Strategic Profile and Case Analysis Purpose
Nucor in 2005 deals with a leading steel manufacturer, the steel industry, and the trends that face each. Steel manufacturing is an old business, but is currently facing the fast changes associated with new technologies and the rise of globalization. The cyclical economic effect in the industry has proved challenging for many steel businesses. Nucor has unequivocally maneuvered this business cycle to maintain a positive profit margin in every quarter since 1966. The company’s philosophy of decentralized structure in the 1960’s and 1970’s was imperative, but has since required change due to current international challenges.
Section I
Strategic Issue
This case analysis will take into account the many great aspects of Nucor’s historic business model, but will primarily focus on the need for a clear strategy to expand the industry internationally.
Section II
Situation Analysis
External Analysis: P.E.S.T. Analysis
Political Factors
State, federal and international agencies all heavily regulate businesses. These laws provide the basis for successful profit margins; but also challenge the ease to which these margins are gained. Many local laws are meant to support local businesses; a business must face the local protectionist laws of another business when trying to compete in foreign territory. In no greater circumstance than at the global level does this hold true. For Nucor Corporation, ever growing international competition requires addressing many different types of laws, mainly taxation.
In every country with a centralized government, taxation is unavoidable. Variations amongst countries’ laws provide favorable and unfavorable circumstances for a large company to do business in that country. Nucor is widely involved with tax policy in the United States as they pay federal, state, and local taxes. Each greatly affects their bottom line. Additionally, Nucor must understand the taxes of other countries in which they plan to implement contracts. Taxes do not always negatively impact a business, especially when they are protectionist. These types of taxes are implemented to protect the domestic industry. This is especially important when competition is high, and a push for cost leadership exists. Nucor, as with any large company that has a global presence, is subject to international trade agreements from the WTO, NAFTA, and the EU. A company must be capable of understanding the costs associated to all regulations and tariffs on importation and exportation; this is financially imperative especially as competition and globalization are required to maintain profits in the future.
Economic Factors
In 2000, Nucor’s Daniel Di Micco stated, “Our strategy will focus on becoming a ‘Market Leader’ in every product group and business in which we compete.
A strategic plan will maximize Riordan’s resources to achieve its business objectives and maximize its value. For Riordan to have a successful strategic plan it is best for the company to perform a SWOT analysis. The first step is to identify Riordan’s strengths. Riordan Manufacturing has three operating entities located in Georgia, Michigan and California, plus a joint venture in the People's Republic of China. This allows for them to expand their reach into new markets in both domestic and foreign markets. Riordan has secured fifteen major customers, twelve minor customers, and a government contract for fans. Riordan Manufacturing has weaknesses within the company. It needs to consolidate customer information within all of its locations in order to deliver better value to the customer. Riordan needs to consolidate the close of the general ledger and the income statement and balance sheet in a more efficient and timely manner than is currently being conducted. Riordan has weaknesses in finding an inexpensive and labor friendly way in which to conduct audits. Riordan manufacturing has great potential for opportunity and growth. Riordan can reduce operating expenses, which will lead t...
Nucor is the largest steel manufacturer in the United States. It remains a profitable company despite being in one of the most cyclical industries in the economy. Nucor enjoys this success for several reasons, employee relations, quality, productivity, and aggressive pursuit of innovation and technical excellence. Nucor’s strategy is that of a low cost provider, they know they are selling a commodity and understand their competitive edge in the industry is lowering prices through innovation and productivity. The company operates primarily in two business areas, steel mills and steel products.
Nucor Corporation is constantly faced with obstacles and competition to overcome. This steel-making company whose name was formally adopted in 1972, has since been on a journey to join the ranks of the worlds leading steel companies. Although this is a highly profitable industry with a U.S. market of $94.9 billion, it is highly competitive and presents many bariers to entry. Three elements of competition in this particular industry include, 1.) Technology 2) Changes in cost and efficiencies and 3) globalization
Hoerr, J. P. (1988). And the wolf finally came : the decline of the American steel industry. Pittsburgh, PA: University of Pittsburgh Press.
Nucor started out by manufacturing steel for the beams and posts produced in company-owned structural steel manufacturing plants and then expanded by selling its low-cost steel to other firms. Outside customers gradually became the primary outlet for sales by the mini-mills. Nucor was able to expand sales from the mini-mills by keeping costs below its competitors, both in the United States and abroad. Nucor has consistently sought ways to lower costs while broadening markets. During the latter part of the 1980s, much of the company's efforts were placed on developing technology for manufacturing sheet - flat-rolled steel of the type used by automotive and appliance manufacturers - which had traditionally been the sole domain of the big steel companies and foreign competitors. Ken Iverson, former CEO of Nucor, risked several hundr...
The extraordinary power of the steel industry to shape the life of its communities and the people in them remain...
Industry Analysis – Nucor has established itself as a leader in the steel industry through efficiency and innovation.
The goal of this paper is to provide key insights and concepts from three strategy books and then begin the strategy planning process for five different products.
...k, John. "US Steelmakers in Continuing Crisis." Challenge.Vol. 47, no. 1, January/February. M. E. Sharp, INC. 2004. 86-106.
industries strive for. Government regulations are meant to help more than just the one entity; the
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The next section will illustrate the way in which separate commerce businesses function in the international legal atmosphere and to recognize any of the domestic and worldwide matters, which affect the assorted industry configuration and how those concerns can be successfully handled. Lastly, the paper will contain information about Sport Bar Franchise documents that are needed to initiate the business in the state of Maryland.
The threat of new entrants is moderately strong. Incumbents do not strongly contest entry of newcomers, but existing industry members are consistently looking to expand their geographic reach and offer a broad product assortment. Brand awareness and customer loyalty are high and greatly important i this industry.
Lastly, the company needed a long-term strategy for the company to survive the intense competition in the industry.
We intend to exploit our leadership role by continuing to target and enter segments of the communications market that we believe will experience rapid growth or grow faster than the industry as a whole....