Business Policy and Strategy-Business Policy -Assignment

   

Added on  2021-06-17

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Running head: BUSINESS STRATEGY AND POLICYBusiness strategy and policyName of the studentName of the universityAuthor note
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1BUSINESS STRATEGY AND POLICYMemorandumTo: John Ferriola From: Nick Aurther Subj: Nucor Case AnalysisDate: 05/16/2018There are number of issues and shortcomings being identified in the competitive strategyof Nucor. These negative factors should be effectively determined and overcome in order to havepositive and favorable future potentialities. Thus, in order to have effective measures forovercoming the shortcomings, it is also important to have effective strategies. Five forces analysis Threat of new entrants Threat of new entrants is low due to the reason thathuge investment is required in operating in thissector.Moreover, it is also difficult for the new entrants inthe market to match the economies of scale of theexisting firms. Threat of substitutes Threat of substitute is high for Nucor due to thereason there are number of steel mills currentlyoperating in the American market. The core offerings of all the steel mills are same andsimilar. Bargaining power of thesuppliers Barraging power of suppliers is high due to thereason that steel industries are heavily dependent onthe supply of iron ore and scrap steels. Thus, the pricing of the suppliers determines theprofitability of the steel mills.Bargaining power of thebuyers Bargaining power of the buyers is also high due to thereason that buyers are having number of options inthe industry.Majority of the buyers uses steels as raw materialsand thus they are having basic requirements that are
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2BUSINESS STRATEGY AND POLICYbeing offered by every player in the market.Competitive rivalry Presence of number of similar firms in the industryincreases the intensity of competitive rivalry.There are number of instances where steel mills areopting for mergers and acquisitions in order to gaincompetitiveness in the market. Key success factors for the industry The major key success factor for the America steel industry is the return of the majorsteel based companies in the America soil. In the recent time, there are number of strictlegislations and regulations being initiated by the government of the United States in order toreduce the rate of off shoring and outsourcing. This can help the American steel industry ingaining momentum from the increase in demand (Collard-Wexler & De Loecker, 2015). Another key success factor for the American steel industry is having the presence of bothiron ore and scrap steel based mills. This is helping the entire industry in having lowerdependency on only one type of resources. Overdependence on the iron ore only will restrict thegrowth of the industry (Melouk et al., 2013). Pros of Nucor competitive strategy One of the major advantages of Nucor’s competitive strategy is their strategic partnershipwith Encana Oil and Gas Inc. This helps them to regulate and control the volatility in the price ofthe natural gas. This also enables Nucor to ensure the seamless flow of the supply of natural gasalong with having the control over their price. Another major advantage of Nucor’s competitivestrategy is the best in the industry productivity level in the steel industry. Nucor is having non-unionized labors across all their facilities. It also helps them to gain competitive advantages inthe industry.Cons of Nucor competitive strategy
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