Nucor Case Analysis

Nucor Case Analysis

Case summary:

Nucor is the world's largest recycler, recycling over 10 million tons of scrap steel annually. Nucor descended from auto manufacturer Ransom E. Olds, who founded Oldsmobile. The company evolved into the Nuclear Corporation of America, which was involved in the nuclear instrument and electronics business in the 50's and early 60's. Over the next five years, Valley Sheet Metal, Vulcraft Corporation and U.S. Semi-conductor Products joined the Nuclear Corporation. After suffering several money-losing years, in 1964 F. Kenneth Iverson was installed as president. Management then decided to integrate backwards into steel making, and in 1972 they adopted the name Nucor. Since then Nucor has established itself as a leader in the steel industry through efficiency and innovation. It now employs more than 7,000 people worldwide and has experienced tremendous growth under its new CEO Daniel R. DiMicco. SWOT Analysis Strengths * Low Cost Producer * Employee/Managerial Relations Leading Innovator * Low Debt Load * Overall industry leader Weaknesses Dependency on scrap metal

Company Profile

- Nucor Corporation is the largest steel producer in the United States and had net sales of $11.3 billion in 2004.

-Nucor's origins are with auto manufacturer Ransom E. Olds, who founded Oldsmobile and then Reo Motor Cars.

-The reorganization resulted in restructuring and eliminating money-losing businesses which left only the steel joist business called Vulcraft

-Vulcraft operated in Florence, South Carolina and Norfolk, Nebraska

-Management then decided to integrate backwards into steelmaking by building its first steel mill in Darlington, South Carolina in 1968

-In 1972 the company adopted the name Nucor Corporation

-By 1985 Nucor was the seventh largest steel company

Situational Analysis

General External Environment

 Sociocultural

- Nonunion workers got paid more than 85% of the states they worked in

-Recycled more than 10 millions tons of scrap metal annually

 Technological

-Began using a twin shell electric furnace to increase production and lower costs and increase market share

-Developed and implemented strip casting overseas to eliminate a step in the steel making process

 Demographic

-Economic slow down in early 90's led to a decreased demand for steel

-By 1995 the steel industry was the best it was for 20 years

 Economic

-Import values decreased for all steel products from 1998 to 1999

-U.S. steel producers facing higher energy costs

 Global

-Increasingly tough environmental rules

-Cheaper imports for steel

Industry Analysis - Nucor has established itself as a leader in the steel industry through efficiency and innovation.

Industry Driving Forces of Change

 Increased demand on a global scale due to increase in manufacturing across the world, opposite in U.S.

Future trends in the Competitive Environment

 Increased competitiveness globally

Attractiveness of the External Environment

-Not many domestic competitors

Strategic Analysis of Internal Resources and Capabilities

1. Key Factors necessary for Success in the Industry (KSF)

-Reducing operating costs

2. What is Business Level Strategy?

-Technological improvements

3. What is Corporate Strategy?

-Acquisitions and international ventures

a. Resources

* Physical

-Over 22 plants

* Innovation

-Forefront of new technologies with great investments in R & D

* Reputation

-Good reputation as a long standing corporation since the 60's

* Agility / Flexibility

-Flexible

...