NUCOR in 2005 (case summary)

Essay by pastnieceUniversity, Master'sB, October 2007

download word file, 2 pages 3.0

Symptoms:Steel industry is having one of biggest slowdowns with weak prices and rivalry bankruptcies due to both domestic and international economy slowdown.

Technological aging in US steel industry almost forced US steel makers out of business. Steel makers in other countries were developing and using technologies that allowed significantly reducing unit prices. Almost all innovations in technologies were made outside US.

Competition on Us market was tough due to low import prices (Japan, France, Luxemburg, Spain), that made to cut prices also for domestic steel producers to stay competitive. Also damping and subsidized imports were taking place to win market share. US government initially refuses to eliminate increasing amount of steel import due to international trade law, just in 2002 some restriction and quotas were placed.

Increased competition due to tendency of company expansions and tendency of global consolidations. It became evidence that companies who were previously focusing on domestic markets went international acquiring both domestic and international companies gaining market power.

In addition to cheap imports US steel industry was facing high energy prices, increasing labor costs, increasing costs for technological innovations, decreasing demand by customer industries, more tensions due to government environmental rules and changing cost structure among producers.

Problem:Even though Nucor had stable and favorable position in US market, company needs to maintain its competitive advantage to survive fierce competition and uncertain environment of the industry.

Nucor haven't reacted on overall market situation changes.

Company continues to grow with no clear strategic vision.

Due to company's size increase it might become uncontrollable due to decentralization and lack of management depth. Company missing a new layer of management to carry out strategic planning and control tools over entire company.

Alternatives:Nucor could analyze market and reconsider Nucor's strategies by leaving the old strategies as it was. Company...