Case Analysis of Nucor Corporation in the Steel Industry

This case analysis examines the strategic placement of Nucor Corporation in the steel industry. It discusses the external environmental factors impacting the firm, financial environment, and industrial forces. The study assesses the overall achievements of the firm and analyzes the manner in which the organization can emerge as a winner in the long run. Read more at Desklib.

Running head: CASE ANALYSIS
CASE ANALYSIS
Name of the Student
Name of the University
Author Note

CASE ANALYSIS
Table of Contents
Introduction......................................................................................................................................3
1. Company..................................................................................................................................3
2. Objectives.................................................................................................................................4
3. Macro environment analysis....................................................................................................5
4. Competitive five forces............................................................................................................8
5. Driving forces in the Industry..................................................................................................9
6. Understanding how Industry Rivals are positioned in the Market that the Company Operates
In....................................................................................................................................................11
7. Key Success Factors of the Global Steel Industry.....................................................................14
7.1. Proximity to Markets and Inputs........................................................................................14
7.2. Diverse Range of Products.................................................................................................14
7.3. Access to Low Priced Raw Materials.................................................................................15
7.4. Financial Structure..............................................................................................................15
7.5. Assessing the KSF of the Industry using the Framework of KSF Weight Assessment.....15
8. Understanding whether the Outlook of the Industry offers Nucor Corporation with Sufficient
Opportunity for Growth and Profitability......................................................................................16
9. Financial health of the firm........................................................................................................19
10. Analyzing the Competitively Important Resources and Capabilities of Nucor Corporation. .21

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11. Understanding whether the Costs and Prices of Nucor Corporation are Competitive with
those of its Key Rivals, and whether or not it offers Attractive Customer Value Proposition......23
12. Evaluation of Nucor Corporations Competitive Situation.......................................................26
13. Generic strategy.......................................................................................................................27
14. SWOT Analysis.......................................................................................................................28
15. Assessing the strategy..............................................................................................................29
Conclusion.....................................................................................................................................30
References......................................................................................................................................32

CASE ANALYSIS
Introduction
As the business environment is largely competitive in nature, it becomes essentially
crucial for the different business as present in this critical environment to ensure that they are
successfully being able to formulate strategies which would then assist them in surviving in this
competitive business environment (Arthur et al., 2019). Therefore, in regard to this, it is critical
to assess that, strategic management forms an integral part of the study and if a firm engages in
relative strategic management strategies then in such a case, they will successfully be able to
gain a competitive advantage in the long run. In regard to this, the focus of the study lies to
examine the manner in which the different ways in which a firm is performing in the external
environment and to assess its various growth and competitive strategies which it has been
applying in order to assure that it is being able to gain a competitive edge (Doppelt, 2017).
Therefore, the main aim of the study is to examine the manner in which the company Nucor has
been strategically placed in the business environment. The study will examine the manner in
which the firm has performed up till now by discussing the overall vision, mission and the
overall background of the study. This will then be followed by the manner in which the external
environmental factors have been impacting the different operations of the firm. This will then be
followed by the financial environment of the firm along with the different industrial forces which
have been affecting the organization. The overall achievements of the firm will be assessed and
this will be followed by the analysis of the manner in which the organization will be able to
emerge as a Winner in the long run.
1. Company
About Nucor
The Nucor Corporation can be understood to be an American producer of steel and other
similar products which has its headquarters in the Charlotte in North Carolina. The firm is the
largest producer of steel in the United States and has the largest mini mill furnaces or the
steelmaker (Nucor.com ,2019). The firm has the capability of being the largest recycler of
materials and has recycled 16.9 million tons of scrap in the year 2015. The organization has

CASE ANALYSIS
appeared in 2008 Fortune 500 companies listing. The company aims to perform in the best
manner in the given industry.
Mission
The mission of the firm is as follows:
1. The firm aims to become one of the largest steel producers around the globe.
2. It aims to survive with the help of higher quality products and lowest costs
3. The aim to maintain the environmental standards as high as possible.
Vision
The vision of the firm is to look out for the customers. Hence, by this vision, the firm can
be understood to be a customer centric organization.
Values
The values of the firm comprise of the following aspects:
 Cultural and environmental stewardess in communities
 Meeting the needs of the customers
 Meeting with the needs of the different teammates
 Engaging in quality operations.
2. Objectives
Organizational objectives
The organizational objectives which the firm has set out for it are as follows:
 To become a leader in the market they compete in
 To move up the value chain To expand the channels
Financial Objectives
The financial objectives of the firm are as follows:

CASE ANALYSIS
 To implement ten growth initiatives of a value of $3.5 billion
 To substantiate growth opportunities of the organization by 20% in the coming few years
of operations To provide higher revenues to the customers and shareholders.
3. Macro environment analysis
As the external environment of the firm can be understod to be very dynamic in nature, it
becomes critically important for all the firms present in the industry to ensure that they are being
able to meet with the needs of the various businesses and are being able to ensure that the
strategies can be formulated in regard to these strategies (Arthur et al., 2019). Hence, the
PESTLE analysis can be taken to be a comprehenive tool which can be utilised by the different
business in order to ensure that they are being able to assess the different forces which lie in the
external environment of the firm. Additionally, the PESTLE also assists in determining the
overall thereats and opportunities which lie in the extenral envronment. These factors of the
PESTLE have a very strong influence on the overall functioning of the organization (Hashim,
2017). As the external environment is considered to be very dynamic in nature, the factors which
are present in the external environment keep changing. The forces do not lie in the control of the
managers of the organization and hence analyzing them and preparing them in in the long run is
important. Hence in this section the PESTLE has been selected as the appropriate tool in order to
measure the way in which the firm will be able to deal with different underlying forces lying in
the macro environment of the organization.
Political factors-STRONG IMPACT
The political factors can be understood to be the government related factors regarding the
law and policy governing the organizations. The corporation has faced various political factors at
the time when the administration was under Clinton. It has faced increased competition from
countries like Taiwan, Italy, Belgium, Canada and South Africa who are dumping stainless steel
in the United States (Arthur et al., 2019). The governments of these countries specifically
accelerated the dumping by giving their steel producers large subsidies in order to ensure that
they are being able to compensate for the losses which these companies and additional cost for

CASE ANALYSIS
their operations in the United States. Hence in regard to this it can be rightfully mentioned that
the political factors have a very critical role to play and hence anti-competitive and trade
practices affect the overall revenue earning capability of the organization (Miller and William
Mauldin , 2016). However it can be stated that currently the US government has become very
strict about and therefore it is regulating the overall manner in which there has been a market
share loss of the domestic company and how it can compete with the foreign competitors who
provide low priced steel in the country of United States.
Economic factors-STRONG IMPACT
The organization has been affected by various losses due to decrease sales in the times of
the economic downfall. Currently the global markets have been experiencing an economic
slowdown and this has impacted the steel industry to a great extent. In the past as in years during
the 2001 financial crisis, the 2007 and 2008 recession and other such economic events which
have taken place around the globe but mostly centered in United States has also affected the
operations of the organization and has an effect on the overall average profits for the years to
come (Ansoff et al., 2018). The foreign exchange rates and interest rates which keep fluctuating
around the globe have also affected the firm negatively. The governments have tried to;
manipulate the rates so as to ensure that they are being able to attain large number of profit for
the Nucor Corporation.
The social cultural factors-MODERATE IMPACT
Social cultural factors can be determined as those factors which affect the target audience
and thereby impact the overall sales of the organization. The population growth which has been
taking place around the globe can be understood to be one of the factors related to this aspect. As
the infrastructure industry is blooming, the need for steel has increased to a great extent and this
this helps to boost the sales volume for the organization. Hence in regard to this it can be
considered important to note that the different consumers will be willing to invest in the steel and
hence the market for the corporation seems largely suitable. Hence the Nucor Corporation can
aim to become a leader in this market segment and ensure that it is being able to engage in

CASE ANALYSIS
advance technological operations which will support the environment and thereby gain the trust
of the audience (Ansoff et al., 2018).
The technological factors-STRONG IMPACT
As the technology has been advancing to a great extent, any business enterprise needs to
see to it that it is successfully able to meet with the needs of the target audience by providing
them with the most advanced technologically developed products. The technological advances
which lie within the steel industry have an impact on the efficiency of the company operations
and their operations (Arthur et al., 2019). In this case, the Nucor has been and early adopter and
aggressive investor and the technology has been undertaken this initiative as a part of its
operations which has helped to disrupt the effects of the competitors and it has taken over the
market and has made it difficult for the competitors to engage in competition against the firm. In
terms of the technological advancements and investment, this has provided an edge to the firm
by providing improved quality along with lowering prices.
The environmental factors-MODERATE IMPACT
Environmental factors can be considered to be those factors which will lead to the
ecological balance of the environment (Hitt, & Duane Ireland, 2017). This aspect really affects
organization with the new mantra of going green and the harmful effects of climate change and
the environment. Hence the various factors have tried to put a stop to the different ways in which
the steel is manufactured. However the corporation has ensured that has been able to adopt eco-
friendly ways and thereby abide by this external factor.
The legal factors-MODERATE IMPACT
The legal factors can be considered to be those factors which will deal with the regulatory
commitment of the organization. As the company is a leader in environmental friendly products
and has been following all the requirements of reducing the waste and recycling the use of
energy, Nucor has made considerable investment in improving the emissions as well. Hence any
regulation which is generally imposed by the government on the organization would be made by
the firm because it needs to ensure that all their operations are legal in nature and all regulatory

CASE ANALYSIS
filings are being followed successfully (Lasserre, 2017). This impacts their productivity and
profitability along with the brand image of the form in a positive manner.
4. Competitive five forces
All businesses operate in a competitive environment and in order to ensure success it is
critical that the different organizations are able to understand the different forces which are
present in their industry and can combat against the competition which takes place within the
firm (Ginter, Duncan & Swayne, 2018). Hence in this section the Michael porters five forces
competitive model has been made use of in order to examine the corporation’s industrial
environment and competitive capabilities. In this model the five forces which are generally
examined are the threat of new entrants, the threat of substitute products, the competitive rivalry,
bargaining power of the consumers and the bargaining power of suppliers. Hence in this section
the corporation’s competitive capability in the steel industry will be examined.
Threat of new entrants- Low
The industry typically has to worry about the threat of new supplies in the market
however this in case of the Nucor, in steel industry, this threat is very low because of the cost of
investment in the industry is very high (Noe et al., 2017). The seed industry all around the globe
and even in the States comprises of a few well-planned companies who have been in the industry
for a long time and hence the new firms often find it extremely difficult to take up this position
due to the required amount to managerial experience, distribution channel, capital, brand name
and other production capabilities required to incur to match with existing organizations.
The threat of substitute products-HIGH
Although various substitutes of steel are available in the market, however the quality of
steel cannot be matched with other products such as plastic or fiber. The corporations are aware
of the need for high quality products and hence they are trying their level best to integrate the
manufacturing of steel with the changing needs of the business to meet the customer expectations
and lure them to purchase the value added products which are intended to save the planet
(Meyer, Neck & Meeks, 2017). The organization also eliminates the risk of the substitute

CASE ANALYSIS
products by offering better goods at cheaper prices at higher demand and hence the offerings
help them to meet the efforts of the competitive companies offering the substitute products.
The bargaining power of suppliers-MODERATE
The Power of the supplier can be understood to be moderate in nature. The suppliers of
the corporation have been in a relationship with the organization for a long time and hence there
is substantial effect on the operations of the firm on the suppliers (Morden, 2016). As the
organization purchases large amount of Raw material from these suppliers, the power of the
suppliers tends to go down (Morschett, Schramm-Klein & Zentes, 2015). Scrap prices also affect
their relationship with the suppliers and they are usually driven by the market demand and hence
very often this makes it difficult for the company to produce steel because of the prevailing
market price.
The bargaining of the buyers-HIGH
The buyers form a key part of the industry and hence, their power can be understood to
be quite high in nature. As the quality and pricing aspects of the products are important to the
buyers, they often switch between different suppliers (Morschett, Schramm-Klein & Zentes,
2015). Hence, it is in relation to this that the different firms get into an association with the
different buyers through a contract which helps them to continue their relationship with them for
a longer time frame.
The competitive rivalry- LOW
The industry in which the Nucor Operates, can be understood to have few competitors as
the cost of investing in the industry can be considered to be very high. This means that all the
moves of the organization go noticed and with respect to this, price wars and other competitive
initiatives can be understood to be a common part of the industry. A positive industry growth can
be understood to create a positive competition. The exit barriers in the industries can also be
understood to be very high and all competitors in the steel industry tend to apply diverse
strategies.

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5. Driving forces in the Industry
All the industries which are present are generally driven by certain forces or the factors
which tend to determine the manner in which the business generally tends to perform. The trends
and forces tend to require a strategic response from the various participating firms. All the
indistries generally go through various life cylce changes and hence, it can be considered
relevant for them to see to it that they make considerable strategies in order to see to it that they
can combat against the different strategic forces which are present (Arthur et al., 2019). The
various participators in the industry determine the level of competition, the pricing components
and other features. These forces help in eithe asssiting the forces in the industry or forming a
barrier in front of them which hinders their overall progress.
The driving forces of the Steel industry can be understood to be as follows:
 The changing technological landscape: The technological environment has been changing
and altering to a great extent and in regard of this, it is very crucial for the Nucor to
ensure that it is being able to abide by this technology and that it is being able to match to
the demands and capabilities which tend to exist in the market.
 Presence of competition: The presence of the competition which exists in the industry can
also be considered to be an important factor which affects the forces in the industry
(Morschett, Schramm-Klein & Zentes, 2015). When the numbers of competitors who are
present in the firm are very high, in such a case, it tends to create a pressure on the
different firms and this leads to an increased level of competitive rivalry and other price
wars which in return can be understood to have the capability of affecting the overall
operations of the organization.
 Availability of substitutes: When the number of substitutes of a product increases then in
such a scenario, the steel industry firms suffer a great loss. In relation to this, it can be
rightfully mentioned that, as the number of competitors of the steel industry have been
increasing to a great extent and the substitutes such as plastic and fiber have become
increasingly popular, the steel industry has suffered a blow and hence, initiatives are
being undertaken to manage the supply and demand

CASE ANALYSIS
 Demand from associated industries: Steel as an industry does not function and is greatly
affected by the performance of the other industries as well. In regard to this, it needs to be
noted that, when the demand from these supply chain companies increase, then the steel
industry flourishes (Trigeorgis & Reuer, 2017). For instance, as the demand in the Car
industry has been going down, this has greatly affected the overall operations of the steel
industry as well.
 Change in Industry growth level: The growth level of any industry does not remain the
same and in such an instance, it is crucial to consider that the change in the Industry
growth level tends to change the extent of operations which are present in the industry. In
relation to this, it can be mentioned that, as it has been predicted that the industry will
grow by 2%, it is expected that this shall affect the overall operations of the industry.
Industrial Analysis
The steel industry has been able to flourish in the past few years due to the massive
development of the different industries and the organizations like the Nucor Steel, Tata steel and
other popular countries which are present. In the United States the industry employs over 1,
50,000 employees directly and hence, can be considered to be an integral part of the economy of
the country. As the infrastructure industry has grown to a great extent, this has led to an outbreak
of the demand of steel and hence, the firms with the steel manufacturing operations have become
even more popular (Arthur et al., 2019). Steel is a recycled material and can be therefore, taken
to is one of the most sought after raw materials. Just like the different countries around the globe,
even the United States has grown considerably in this regard and the consumption of steel in the
country along with its production has increased to a great extent. As the industry has been
undergoing a revival, it can be mentioned that after getting bankrupt in 1965, even Nucor
Corporations was able to experience a profound growth in the overall operations of the firm
(Trigeorgis & Reuer, 2017).

CASE ANALYSIS
6. Understanding how Industry Rivals are positioned in the Market that the Company
Operates In
It is important to take note of the fact that industry rivals are very strongly
positioned in the market that Nucor Corporation operates in, which is the market for iron
and steel. Two of the company’s biggest rivals are US Steel and Arcelor Mittal USA.
Arcelor Mittal USA has been operating as many as twenty seven operational facilities in the year
of 2016, out of which six are electric arc furnace plants, four are large and well integrated steel
mills, and four of these are rolling as well as finishing plants. The product lineup of the Arcelor
Mittal USA Company includes cold rolled and hot rolled steel sheets, steel bars, steel plates, wire
rods of a high quality, tubular steel, tin mill products and structural steel (based on the given case
study). The majority of the production that this company is seen to engage in, is sold to
customers that are situated in sectors such as agriculture, the automotive sector, highway
operations, steel service centers, companies that are involved in the manufacture of office
furniture and also the railway sector. Additionally, sectors dealing with industrial machinery,
packaging, electrical motors and appliance systems are those that Arcelor Mittal USA is seen to
cater to (Wening et al., 2019). It is a fact well-known that Arcelor Mittal is a company which can
be regarded as the largest producer of steel in the whole world. It runs operations pertaining to
steel making in as many as nineteen different countries of the globe situated across four different
continents. While the company did incur some significant financial losses globally in the years
between 2011 and 2012, it has made a comeback in recent years. What accounted for the poor
financial performance of the company in these years is the fact and also in the years between
2014 and 2015 is the massive excess capacity of the company, which resulted in steel producers
in countries such as India, China and Japan and even in Russia being considerably spurred and
leading these countries to dump the steel products of the company at prices which were
artificially low in several of the geographic regions or markets where the company ran its
operations, pushing down the market prices of its steel products to an all-time low (based on case
study provided). Yet as mentioned above, Arcelor Mittal remains the largest producer of steel in
the world and has made a suitable comeback as of 2016, causing it to be regarded as a company
that is very well and strongly positioned in the international iron and steel industry (Mehta,
2019).

CASE ANALYSIS
The operations of US Steel are organized into three different and important segments.
These are tubular products, flat rolled products and products that are manufactured by US Steel
in Europe. The first two segments are those that cater to customers situated in the North
American continent and account for much of the profit of the company as is evident from the
sales figures of the company in the years between 2013 and 2015 (based on case study provided).
In this same period of time, it important to take note of the fact that US Steel experienced what
may be termed as a labor cost disadvantage in its competition with rival companies like Nucor
Corporation and Arcelor Mittal. This happened partly because of the costs that had to be incurred
by the company over the matter of retiree pensions and also because of the low productivity
which was generated by the company’s workforce, most of which was unionized at the time
(Nassar, 2019). It must also be noted that some of the internal initiatives that were launched by
the company in the year of 2013 to ensure a leaner and faster and definitely a more efficient
performance had not borne fruit until as late as 2016 and it remains to be seen as to how well
such initiatives are likely to work out for the company now and in the near future. By and large
though, US Steel is one of the toughest competitors for Nucor Corporation in the global steel
industry and is well positioned by virtue of the fact that it offers its customers with unique flat
rolled and tubular steel products to choose from, while catering to an exclusively European
market simultaneously at the same given time (Nassar, 2019).

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7. Key Success Factors of the Global Steel Industry
The global industry for Steel is one that is quite fragmented as a result of major players in
the industry have little or no control over selling prices. They are seldom able to dictate what it is
that the selling prices should be. Competition in the steel industry mostly revolves around the
area of pricing and the commodity nature or aspect of the steel products is something that
intensifies this competition even more. Some of the key or critical factors for success in the
global steel industry include the ability to engage in sustainable business operations in spite of
there being a significant downturn in the industry and also to offer steel products at a price which
is significantly low or competitive, in order to be able to march ahead of rivals. Cost structure is
also something that appears to be a major or critical factor for the steel industry especially at
time when the industry is going through a downturn. There are various other factors that also
influence how successfully or unsuccessfully the global steel industry is able to perform such as
operational integration, manufacturing route, technology, as well as operating efficiency, all of
which are seen to have an impact in particular on the cost structure that is followed by a steel
company (Guo et al., 2019). When aiming to arrive at an understanding of the key or most
important factors that contribute to the functioning of the steel industry worldwide however, the
following factors or points must be taken into consideration.
7.1. Proximity to Markets and Inputs
The ability to procure inputs for the purpose of production is one of the key factors that
can determine the success of a steel company and of the industry in general. Proximity to the
market as well as to inputs can lower many costs for a steel company such as the lowering of
freight charges, minimization of inward freight charges and a reduction in delivery costs. Close
proximity to the market is also something that can help a steel company to attract buyers or
customers far more readily than it could have been able to had it been situated far away from the
market. It can promote its steel products with a greater degree of effectiveness when it is situated
in close proximity to the market (Arogyaswamy et al., 2019).
7.2. Diverse Range of Products

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The more diverse the range of products, the more successful is the operations of a steel
company likely to be and this in turn will have a positive impact on the manner by which the
steel industry operates in general. Players in the steel industry who have the capacity to offer
diversified products for different types of sectors and for different industry applications in
particularly are likely to be far better positioned than competitors in the industry who focus on
the production and the manufacture of a single product. This is largely because of the fact that
such players are not going to be depending on demand growth that is associated with a single
sector only (Arreguin et al., 2016).
7.3. Access to Low Priced Raw Materials
Key inputs like coke, coal and iron ore are those that account for more than fifty percent
of the operating costs that are associated with steel production and manufacture (Othman &
Sokkar, 2019). Industry players who have access to raw materials of a low price or who have
captive input sources are going to do well in the industry as they will be in a position to
withstand the pressures that occur around the area of pricing, face competition, sustain
downturns, and perform far better in comparison to other players (Arogyaswamy, 2019).
7.4. Financial Structure
The financial structure of a steel company is something that plays a lot of importance in
determining how well a steel company is able to do in the global steel industry as a whole. Low
interest burdens for instance can prevent producers and manufacturers from incurring a high rate
of loss at a time when the industry is going through a downturn, and companies for which the
debt-equity mix is more or less balanced will be able to tackle operating levels of a lower margin
far better while also maintaining net level profitability (Blitz, 2017).
7.5. Assessing the KSF of the Industry using the Framework of KSF Weight Assessment
List of Success Factors and Weightage for the Same on a scale of 10 for Nucor Corporation
 Proximity to Markets and Inputs – 8/10
 Diversified Range of products – 9/10

CASE ANALYSIS
 access to low priced raw materials – 8/10
 financial structure – 8/10
Key Success Factor Weightage for US Steel
 Proximity to Markets and Inputs – 8/10
 Diversified Range of products – 7/10
 access to low priced raw materials – 7/10
 financial structure – 6/10
Key Success Factor Weightage for Arcelor Mittal USA
 Proximity to Markets and Inputs – 9/10
 Diversified Range of products – 8/10
 access to low priced raw materials – 9/10
 financial structure – 8/10
8. Understanding whether the Outlook of the Industry offers Nucor Corporation with
Sufficient Opportunity for Growth and Profitability
When analyzing whether or not the global steel industry offers Nucor Corporation with
sufficient opportunity for growth and profitability, it is important to remember first and foremost
that Nucor Corporation is one of the most important and active participants in the industry for
steel in the United States of America. It offers a broad range of products, which are diversified,
such as unfinished and finished steel products, in addition to scrap metal as well as scrap
substitutes (Nassar, 2019). There is a lot of competition for the company in all of the different
segments that it is seen to operate in, in the industry, with the ability of a company to be able to
perform and sustain in this industry being centered around both the matter of price and also the
capability of the company to meet the needs and the requirements of customers (Edwards et al.,
2016). Also owing to the global overcapacity that is seen to be in place, many steel makers in
different parts of the world are looking actively to seek out business operations in the geographic

CASE ANALYSIS
regions or markets in which they are able to locate willing customers or buyers. Steel imports
occupied as much as thirty four percent of the steel market of the USA in the years between 2014
and 2015 (Wening et al., 2019). Nucor Corporation at this point of time faced very stiff
competition with its rivals in the industry to get hold of buyers and to get hold of new orders for
the production of steel. In 2016, the domestic demand for steel products in the USA appeared not
to be too high, at least not high enough to give the company some relief from the stiff
competition that it has been experiencing in the previous years (Morfeldt et al., 2015). One of the
biggest competitions that the company is currently faced with globally is from the country of
China, which is regarded to be not only the largest producer of steel in the whole world but the
largest exporter of steel as well. Most Chinese producers of steel are those that are owned by the
government and as such seem to be benefitting a great deal from the manner by which the
Chinese government is able to manipulate foreign exchange rates. When it comes to the US
industry in particular, the company faces stiff competition from rivals such as US Steel and
Arcelor Mittal USA (Mehta, 2019).
As such, it can be said that the industry for steel both in the USA as well as in the world
is one that offers a company like Nucor Corporation with provision for growth and development
as the demand for steel is always high. Steel is a product that needs to be utilized for
manufacture in a wide range of sectors be it electronics, railways, the manufacture of appliances
or anything else. Nucor Corporation is always going to be able to locate a market where it is
going to find buyers for its products, even if it has to sell its steel products, many of which are
diversified and unique in scope and form, at prices that are artificially low. The profit levels of
the company are going to be high even if it sells its steel in the US and worldwide at a low
market price as the demand for steel is always substantively high (Edwards et al., 2015). Yet the
competition that the company has been faced with in the past and which it is likely to be faced
with in the near future as well, is something that it needs to take cognizance of if it has to grow
and prosper in the US and global steel industry. China is selling its steel products at artificially
low prices in many geographic regions of the world, and is therefore a major competitor for the
company at the global level, while in the US market, Nucor Corporation is a company that needs
to keep its steel products uniquely positioned from those of its major rivals here, that is, US Steel
and Arcelor Mittal USA, the latter being especially a force to reckon with in the global and
American steel industry (Peng et al., 2019).

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9. Financial health of the firm

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Figure 1, 2, 3 and 4: The financial condition of Nucor as compared to the competitors
(Source: Yahoo.com ,2019).
From the above given ratios of the organization, it can be rightfully reflected that, the
organization has been performing very well as compared to the different industry values. From
the given figures, it can be understood that, the Quick ratio is 1.7 which is above the industry

CASE ANALYSIS
standard of 1.37 On the other hand, the Current Ratio is 3.56 which are also above the standard
which has been set in the industry at 2.67. Along with the Asset Ratio of the firm is 1.41 which
can be taken to be almost the twice of the Industry level at 0.77 (Yahoo.com ,2019). . The
company has been earning a Return on Equity of 22.44% which is way more than the industry
standard of -2%.
Additionally, the net profit margin of the firm can be understood to be 9.3% which is
commendable keeping in mind the industry standards at 2.42%. Additionally, the firm has a
sound Gross margin. Hence, the firm can be taken to be financially healthy (Annual reports.com
,2019).
10. Analyzing the Competitively Important Resources and Capabilities of Nucor
Corporation
Some of the competitively important resources and capabilities of the Nucor Corporation
are the fact that it offers a broad and diversified range of products, giving its customers plenty of
variants and options to make their choice from at the time of purchase. To begin with, the
finished products offered by the company and also the unfinished line of products offered by
Nucor Corporation are of quite an extensive range and over and above such diversified products,
the company also offers scrap substitutes and scrap steel, both of which happen to be in high
demand in the US market (Nassar, 2019). One of the most intelligent and astute ways by which
the company administrators have been able to establish competitive advantage is the fact that it
has located all of the market segments or the sectors which are likely to be the most intensively
competitive and it has focused on both producing and delivering its steel products in a way that
these are able to do well in such sectors. It is important to note in this respect that the segments
identified as competitive sectors or market segments by the Nucor Corporation are segments that
are populated with both foreign as well as domestic rivals of the company (Arogyaswamy,
2019).
A key way by which Nucor Corporation has managed to maintain a competitive edge
over its business rivals is the fact that it has focused solely on the quality of its products. It has
focused its energies on giving customers high quality steel products to choose from for relatively
affordable prices as a consequence of which it has managed to keep its customers happy and

CASE ANALYSIS
satisfied and as a result of which it has done better than or performed at par with its rivals and
competitors in the market (based on case study provided). Nucor Corporation has also
maintained a competitive edge of its rivals and competitors in the US and global steel industry,
because of the fact that it has made the timely delivery of products an absolute priority. The
company has been and continues to make sure of the fact that customers get their requirements
delivered to them in a timely manner, that delivery dates are not compromised on and that
customers do not have to complain about the late delivery of a product (Nassar, 2019). The steel
products that are ordered from the company are always delivered to customers on time and the
quality of these products is something that is never compromised with. A lot of care and
attention is paid to detail by Nucor Corporation when it comes to the manufacture and the
distribution of its steel products with a lot of energy being spent on matters of precision and fine
tuning. For Nucor Corporation, what matters is that customers get their products in a timely
manner and the quality of the products is something that satisfies customers to the extent that it
makes them place further orders or requests for such products over the long time (Edwards et al.,
2015).
On the basis of the given scenario it can be seen that in the years between 2014 and 2015,
Nucor Corporation faced a lot of competition from its rivals, with the import of steel occupying
as much as thirty four percent or more of the US steel market. The domestic demand for steel
was certainly not high enough at this point of time and even in the later years in 2016, the fact
demand for steel that could be witnessed in the US market in particular was not significantly
high to give the company the relief that it needed from the competition of its rivals. However,
Nucor Corporation continued to focus on quality of products and the timely delivery of the same
to ensure that its existing client base was happy with what was being delivered to them and that
there were no customer grievances for the company to deal with (Edwards et al., 2016). When it
comes to the resources of the company in particular and the use of these for the establishment of
competitive advantage, it is important to make note of the fact that the company has utilized
electric arc furnaces in the mini mills to melt steel products like scrap metal and scrap substitutes
and through the use of thin slab casting technology, the company was able to produce steel
producers of a higher quality and more diversified variety, thus being able to compete far more
effectively in both the global and the US steel market than it was able to in the past (Nassar,
2019).

CASE ANALYSIS
The competitive situation of Nucor Corporation with specific reference to its resources
and capabilities will be further assessed with the help of VRIN framework –
Valuable – The financial resources of Nucor Corporation are highly valuable as is the
distribution network that the company uses for the smooth and efficiently delivery of its products
across the globe. Additionally, the fact that it has a network of suppliers that it can also count on
is a valuable resource of the company (Edwards et al., 2015).
Rare – None of the products that are made available for circulation in the market, by the Nucor
Corporation can be considered as rare. However, the distribution network of the organization is
indeed rare and competitors are going to require a lot of time and investment to come up with a
distribution network than the one owned by Nucor Corporation (Edwards et al., 2016).
Imitable – The products offered by Nucor Corporation are likely to be quite expensive to
imitate. Resources used by the company for the manufacture of its products are acquired through
profits accumulated over the years, rather than a single year. The employee base of the
organization will not be hard to imitate however as other companies can also train their workers
in similar skills or in the improvement of skills (Nasser, 2019).
Non Substitutable – The distribution network of Nucor Corporation can be difficult to substitute
because of the time and the considerable amount of investment that will be required by other
firms for this purpose (Nasser, 2019).
Upon VRIN analysis, it is evident that the company is quite well positioned towards
meeting the challenges posed by its industry competitors and rivals.
11. Understanding whether the Costs and Prices of Nucor Corporation are Competitive
with those of its Key Rivals, and whether or not it offers Attractive Customer Value
Proposition
This section will attempt to understand whether or not the costs and prices of Nucor
Corporation are competitive with those of its key rivals and specifically, whether it is offering
attractive customer value proposition or not. For this purpose, Porter’s Model of value chain
analysis will be used.

CASE ANALYSIS
Inbound Logistics – Nucor Corporation engages in the procurement of high quality inputs in
order to manufacture and offer products that are of a high finished quality. Incoming inputs are
also those that are handled quite effectively by the company to handle any sort of damage that
may occur with regard to the manufacture of products (Choi, 2019).
Outbound Logistics – Products are delivered by the company in a timely manner. Shipping is
carried out in an effective and efficient way and damages if these take place during the shipping
process are those that are reported right on time. The delivery capabilities are those that are kept
as flexible as possible. The order processing procedure which is followed by the company is also
quite effective and is designed in a way that it handles defects and delays with a great degree of
efficiency (Chaganti, 2019).
Operations – With regard to operations, one of the most important ways by which the value
chain or supply chain process of the Nucor Corporation helps the company to maintain a
competitive edge over its rivals is that the manufacturing system is one that is kept quite flexible.
The range of products that is offered by the company is also quite wide and product pre-mature
failure is something that is avoided by the company. Unique specifications of customers are
those that are quickly responded to. The defect rate is low. Product performance is something
that the company also looks into at all times by making sure of the fact that all types and forms
of technical specifications are conformed to. The company particularly focuses on the
appearance of products in order to make these come across as, as appealing to customers as
possible (Adams et al., 2019).
Marketing and Sales – The area of marketing and sales is one through which Nucor
Corporation seeks to ensure that its relationship with its suppliers and also with its customers is
kept as strong and as stable as possible. Communication with customers in particular is
something that is always enhanced and maintained by the company by giving its customers
access to high quality information. Brand awareness as well as image development and also
reputation management of the company is something that it engages in to make sure that its steel
products are as efficiently and as effectively marketed and advertised as possible. Plenty of
coordination is carried out and ensured between and among the different departments of the
company such as the marketing department, the research department and the department that is
concerned with manufacture or production. The sales force coverage of the company is also quite

CASE ANALYSIS
wide, and it makes sure of the fact that it is able to successfully respond to the needs and
requirements of its customers through each and every one of its steel products (Zweifel, 2019).
Services – Finally, in the area of services, it can be said that a company like Nucor Corporation
pays attention to the rendition of services that are of a superior quality. The technical assistance
that is made available to customers is something that is always of a high quality as well, while
repair and maintenance services are those that are also carried out very quickly and efficiently
(Choi, 2019).
Thus, the value chain analysis of Nucor Corporation has carried out above goes to show
that this is a company that leaves no stone unturned to ensure that customer requirements are met
through the provision of its products and services and that customers get full value for the money
that they spend on the steel products offered by Nucor Corporation. Attention is paid to the
quality of manufacture, the timely delivery of products and services and the quick rendition of
repair services, effective marketing and communication with customers, in addition to keeping
steel products as competitively priced as possible. Hence customers have little choice but to feel
valued by using the products offered by Nucor Corporation.

CASE ANALYSIS
12. Evaluation of Nucor Corporations Competitive Situation
This section will focus on evaluating the competitive situation and understanding whether
it is stronger or weaker than its rivals (Mahat, 2019). The threat of new entry is high for a
company like Nucor Corporation with new entrants in the industry posing a lot of pressure on the
company via cost reduction, new customer value propositions and through the lowering of its
pricing strategies. However such challenges are those that the Nucor Corporation is able to
adequately deal with. This is done through innovation of new services and products. Nucor
Corporation makes sure to keep its line of products as broad and as diversified as possible.
Economies of scale are also made use of by the Nucor Corporation so that the fixed costs per unit
can be significantly lowered (Gupta et al., 2019). The bargaining power of buyers is high for a
company like Nucor Corporation as buyers can always turn to rival companies like Arcelor
Mittal USA and US steel for the purchase of high quality steel products. This challenge is
something that Nucor Corporation deals with through the creation of a large customer base. The
production and sales process is considerably streamlined by the company to get as many people
to know about and buy the products of the Nucor Corporation has possible in order to reduce the
bargaining power of buyers. The company also innovates on its products on a regular basis, and
it makes sure to get products especially bulk orders delivered in a timely manner while ensuring
the best quality at the same given time, to ensure that the bargaining power of buyers does not
affect the performance and the business growth of the company (Duscha et al., 2019). Supplier
power is also something that is quite high for a business like the Nucor Corporation as it can fall
back only on a limited base of suppliers to acquire the raw materials that it needs for the process
of production. However, the bargaining power of suppliers is something that is combated by
Nucor Corporation in a number of different ways. To begin with, an efficient supply chain has
been established by the company with different suppliers around the world. Product designs are
also experimented with, using different types of raw materials so that the company does not have
to rely on one single or exclusive supplier for the acquisition of raw materials. A dedicated
system of suppliers has also been built by the company, who depend a lot on the firm for their
existence and whose services the company can always rely upon (Chan et al., 2018). The threat
of substation does not presently exist for a company like Nucor Corporation. However, it can
arise at any given point of time, if the customer value proposition that is presently being offered

CASE ANALYSIS
by the corporation ceases to keep customers happy in the short and long term. There are a
number of ways by which threat of substitution can however be handled by the Nucor
Corporation. The company can focus on not just being product oriented but being service
oriented too. It can cease to focus only on the types of products that customers are buying from it
and focus instead on the core needs and requirements of customers. Finally, switching cost for
customers is something that needs to be increased by the Nucor Corporation if it wants to deal
with the challenge or threat of substitution as effectively as possible. The higher the switching
costs, the lesser customers will be likely to substitute the products offered by Nucor Corporation
with products offered by rival firms (Gupta et al., 2019). Competitive rivalry is high for Nucor
Corporation, primarily because of the presence of companies like US Steel and Arcelor Mittal
USA in the US Steel market. However it is dealing with this competition effectively by building
economies of scale, by engaging in the differentiation of products and services and collaborating
rather than being just rivals with competing firms thus expanding market size (Chan et al., 2018).
Figure 5: The Strategic Positioning Map of Nucor
(Source: As created by the Author)
In conclusion it can be stated that Nucor Corporation is competitively quite well
positioned to deal with the threats and challenges posed by its rivals in the US and global steel

CASE ANALYSIS
market. While it is not necessarily stronger than its competitors, it is definitely not weaker than
them.
13. Generic strategy
The Generic strategies which are generally adopted by the various organizations can be
understood to be the strategies which assist in determine the direction of the firm or the manner
in which the firm is able to utilize its capabilities in order to see to it that, it is being able to
achieve its goals successfully. Therefore, in relation to this, the popular strategies which are
available are the Cost Leadership and the Differentiation strategies. The Nucor Corporation has
been able to adopt two of these strategies in order to see to it that it is successfully able to combat
against these sets of forces which lie in the external environment of the firm. These strategies
have been adapted from the book ‘Competitive Advantage: Creating and Sustaining Superior
Performance’ which has been written by Michael Porter (Frynas & Mellahi, 2015).
In the beginning of its overall operations and up to the year 2015, the organization had
been applying the cost leadership strategies to its operations in order to see to it that the firm will
be able to produce at the lowest costs possible and thereby ensure efficiency in its profit making
capabilities and thereby extend the overall leadership capability of the organization. By applying
this strategy Nucor has been able to ensure that it is successfully being able to make use of
efficient logistics and low costs when it comes to labor. This provided an opportunity to the
organization to function effectively.
Another generic strategy which is being applied by the organization recently is the
Differentiation strategy. In the differentiation strategy, the firm is being able to target a larger
target market by ensuring that it is adding value to the products so as to see to it that it can take a
larger price base for the product and is being able to optimize its profits (Bryce, 2017). In case of
this, strategy, engaging in large scale marketing is important and this is what the firm has been
doing. It has been analyzing the different ways in which it can add considerable value to the
products and in relation to this, it has been looking out to work on the quality of its offerings.

CASE ANALYSIS
Earlier, Nucor was primarily focused on providing just low end steel products which
helped it to maintain its overall positioning in the market, but currently post 2010, Nucor has
undertaken several initiatives in order to ensure that, it is being able to make its products value
added and thereby increase its revenue (Ethiraj, Gambardella & Helfat, 2017). The different
ways in which the firm has ensured capability can be understood to be by galvanizing
capabilities, expending its capabilities in Alabama, shipping of new steel plates and completing
the installation of shipments and other such facilities.
14. SWOT Analysis
The SWOT analysis can be understood to be a comprehensive tool which can be
essentially made use of in order to examine the manner in which the firm has been performing
internally and to determine the different ways in which the organization can be exposed to the
different opportunities in the future (Hitt, Ireland & Hoskisson, 2016).
The SWOT of the firm has been done as follows:
Strengths Weaknesses
1. The organization is an industry
leader
2. The firm engages in Lean
management
3. The firm has an advantage over the
suppliers (Nucor.com , 2019).
1. The operations of the organization are
highly dependent on the US Domestic
market
2. The diversification can be taken to be
limited in nature with no worldwide
presence
Opportunities Threats
1. The firm can enter into the Asia
Europe market through the joint
venture
2. It can engage in vertical integration
to engage in low cost energy
1. The labor costs have been rising to a
great extent
2. The threat of Chinese products
3. The declining US Retail estate

CASE ANALYSIS
capacities
subprime crises
15. Assessing the strategy
Strategy type Applicability Verdict
Strategic Fit Test As per the external analysis, it
could be figured that out of all
the steel companies present in
the environment, Nucor had
been performing considerably
well. The internal strategy also
assisted in understanding the
internal resources of the firm
and they have reflected
themselves as rare and useful
Win
Performance test The financial analysis
depicted that as compared to
the industry standards, the
organization has been
performing considerably well.
Additionally, comparing to the
competitors as well the
different competitors lack the
rare strategy making
capability and resources of
Nucor.
Win
The competitive advantage
test
The competitive advantage of
the firm lies in its expertise,
Win

CASE ANALYSIS
access to resource, loyal
customer base and cash
management
Therefore, from the analysis which has been undertaken in the previous sections, it can be
mentioned that, the organization has established itself in the right manner. Previously, the firm
had not been performing well when it had been taken over by the different competitors, however,
currently, the firm has undertaken various strategies like the sales of the Value added services
which has helped it to perform in the right way and deal with the target market by providing
them with the right services (Nucor.com ,2019). Hence, the firm has been following its
opportunities and in line with this, it can be mentioned that the firm’s differentiation strategy can
be mentioned to be a win win strategy
Conclusion
Hence, to summarize the report it can be mentioned that, the organization has been
undertaking the operations since a long period and therefore, it has experienced various changes
in the market, new governmental rules and other such barriers and limitations. Through its
strategies and the management capabilities, the firm has been able to meet all odds and has been
able to achieve the goals. The report followed a comprehensive format whereby it has discussed
the external environmental analysis along with the internal analysis. Additionally, the industry
and competitive analysis has also been presented. The Financial performance, key success
factors and the capability of the firm as compared to the industry has been provided. The SWOT
of the company along with the win win strategy of the firm has been presented.

CASE ANALYSIS
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