Nucor 2005

Nucor 2005

  • Submitted By: Jelizaveta
  • Date Submitted: 12/08/2008 4:19 AM
  • Category: Business
  • Words: 577
  • Page: 3
  • Views: 1239

Main Issues and problems

There are several problems that Nucor is facing, although generally Company is performing very well. Among most important problem symptoms that could be found in market are – 1) worldwide decrease in demand for steel and steel related products 2) foreign companies with few markets abroad were dumping steel in local market 3) high environmental concerns about clean air rules 4) many marginal competitors in the steel industry.
Another issue is that steel makers around the world were monitoring the development of continuous strip casting technologies, which have to change steel environment a little bit. Taking into consideration all above mentioned Nucor Company main problem is to choose the right development strategy in order to keep going Nucor earnings growth, profitability and reach the goal of becoming a market leader in every steel product group and business in which they compete. Additionally to that it is important to mention, that Company have faced organizational changes. In year 2001 Nucor have made its first acquisition, purchasing a mini-mill in New-York from Sumitomo Corp.

Alternatives
First alternative - low-cost leadership strategy
First profitable option for the Nucor could be of choosing low-cost leadership strategy. Continue to optimize existing operations with the primary goal to increase efficiency and lower costs relative to its competitors. Choosing this strategy the main source for competitive advantage should be low-cost and efficiency.

Cons:
• it is easy to copy low cost methods: many of competitors had copied Nucor’s mini-mill production processes
• increased customer wishes for added quality and service features
• steel is very high-tech industry – in order to be profitable, new technologies should be recognized and implemented Pros:
• price competition among competitors is dominant competitive force
• to gain an image of lowest cost producer in the industry
• possibility to charge a lower...

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