Nucor Corporation: Competing against Low-Cost Steel Imports
Week 8 Assignment
Nucor Corporation is today one of North America largest steel maker company. Although the company has a strong position in the steel market today, things have not always been as positive. According to Crafting & Executing Strategy, Nucor was first known as Nuclear Corporation of America, a company involved in the nuclear instrument and electronic business in 1950’s and early 1960’s. Facing bankruptcy, the company changed direction and decided to invest in the stable steel-joist business. The new name, Nucor Corporation, came along with the change in 1972 to break away from the nuclear image ...view middle of the document...
The strategic move Nucor took was expanding their operations so that they can reach out to more customers. The steel industry was also affected by the economic recession. It affected the total purchases made of steel because certain industries reduced their purchases and these industries were the ones with the largest consumption. This recession forced steel companies to act and many of them did measures to protect themselves from going bankrupt. New products were imported to the country as they were priced lower than most of what the local companies produced. Nucor Corporation brought down their prices to that level so that they can still be competitive. Even with the market situation they had during those years, they still found it wise to start their expansion efforts. Their actions include buying out and partnering with other local companies who were on the verge of bankruptcy (Thompson, Strickland, & Gamble, 2010).
The fast development of technology led Nucor to come up with another strategy that they could use and it was having a market advantage that would help them become a leader in the industry. This led to the development of a new technology called Castrip, an advancement of the previous technologies used for producing materials such as carbon steels, stainless, and flat-rolled because it can be customized to what the customers demand in terms of the thickness and the shape of the product. An increase in their investment also made a contribution to another strategy that they came up which was a plan that would increase efficiency and minimize their costs. With the new technology they were using, production costs were lower and plant efficiency improved. The income they generated in 2005 was used to put up their current plant in Memphis, Tennessee and Brigham City, Utah (Thompson, Strickland, and Gamble, 2010).
Nucor expanded internationally with joint venture efforts as part of another strategy they developed. Companhia Vale do Rio Doce was the first company that Nucor had a joint venture with which marked their first international effort. The following joint venture they had was together with other companies that include Chinese Shougang Corporation, Mitsubishi Corporation, and Rio Tinto Group aimed in developing the Hisment technology to be used by Rio Tinto for their West Australia branch. Next would be an expansion plan geared towards producing a product that would replace scrap steel at lower costs. Trinidad was the location for their newest site that received all their iron ores and reduced iron so that it can be shipped to the sites they had in the US (Thompson, Strickland, & Gamble, 2010).
Discuss the organizational structure and management philosophy at Nucor.
The organizational structure at Nucor includes supervisor/professional staff, department managers, general managers, and workers being paid per hour. The structure for their organization encouraged fast decision-making and application of the necessary...