Nucor: From Iron And Steel Manufacturer To Recycling Giant

Background

Nucor is one of the largest steel manufacturers in the world and is currently ranked as the 14^th largest steel company in the world. The company is valued to be the largest iron and steel manufacturer in North America. The company in due time has become one of the largest recycler of the iron and steel. From the different analysis it can be seen that the organization is constantly developing and has gradually consolidated its position in the market. The different aspects relating to the rise of the company is affected by a number of factors relating to the different market scenarios faced by the corporation.  The different situations affecting the different scenarios is under the consideration for the analysis of macro environmental and macro environmental factors. One of the major issues is the pollution mitigation during the process.  

The different situations faced by the organization in the market is majorly due to the different situations faced by the organization in the different market scenarios. The growing competition in the US market along with the slow growth rate of the market poses a major threat to the different marketing scenarios in the country. The market situations leading to the different problems of the country shows in the cash flow statement showing a considerable decline in the different income factors affecting the growth and development in the organizations. The macro environmental analysis of the different market scenarios in the organizations leads to common belief that the performance of the organization is greatly affected by the overall situation in the country. The different analysis of the forces affecting the market of the Nucor leads to the understanding of the common factor that they take in consideration while analyzing the different factors affecting their growth in the overall market. The development of the different market scenarios in the iron and steel sector along with the different situations faced due to the Macro environmental effects in the markets lead to the different situations that affect the overall market of the organization. The different market analysis helps in understanding the different aspects relating to the different scenarios faced by the organization. The different market competition faced by the large number of competing factors relating to the market scenarios and the international players entering the market has a great impact on the overall interaction of the market. The different innovations in organization plays an important role in the organization which leads to major development in the market. The different factors affecting the growth of the company is directly dependent on the different strategic factors deployed by the company as the globalization has a major role to play in the different factors relating to the steel market. The different factors relating to the success of the company in the global market is affected by the various determinants which affect the growth and development of the different of the industry.

Market Scenarios and Factors Affecting Growth and Development

The company has a large number of assets in the term of the investment in the different factors relating to the market and the development of the factories by the installation of the different machineries. One of the major factors affecting the overall development of the company is the market relations and the relationship of the company with the market. Nucor needs to proceed with advancement and spotlight on incorporating more with providers in the residential market to fight off contenders, and increment the obstruction of passage into this market. The organization additionally needs to proceed with development and influence its assembling to process significantly more effective to check the modest Chinese steel. Nucor needs to grow to different markets utilizing the better innovation, yet less expensive work to rapidly pick up piece of the overall industry in the worldwide market. Its administration structure and lucidity ought to likewise be copied in these different markets. Nucor likewise needs to secure its household advertise such that new contenders will have a high obstruction of passage. Nucor can keep on doing this, by getting remarkable manages its providers to improve rates and make it harder for its rivals. From the financial analysis of the company in the appendix chapter 8 it is evident that the organization is functioning in profit and has a good equity rate and increasing profits. To counteract the inflation in the iron and steel market in the country it has enough liquid cash reserve and the fact of using the recycled metal in its production process helps the cause of the organization. The different situations that may present themselves can be countered by the organization as it is an industry which is in the mature stage (Chapter 7) and can sustain its growth in the adversity. Still in the case of a prolonged issue in the market the company has to look for alternative and sustainable measure of survival in the market.

Nucor is the leading steel industry in U.S. however; some alternatives in the business relating to few issues that the company faces in the market would ensure greater progress of it. Some of them have been discussed in the following- 

One of the major challenges that Nucor is facing is related to the cost. Nucor has been facing competitive pressures in the market and checking its costs to deal with the slow growing market. The company thus needs to work hard to integrate vertically. In order to proceed with its business, Nucor has been working on building direct reduced iron plants (DRI). Working on natural gas would also be beneficial for the company to incur lower costs and progress in the business. One of the major alternatives that Nucor should focus on to increase their acceptance as the leading iron and steel manufacturer around the world is by culturing themselves to the globalization. This should be achieved in the case by using the different marketing strategies by Nucor so that their market share increases. The iron and steel market of the world is on the decline due to the gradual inflation. This creates one of the major issues which must be mitigated by the exploitation of the market by the developing countries around the world such as the African countries. 

Alternative Strategies for Greater Progress

Since the U.S market and markets in the global scenario have low barriers to the entry of firms, there has been over supply of the products. Domestic steelmakers are already disrupted with the low prices steel imports in the U.S market. Thus, price has been a key issue for the business. It has been claimed that imports are being sold at prices that are lower than the costs of production. Thus, there must b regulation from the government to stabilize the situation. The company must forecast the issue until the over capacity issue is resolved in U.S as well as the global market.

There has been a downturn in the U.S economy which has been showing a very slow growth. Thus, it would b very beneficial for Nucor to buy assets in these situations and later expand the industry when the U.S. steel market condition improves. Apart from this, the company can expand its market to the various other global markets like the way it has been expanding in Mexico and Canada.  

Having a detailed analysis of the company with an elaborate idea about the strengths, weaknesses, opportunities and threats as well as the macro environmental analysis some recommendations that can be rendered are: 

The company can strive to build long term relationship with its customers. By understanding their business and product and well strategized business roadmaps they can integrate better communication with the customers that would enable it to be more progressive in the business.

The company must also try to reduce the impact of cyclical demand. A continuous change in demand can ultimately bring loss to the company. Thus, it must produce in a way to have the minimal effects of cyclical demand’s impacts.

The company should also identify those products that must be eliminated having no demand in the market. Sales services must focus more on the customer needs and expectations. That would enable the company to sustain its business in the long term.

The company must also try to expand its business and have the global presence with local partners from the regions of Asia, Europe and South America with countries like India, Brazil and China that would aid it to have a better market in the future.

The company should focus on developing their potential and inclusion of the better and improved type of industrial factors such as the inclusion of industry 4.0 in the organization for the overall development of better manufacturing and development in the country.

Recommendations for Sustainable Survival

The new and improvised methods of operation and the management of work force should be adopted such that the different operations that are performed in the organization are better managed and well supervised.

To gain a competitive advantage in the society the better automated and cost effective methodologies should be adopted in the different scenarios which will help in the overall improvement of the different operational procedures in the organization which will help in the overall development of the organization.  

External Analysis 

• PESTEL
  • Political
• The corporation mainly operates in the field of Steel and Iron in a number of countries therefore the Political factors of those countries play an important role in shaping the business outcome of the company.
• The particular country’s political attitude towards this particular sector and the present stability of this industry must be considered.
• Tariffs imposed cause political pressures on the manufacturers of steel. In March 2002, the Bush administration-imposed tariffs of up to 30 percent on imports of select steel products to help provide relief from Asian and European companies dumping steel in the United States at ultra-low price 

• Economic

• The steel industry is cyclical and is affected by the performance of some of the industries it is surrounded by such as energy and automotive industries.
• In 2009 and beginning of 2010, “the steel industry in the US was in midst of a deep economic downtown and the demand for steel was unusually weak.” [Nucor Corporation in 2014, C-217].
• The market price of each particular steel product being driven by demand-supply conditions for that product.
• The economic recession that took place towards the end of 1990 affected Asia and Europe and reached the US in 2000-2001.
• In 2001, terrorist attacks weakened steel purchases by such major steel-consuming industries as construction, automobiles, and farm equipment.  

• Social

• Technological

• Electric and furnace technology was particularly appealing because the labor and capital requirements for melting steel scrap and producing crude steel were far lower than those at conventional integrated steel [C221] 

• Environmental

• Largest recycler in North America depending on scrap metal. 

• Legal

• The legal challenges the steel industry face are….
• Anti-dumping law
• Sox Act 

• Strategic Implications

The corporation mainly operates in the field of Steel and Iron in a number of countries therefore the Political factors of those countries play an important role in shaping the business outcome of the company. The particular country’s political attitude towards this particular sector and the present stability of this industry must be considered. The amount of corruption in the bureaucratic level for providing the registrations and allowing the procurement of the raw materials, in this case iron ore, are also to be considered when PESTEL analysis is done. The taxation of the land which is one of the features to be considered before pricing is done of the final product, that is the finished steel and iron. The employee benefits must be designed according to the work laws of the particular country in which the company is operating in.

The dominant economic features analysis includes various market factors and the scope of the industry to run in a particular business environment. 

• NUCOR operates in a market which is quite large in size. The total worldwide revenues of the steel market in  2013 was $ 19.1 billion. Apart from North America the largest sellers of Iron and steel include China, India and Japan.
• The construction industry is ever increasing throughout the world and all the construction units needs steady supply of iron and steel.

• The entry barrier in the market is quite strong because it needs a huge capital for the companies to start a business in the field of iron and steel.  

Nucor focusses on the low cost production and the usage of the better method of production to cut cost and increase production in the process. one of the major innovations that the company implemented was the relationship between the employees and the employers with increasing base rates of wages for the employees along with extra bonuses. Nucor used the electric arc furnace technology to make its product which were better suited for the growth and development of the organization.

• There are a number of top competitors who pose a threat of taking over the business, these competitors are Arcelor Mittal, POSCO, Nippon Steel and Sumitomo Metal Corp, China Steel Corp and similar big companies.
• Top 3 companies –  1) ArcelorMittal; 2) Nippon Japan 3) Heitei Steel Group [C241] 

• The different competitors in the makes the company adopt a cost cutting strategy and provide products in the market at a price much lower than their competitors. Additionally they can take on the differentiation strategy which includes application of different mythologies to mark the product more accessible and more client focussed 

• In the case of this industry the threat of new entrants is low because the requirement of capital to enter the business is considerably high. However, even if new entrants are entering the market innovations can keep the company ahead of competition.
• Lack of product differentiation
• Minimal access to raw materials 

• This threat is lesser in all other sectors except this sector, because there is less substitute for steel or iron.  
• Demand for steel and its products is relatively high 

• There are a smaller number of suppliers in this field hence the large suppliers often take monopoly of the market. Therefore, the bargaining power can be tackled by building efficient supply chain system.
• The high competition forces prices to decrease 

• The commodity nature of steel products meant that the prices a company could command were governed by market demand-supply conditions that shifted more or less constantly and caused the spot market price for commodity steel to bounce around on a weekly and sometimes daily basis [C224]
• Longer term supply contracts for these items that were sometimes negotiated with customers contained clauses permitting price adjustements to reflect changes in prevailing raw material costs. Steel joists, girders, and deck were manufactured to customers specifications and shipped immediately. [c225]
• The buyers bargaining can be addressed by increasing the number of customers across the countries 

• The threat from this factor is considerably high as there are many existing companies that are competing.  
• More than 20 rivals
• The commodity nature of steel products forced steel producers to be very price competitive in the US market and the competitive pricing gives a cost advantage to NUCOR[C-220]
• In 1986, imported steel fasteners accounted for 90 percent of the U.S market because U.S manufacturers were not competitive on cost and price
• The US was a surge in imports of low priced steel from foreign countries.  

The company approaches with cost effective approach in the market since in the different parts of the PORTER analysis it is seen that the industry is mainly affected by the buying power of the clients and the industry rivalry. The industry rivalry causes the organization to have competitive prices in the market to improve its stronghold and have a positive influence on the different clients in the organization. 

Demographics

The demographic factors affecting the growth and development of the organization takes into account the buying power and the industrial capabilities of the different clients of NUCOR. The buyers usually include large manufacturing firms and the construction companies who wish to gain the iron and steel products as raw materials at a low cost. The expanse of reach of the organization is gradually increasing due to the globalization and the improving market reach of the organization. 

External Analysis

The technological change and the innovation that the company has taken into account greatly affects the overall performance of the organization such as the newer and better iron and steel making methods and use of the scrap metal to cut costs. With the acquisition of Harris steel the company has increased its market reach into the fabrication process as well. The newer acquisitions also help in the implication of the technological change in the markets [C229].

The social factors have a great influence on the growth of production in NUCOR is the corporate social responsibility that the company fulfills while being a part of the market and the environment friendly approach of production of the different items in the market. The salary and incentive policy and the compensation policy of the employees also helps in ascertaining growth in production by the organization. 

The entry of the global players in the market due to globalization and the overall reduction in the various trade tariffs has made the market of iron and steel very competitive. The importers of the steel often benefit from the various subsidies given by the government on Steel rather than the local players who do not get such subsidies. Moreover the influx of the imported steel is making the market more competitive and affecting NUCOR. 

The different issues that present themselves in the different markets due to the globalization have made Nucor to take over more and more corporations in an attempt to cut costs on production and increase the overall produce from the company. Moreover they have implemented a number of innovative processes to increase production and improve the product quality while keeping the cost less. To counter the globalization processes in the market the company banks on the cost effective approach of production with proper employee engagement to meet its targets. 

Driving Forces Analysis– Globalization is one of the primary driving forces in this industry. Increase in the scope of import and export activities helps in improving the economic scope. The next factor is product innovation. The company should bring innovation in the field of production and the design of the product. Technological changes are also important in this field to keep updated with the trends.  

By the acquisition of the different firms that produce a number of diverse steel goods Nucor has increased their scope of market reach as the acquisition is relatively easier than the new set up of new production facility. The diversification has allowed the company to reach out to a larger market with the diverse products. 

Cost Efficient Distribution

• Low cost per ton produced
• The organization uses scrap metal for the production of steel which decreases the cost of production.
• The acquisition of the diverse manufacturing units increases the production capabilities.
• The employees are given incentives based on the production increasing cost efficiency. 

In a number of different countries where Nucor markets its products it is known for its quality and cost efficiency which has helped the organization to achieve an overall increased share in the market. The low cost also makes it a preferred brand for a number of organizations around the world.

The KSF analysis of the organization helps in understanding the different factors affecting the growth and development of the organization such that the market reach of the company is increasing and the overall stability is achieved in the operations of the organization. The international operations along with the effective employment policies in the market helps the company in increasing the overall performance.

Key Success factors analysis—The Key Success factors are (a) Strategic Focus, in which the management and planning of the company is analyzed, in the case of NUCOR the previous leadership was changed because it was not strong enough. (b) People, or the employees and the company has a huge and dedicated employee base. (c) Operations, the company operates in multiple countries. (d) Marketing, the company spends large sum in marketing to keep ahead of the competitors. (d)Finance, the company has assets and equipment’s which are worth million dollars. 

The different efficiencies of the Nucor group depend on the cost efficiency and the low cost approach of the products in the market. One of the major factors affecting the overall market share of the products is the cost. The other steel companies have a better brand value and are economically independent but Nucor has its own diversified appeal in the market. 

Strategic Group Map Analysis—NUCOR has a very solid financial position in the market. However, there are several companies that are ahead of NUCOR financially, the company Arcelor Mittal is ahead in terms of market cap. POSCO is ahead as well. Below the company are Nippon Steel & Sumitomo, and China Steel Corp. 

The steel industry is considered in the mature product life cycle stage. The maturity state gives a more or less stable market to the organization and the low threat from the new entrants makes the position more consolidated in the market. The innovation tend to be reduced in the mature stage of the industry life cycle but such is not the case with Nucor which focusses on innovating and using newer and better strategies for the development of the organization in the market. 

The industry life cycle stage of the industry showing a mature stage implies that the organization has a better position in the market than as a new entrant and it has a more or less economically stable condition with a proper turnover to pay its stakeholders have cash reserves and make profit. 

Industry Life Cycle Analysis—The company has a base in a large number of countries and is strong financially in terms of business, market cap, and assets. Apart from that the product which is manufactured by this company is also having a long life cycle. The innovations that are brought into the supply chain are also having a long duration. The industry is never perishable with ever increasing demand.

The external factors greatly affect the different operations of the organization in the market. One of the major factors affecting the growth and development of a business is the infrastructural environment and the overall situational and market scenarios which in case of Nucor have favoured its growth.

The economic fit of the market with the organization greatly helps in the growth of the organization ascertaining the growth of the environment along with the different factors affecting its growth and development. The company makes profit from its cost effective approach which further aids its growth.

Company’s Ability to Make Above Average Profits

With the increasing abilities in the market and the overall increasing competitiveness Nucor still holds on its own based on the different strategies that are implemented in the organization.

The company’s competitive advantages include:

• The low cost production policy implementing cost effective approach.
• The diversification of business through acquisition.
• The use of technology and innovation for production.

8.5 Company’s Current Position in the Market

The company is currently the largest producer of steel in North America and the fourteenth largest producer of Steel globally. The current position of the company in the market is therefore consolidated. 

Financial Analysis

Can the company pay its bills?

They can pay their bills as the net cash is high and the profit margin is on the higher side.

Does the company have the capacity to raise capital?

The company has 50% equity thus making it capable to raise capital.

Do the financials provide a competitive advantage?

Since the working capital is on the higher side with annual increments, the company has competitive advantage.

What are the implications of the financials for future strategy and the execution of that strategy?

The good equity increasing revenues and the improvement in the overall performance of the organization shows that the overall performance of company is increasing and they can invest in future ventures.

How does the company perform compared to its competitors?

Compared to its different competitors the company does not have as much of the cash and revenues but it still is earning from the diversification of its products across the different markets.

What is increasing revenue, debt, costs etc.? What’s decreasing? What’s the implications?

The revenue is increasing along with the cost while the debt is gradually decreasing. This implies that the company has profitable operations and is earning through its ventures.

The increase in the revenues working capital and the stakeholder’s equity show and outstanding trend in the data. The gradual decrease in the debts is also a part of the trend. 

Is the company in a healthy or unhealthy financial position? Implications?

The company is in an overall healthy condition in the market considering the different data available from the different sources in the analysis.

The healthy condition of the organization implies that the organization is gradually becoming self-sufficient with gradual decrease in the overall debts and consolidating its position in the market.

Revenue
	Gross revenue		$81,500	$83,130	$86,455	$91,643	$98,974
	Cost of goods sold		$0	$0	$0	$0	$0
	Gross margin		$81,500	$83,130	$86,455	$91,643	$98,974
	Other revenue [source]		$0	$0	$0	$0	$0
	Interest income		$0	$0	$0	$0	$0
	Total revenue		$81,500	$83,130	$86,455	$91,643	$98,974
Operating expenses
	Sales and marketing		$71,500	$72,930	$75,847	$80,398	$86,830
	Payroll and payroll taxes		$50,000	$51,000	$53,040	$56,222	$60,720
	Depreciation		$150,500	$153,510	$156,520	$159,530	$162,540
	Maintenance, repair, and overhaul		$0	$0	$0	$0	$0
	Total operating expenses		$272,000	$277,440	$285,407	$296,150	$310,090
Operating income		($190,500)	($194,310)	($198,952)	($204,508)	($211,116)
	Interest expense on long-term debt		$0	$0	$0	$0	$0
Operating income before other items		($190,500)	($194,310)	($198,952)	($204,508)	($211,116)
	Loss (gain) on sale of assets		$0	$0	$0	$0	$0
	Other unusual expenses (income)		$0	$0	$0	$0	$0
Earnings before taxes		($190,500)	($194,310)	($198,952)	($204,508)	($211,116)
Taxes on income	30%	$0	$0	$0	$0	$0
Net income (loss)		($190,500)	($194,310)	($198,952)	($204,508)	($211,116)

Assets	Initial balance	Year 1	Year 2	Year 3	Year 4	Year 5
	Cash and short-term investments	$0	$55,500	$209,010	$365,530	$525,060	$687,600
	Accounts receivable	0	0	0	0	0	0
	Total inventory	0	0	0	0	0	0
	Prepaid expenses	0	0	0	0	0	0
	Deferred income tax	0	0	0	0	0	0
	Other current assets	0	0	0	0	0	0
	Total current assets	$0	$55,500	$209,010	$365,530	$525,060	$687,600
	Buildings	$580,000	$580,000	$580,000	$580,000	$580,000	$580,000
	Land	0	0	0	0	0	0
	Capital improvements	$                        75,000	75,000	75,000	75,000	75,000	75,000
	Machinery and equipment	$                        97,500	97,500	97,500	97,500	97,500	97,500
	Less: Accumulated depreciation expense	0	150,500	304,010	460,530	620,060	782,600
	Net property/equipment	$752,500	$602,000	$448,490	$291,970	$132,440	($30,100)
	Goodwill	$0	$0	$0	$0	$0	$0
	Deferred income tax	0	0	0	0	0	0
	Long-term investments	0	0	0	0	0	0
	Deposits	0	0	0	0	0	0
	Other long-term assets	0	0	0	0	0	0
	Total assets	$752,500	$657,500	$657,500	$657,500	$657,500	$657,500
Liabilities	Initial balance	Year 1	Year 2	Year 3	Year 4	Year 5
	Accounts payable	$65,000	$65,000	$65,000	$65,000	$65,000	$65,000
	Accrued expenses	0	0	0	0	0	0
	Notes payable/short-term debt	0	0	0	0	0	0
	Capital leases	0	0	0	0	0	0
	Other current liabilities	0	0	0	0	0	0
	Total current liabilities	$65,000	$65,000	$65,000	$65,000	$65,000	$65,000
	Long-term debt from loan payment calculator	95,000	$0	$0	$0	$0	$0
	Other long-term debt	$0	$0	$0	$0	$0	$0
	Total debt	$160,000	$65,000	$65,000	$65,000	$65,000	$65,000
	Other liabilities	0	0	0	0	0	0
	Total liabilities	$160,000	$65,000	$65,000	$65,000	$65,000	$65,000
Equity		Initial balance	Year 1	Year 2	Year 3	Year 4	Year 5
	Owner’s equity (common)	$50,000	$50,000	$50,000	$50,000	$50,000	$50,000
	Paid-in capital	0	0	0	0	0	0
	Preferred equity	0	0	0	0	0	0
	Retained earnings	0	0	0	0	0	0
	Total equity	$50,000	$50,000	$50,000	$50,000	$50,000	$50,000
	Total liabilities and equity	$210,000	$115,000	$115,000	$115,000	$115,000	$115,000

		Year 1	Year 2	Year 3	Year 4	Year 5	Total
Operating activities
	Net income	$0	$0	$0	$0	$0	$0
	Depreciation	$150,500	$153,510	$156,520	$159,530	$162,540	$782,600
	Accounts receivable	$0	$0	$0	$0	$0	$0
	Inventories	$0	$0	$0	$0	$0	$0
	Accounts payable	$0	$0	$0	$0	$0	$0
	Amortization	0	0	$0	$0	$0	$0
	Other liabilities	0	0	$0	$0	$0	$0
	Other operating cash flow items	0	0	$0	$0	$0	$0
	Total operating activities	$150,500	$153,510	$156,520	$159,530	$162,540	$782,600
							$0
Investing activities						$0
	Capital expenditures	$0	$0	$0	$0	$0	$0
	Acquisition of business	0	0	0	0	0	$0
	Sale of fixed assets	$0	$0	$0	$0	$0	$0
	Other investing cash flow items	0	0	0	0	0	$0
	Total investing activities	$0	$0	$0	$0	$0	$0
Financing activities
	Long-term debt/financing	($95,000)	$0	$0	$0	$0	($95,000)
	Preferred stock	0	0	0	0	0	0
	Total cash dividends paid	0	0	0	0	0	0
	Common stock	0	0	0	0	0	0
	Other financing cash flow items	0	0	0	0	0	0
	Total financing activities	($95,000)	$0	$0	$0	$0	($95,000)
Cumulative cash flow	$55,500	$153,510	$156,520	$159,530	$162,540	$687,600
Beginning cash balance	$0	$55,500	$209,010	$365,530	$525,060
Ending cash balance	$55,500	$209,010	$365,530	$525,060	$687,600

 10    How well is the company’s present strategy working?

10.1 Company’s vision, mission and objectives

Current Strategy: Constructing additional plants and acquiring other (mostly troubled) steel facilities at bargain-basement prices, enabling it to enter new product segments and offer customers a diverse variety of steel shapes and steel products [Nucor Corporation in 2014, C-217]. Nucor strategy is to continue being a low cost producer in terms of advanced technology, plant efficiency, cutting costs

Corporate Strategies

The corporate strategies of the company include

• Cost effective approach.
• Acquisition of the new organizations. 

The business Strategies of the organization include

• Job satisfaction among employees.
• Technological innovations in the processes. 

The functional strategies in the organization include

• The intervention of new and better strategies.
• The diversification of operations.

11.1 Strength · Innovative steel making technologies[C222] · Nucor’s strategy involves being an industry cost leader. Labor cost is 8% of revenue. · Leading market position in north America. Diversified and balanced product mix. [C225] · It also has a lot of measures in order to counter pollution. · The company has kept a lean and effective management system. · The company is large and operates in a variety of countries that give it an edge over other companies.

11.2 Weakness · The company is very much dependent on the domestic market of the United States. The business of the company is basically dependent on the customers of the United States government. Though the company is present in various countries however it is not yet present globally. · Dependent on outside suppliers for raw materials.

11.3 Opportunities · The company has the potential to establish joint venture initiatives with various other companies across the globe that will help it in expanding base and increase business. The company may be engaged in integrating nuclear plants vertically for low cost fuel in making steel products. · Nucor uses each economic downturn as an opportunity to grow stronger [c-219]. · Customers in South and Central America presented the most consistent opportunities for export sales, but there was growing interest from customers in Europe and other locations. [C231]

11.4 Threats · The rise in the price of raw materials of production can lead the company towards making new prices for its products which may lead towards loss of some existing customers. The Indian and Chinese steel companies that already operate may increase their productivity and scale of operations. · Depressed global demand for steel and steel products, global overcapacity in the steel industry, and fierce competition from foreign imports [c-218] · Disposing steel to US is one of the major threats Nucor is experiencing.

The innovative steel making technologies along with the low cost of production is what makes the company market its product cost effectively making it attractive for a number of different consumers in the Latin American countries. The dependence on the American continent for marketing its product is a major issue for the organization. Moreover it depends on import for the raw material and the changes in international market may wreck its policies.

Firm Infrastructure

The firm has organizational structure of four layers consisting of :

• General Manager
• Departmental Manager
• Supervisor
• Hourly Employee.

The human resource of the organization focusses on the overall growth of the organization along with the growth of the employees by providing them pay according to the productivity. 

The organization takes a great pride in the technological development in the organization which focuses on the overall development of the products in the organizations. 

The organization procure its raw material from countries like India and China.   

The inbound logistics of the  organization consists of water ways and roadways.

The organization performs its operations in the development of the different product in the organization as there is a special emphasis on the diversification and innovation.

The outbound logistics of the  organization consists of water ways and roadways.

The company basically caters to the needs of the different countries in the American region.

The customer service of the organization is good as it has great technology and communication channel at its disposal.

The different factors affecting the overall production of the organization is often the effect of the overall market scenarios and the low cost of production is dependent on the cost of raw material which may increase. Moreover the decrease in the overall market sales affect the position of the company. 

Nucors value chain (anchored in using electric arcfurnace technology to recycle scrap steel) involved far fewer production steps, far less capital investment, and considerably less labor than the value chains of companies with integrated steel mills that made crude steel from iron ore. [c223] 

Value Chain Analysis-  The company had been holding tight to its innovative production process, and although the company has kept the plant open for visit from its competitors till now other companies have not been successful in imitating its business process. The team orientation of the internal group that handles the innovation and research of the company is strong enough to handle any external visit but not disclose the formula that keeps them ahead. 

The company is relatively ahead of its competitors as far as the environmental factors and the marketing of the products in the US markets is concerned but is yet to make its impact in the international market scenario.

To make an impact in the international market the company needs to device new and better strategies to market its products to the different countries around the world considering its cheap cost of production. 

Competitive Strength Analysis—The company is competitively ahead of its competitors in terms of pollution control, domestic market of the United States and the innovative factor. The companies value chain analysis revealed that the internal team that handles innovation and technology is very competent and it keeps the company ahead of other companies in the same field. NUCOR had a history of a management failure which they handled with exchange of leadership, and it was successful in maintaining its position. 

One of the major issues that the organization faces in the market is its inability to reach out to the open international market which will exponentially increase its market.