucor to keep the communication channels short in order to make decisive quick decisions exactly like when they began. The option A as suggested by the company would be the best way to bring in fast and effective way and to revolutionize the metal industry. There will be minimal costs included. Because the prices of raw materials decrease the production costs will decrease. They will also be able to increase their global reach through partnering with a company of a developing nation. They will be able to experience a important thing net gain. Nucor Corp. should be able to see the important thing profits which are greater than a minimal increase.

A company such as Nucor which includes development, strong autonomy and creative imagination as their critical success factors won't find it hard to survive. But survival is not guaranteed when there is no ongoing reshaping the business's position. Therefore it is easy to see large companies become obsolete.

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