Strategic Management of Nucor Corporation in the Steel Industry

This report analyzes the strategic management of Nucor Corporation in the steel industry of the United States. It includes environmental and industry analysis, resources of the organization, success factors, and performance gaps. The report also provides strategic options, evaluation of strategies, and internal analysis of the company.

Strategic Management
Steel industry
4/12/2018
Nucor Corporation
Student Name:

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Table of Contents
Introduction................................................................................................................................4
Analysis..................................................................................................................................4
Pestle Analysis...................................................................................................................4
Porter Five Force Analysis.................................................................................................5
Key Drivers of Change.......................................................................................................5
Key Success Factors...........................................................................................................6
Strategic Group Map..........................................................................................................6
Life Cycle of the industry..................................................................................................6
Current Strategies of Company..........................................................................................6
SWOT Analysis.................................................................................................................6
Value Chain Analysis.........................................................................................................7
Competitor Analysis...........................................................................................................7
Key Strategic Issue.............................................................................................................7
Alternatives............................................................................................................................7
Recommendations......................................................................................................................8
References................................................................................................................................10
Appendix..................................................................................................................................11
1External Analysis...................................................................................................................11
1.1PESTLE Analysis............................................................................................................11
1.1.1Political....................................................................................................................11
1.1.2Economic..................................................................................................................12
1.1.3Social........................................................................................................................12
1.1.4Technological...........................................................................................................13
1.1.5Legal.........................................................................................................................13
1.1.6Environmental..........................................................................................................13
1.2United States Steel Industry............................................................................................13
1.3Porter Five Forces Analysis............................................................................................15
1.3.1Buyer’s Bargaining Power.......................................................................................15
1.3.2Supplier’s Bargaining Power...................................................................................16
1.3.3Rivalry among Existing Firms.................................................................................16
1.3.4Threats of New Entrants...........................................................................................17

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1.3.5Threat from Substitute Services of Products............................................................18
1.4Factors Driving Industry Change....................................................................................18
1.4.1Product.....................................................................................................................19
1.4.2Raw Material............................................................................................................19
1.4.3People.......................................................................................................................20
1.4.4Cost..........................................................................................................................20
1.5Steel Consumption in Various Countries........................................................................21
1.6Key Success Factors of U.S. Steel Industry....................................................................21
1.6.1Getting raw materials at less costs...........................................................................21
1.6.2Proximity to inputs and market................................................................................22
1.6.3Financial structure....................................................................................................22
1.6.4Varied product mix and section of value-added products........................................22
1.7Strategic Group Map Analysis........................................................................................23
1.8Life Cycle of United States Steel Industry......................................................................26
1.8.1Introduction Stage....................................................................................................26
1.8.2Growth Stage............................................................................................................26
1.8.3Maturity Stage..........................................................................................................27
1.8.4Decline Stage...........................................................................................................27
1.9Conclusion of Industry Analysis.........................................................................................27
2Internal Analysis....................................................................................................................28
2.1Financial Analysis...........................................................................................................28
2.2Current Strategy of Nucor Corporation...........................................................................29
2.2.1Strategies executed by Nucor Corporation..............................................................30
2.3SWOT Analysis..............................................................................................................32
2.3.1Strength of Nucor Corporation.................................................................................32
2.3.2Weaknesses..............................................................................................................33
2.3.3Opportunities............................................................................................................34
2.3.4Threats......................................................................................................................34
2.4Value Chain Analysis......................................................................................................35
2.4.1Primary Activities of Value Chain Analysis............................................................36
2.4.2Support Activities.....................................................................................................37
2.5Competitive Analysis......................................................................................................39
2.5.1Competitive Strength Assessment............................................................................39

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2.6Key Strategic Issue..........................................................................................................41

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Introduction
This report is being presented in order to address the issues that Nucor Corporation is facing
in the Steel industry of United States. It will comprise the environmental analysis, industry
analysis, resources of the organization, success factors, and performance gaps. Along with
this strategic options will be suggested and its justification. Evaluation of the strategies and
strategies through returns, effectiveness, and efficiency will be provided. Along with this
internal analysis of the Nucor Corporation will be done to provide a brief overview of the
performance and position of the company.
Nucor is one of the initial companies of steel in the United States to make use of electric arc
furnaces in order to melt second-hand steel (mainly from scrapped automobiles). It North
America company serve its customers and creates its existence in other nations like China,
South East, Brazil, Europe, and Korea (Thompson, 2014). The stakeholders of Nucor involve
medium and small enterprises and its key fears include large global and regional competitors,
i.e. U.S Steel, Baosteel, Mittal, Bethlehem.
Analysis
Pestle Analysis
Pestle analysis of the company reflects various factors that have a major impact on the
performance of Nucor Corporation (Appendix 1.1).
 The government of United States majorly support the rights and help in saving steel
companies from getting exploit due to international low-cost steel (Appendix 1.1.1).
 Considering the economic factor the GDP of the United States is 16691.5 billion
dollar and 17427.6 in 2014 and contribution of steel and iron industry in the economy
of U.S is 450.9 billion dollar in 2013 and 480.6 in 2014. These data reflect that steel

STRATEGIC MANAGEMENT 5
industry of the country plays important role in the development of the nation
(Appendix 1.1.2).
 The government has implemented Mining Resources Act at PRC and Control of
Water Pollution Act in order to smoothly operate the industry (Appendix 1.1.5).
 The steel industry provides employment to approx. 149,000 people ad it also takes
care of the well-being of the citizens by fulfilling its social responsibilities (Appendix
1.1.3).
 The United States steel industry make use of various advanced technologies in order
to provide better and advanced products to its customers.
Porter Five Force Analysis
The porter five force analyses is a strategic tool used to examine industry and comprehend
fundamental bars of effectiveness and productivity in the respective industry (Appendix 1.3).
This analysis reflects that the power of buyer’s and suppliers is high they are the one that
takes companies in the industry under pressure by showing their dominance. The steel
industry operates under huge rivalry among the companies operating in the industry
(Appendix 1.3.3). Along with this, the threat of new entrants in the industry is high due to
their innovative ideas, and methods of doing things (Appendix 1.3.4). The threat of substitute
is high as there are companies offering low-cost products to the customers in the industry
(Appendix 1.3.5).
Key Drivers of Change
There are four key drivers of change that are identified in this report i.e. raw material, cost,
people, and product (Appendix 1.4).

STRATEGIC MANAGEMENT 6
Key Success Factors
The key success factors of the industry that are helping the companies to gain success are
getting raw material at low cost, proximity to inputs and market, financial structure, varied
product mix and sector of value-added products (Appendix 1.6).
Strategic Group Map
The strategic group map reflects the position of the companies operating in the industry. The
Nucor Corporation is one of the well-known companies which offer low-cost products to the
customers and have a topmost position in the industry. After this, the second position is
gained by the United States Steel Corporation and on the third position, ArcelorMittal USA is
placed (Appendix 1.7).
Life Cycle of the industry
The life cycle of the industry reflects various stages of the whole life of the companies
present in the industry and what strategies they implement in order to attain the top stage.
This life cycle involves four stages i.e. Introduction, Growth, Maturity, and Decline
(Appendix 1.8).
Financial Analysis
Billion Billion Billion Billion Billion Billion
Balance Sheet
2013 2012 2011 2010 2009 Trend
Current Assets 6.41 5.66 6.71 5.86 5.18 Increasing
Current Liabilities 1.96 2.03 2.4 1.5 1.23 Fluctuating
Inventory 2.61 2.32 1.99 1.56 1.31 Increasing
Fixed or Non-Current
Assets 8.79 8.49 7.86 8.06 8.56 Increasing
Long Term Debt 4.38 3.38 3.63 4.28 7.39 Increasing
Shareholders’ Equity 7.91 7.89 7.71 7.33 7.58 Increasing
Retained Earnings 7.14 7.12 7.11 6.8 7.12 Increasing
Income Statement

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Sales or Revenues 19.05 19.43 20.02 15.84 11.19 fluctuating
EBITDA 928.72m 1.03 1.43 452.29m -196.88 fluctuating
G&A 481.91m 484.9m 520.64m 391.37m 351.27m fluctuating
R&D
Gross Operating
Margin ($) 1.41 1.51 1.95 843.66m 154.39m fluctuating
Net Operating Margin
($) 791.12m 852.94m 1.25 267.11m -4131.97m Decreasing
Net Income (Profit) 488.02m 504.6m 778.18m 134.09m -293.61m fluctuating
Cash Flow Statement
Cash from Operations 1.08 1.2 1.03 873.4m 1.18 Increasing
Key Metrics
Net Working Capital
(Current Assets -
Current Liabilities) 4.45 3.63 4.31 4.36 3.95 Fluctuating
Key Ratios
Profitability
Return on Assets
(EBITDA/Total Assets) 0 0.072791519
0.09814687
7 0.00
-
13.9137809
2
Return on Equity
(EBITDA/
Shareholder’s Equity
and Retained
Earnings) 0 0.130544994
0.18547341
1 0.00
-
25.9736147
8
Efficiency
Asset Turnover
(Revenues/Total
Assets)
1.2532894
7 1.373144876 1.37405628
1.13793103
4
0.86276021
6
Fluctuatin
g
Return on Capital
Employed
(EBITDA/Shareholder'
s Equity) 0 0.130544994
0.18547341
1 0.00
-
25.9736147
8
Leverage
Debt to Equity 0.9216182 0.794676806
0.88975356
7 0.89904502 4.99/7.58 Increasing
Liquidity
Current Ratio
(Current
assets/Current
liabilities)
3.2704081
6 2.788669951 2.79966611 2.79966611 2.79966611 Increasing

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Other Financial
Ratios
Inventory as a % of
Current Assets 40.72% 40.99% 29.66% 26.62% 25.29%
Gross Margins as a %
of Revenue 7.40% 0.077714874
0.09740259
7 0 0
Net Margins as a % of
Revenue 0.00% 0.00% 0.00% 0.00% 0.00%
Can the company pay its bills?
It can be observed that the current ratio of the company has increased from 2.79 in 2009 3.27
in 2013 which depicts that the liquidity position of the company has improved over the
period. The increase in the ratio reflects that company is able to pay its bills timely.
Does the company have the capacity to raise capital?
From the financial analysis of Nucor it can be observed that the debt to equity ratio is 0.92 in
2013 which reflects that the debt of the company is increasing. Therefore, in order to raise the
capital company needs to increase its equity.
Do the financials provide a competitive advantage? How?
 Well-organized production competences allow Nucor to transfer its savings to
consumers with a competitive price.
 The cost of capital of the company is very low which reflects that the company can
manufacture products at low cost and this can help company in attaining cost
leadership position in the market as compared to its competitors.
 The employees of the company are also very skilled and experienced.
What are the implications of the financials for future strategy and for the execution of
strategy?

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The company need to expand its business and can invest in the advanced technology which
will help in producing low cost product with less emission. Along with company can expand
its business by increasing in the demand.
How does the company perform compared to its competitors?
As compared to the competitor Nucor is able to provide its products at low cost which
reflects increase in the revenue of the company and will attract more customers as compared
to the competitor because the price of the competitor’s products is high.
What is increasing – revenue, debt, costs, etc.? What is decreasing? What are the
implications?
 From the financial analysis it can be observed that the revenue and debt of the
company are increasing.
 Gross margin is being influenced the increasing cost of raw material which is
decreasing the Net Income of the company.
 Nucor is experiencing growth in the revenue supports anticipation of the company
will expand because of increasing demand in the market.
 Comparing growth with the refining revenue of the Nucor suggest that it is taking
benefit of economies of scale.
Is the company in a healthy or unhealthy position? Implications
 Positive trend in the cash from operation and net working capital reflects that the
company will be profitable in the predictable feature.
 Efficient utilization of capital and balancing of debt to equity ratio by raising funds
will provide opportunity to the company.
What are the spreads – revenue/costs, revenue/EBIT, revenue/debt?

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 Revenue/ costs = 488.02m (2013): In 2012 and 2013 the total income of the company
has decreased which reflects that the company needs to cover its cost.
 Revenue/EBIT = 481.91m (2013): The decreasing revenue over EBIT suggests that
enhanced competence as earnings rises at a faster rate than Revenue.
 Revenue/debt = 4.349315068: The declining revenue/debt ratio is a worry but it is
reliable in the trend of the company of arranging the capital requirement by debt.
Current Strategies of Company
Nucor Corporation’s current strategies are well handled by their administration in the matter
of compatibility with their central capabilities and the environment of business including both
internal and external environment. The united strategy of Nucor is normally built upon two
frames and they are input and output model and resource-based model (Appendix 2.2).
SWOT Analysis
Strength - The strength of Nucor Corporation are Exclusive Management Viewpoint, and
Cost Control (Appendix 2.3.1).
Weaknesses – Nucor Corporation weaknesses are Disclosure to Variation in Value of Scrap
Steel, Lack of Market Divergence or Diversification (Appendix 2.3.2).
Opportunities – The opportunities for the company are Extension by the acquisition of
weakening steel manufacturers, and Political Support in the Implementation of trade Law
(Appendix 2.3.3).
Threat – Company's threat is growing overseas competition in the domestic market and
Technology Advancement (Appendix 2.3.4).

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Value Chain Analysis
Value chain analysis of Nucor Corporation reflects the strategies that help it by adding extra
value to the finished goods and examine those strategies in order to decrease the costs and
increase diversity (Appendix 2.4).
Competitor Analysis
The steel industry analysis fairly states the statistic that the segment has recently converted
into extremely competitive because of entry of low-cost products supplying companies in the
market. Maximum of the new participants in the market follow the price skimming strategy
which allows these companies to vend products with good quality at reasonable prices
(Appendix 2.5).
Key Strategic Issue
How to manage the effect of international low-cost goods in the steel industry? (Appendix
2.6)
Alternatives
 The Nucor Corporation can invest some of the amounts in developing new steel
products that will help in overcoming the competition from the foreign companies.
New alternatives to steel, fresher blends with improvements in the range of product
will beat all type of competition Nucor is dealing with.
 Nucor can also invest some efforts and cost in initiating a merger contract with an
international company to attain the opportunity and it will also support in the sector of
low cost. Partnership with the international company can also help in attaining the
competitive advantage as the base will become wider and can also introduce a new
market.

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 Nucor Corporation can increase the product price as it will support in reaching the
segmented and loyal market as individuals will trust in high price brands of improved
quality than an international factory-made one.
Recommendations
Nucor is the U.S market’s second largest producer of steel but still it is facing challenges
because of the infiltration of lower cost international steel. The finest way to counter strike
this problem is to accept various innovations that can result in acquiring low costs in the
process of manufacturing and even the final steel produced will be of lesser cost too. Nucor is
already the main organizations providing less cost structure; further struggling the foreign
producer of low-cost steel it is going to restate the image of the company into a cost
competitive.
The rise in the scrap material price and the increase in energy practice and rate is a key
obstacle that is to be intersected while taking the maximum out of the circumstances. The
materials sourcing from overseas will increase the cost but merge with or obtain locally the
producer of steel for sourcing of the material can incur fewer costs. Going to the different
sellers and carefully inspecting the supply chain and handling the power of bargaining will
result in cost-effective raw material sourcing.
Depressing the usage of energy is one of the factors that can be attained by resorting to
substitute technologies that will help in decreasing the cost. The innovations in the
technology and new forms of materials can be utilized that will use less power and energy in
the procedure.
Nucor should make its existence worldwide. The absence of the worldwide attitude can be
solved by wide initiatives of transferring goods to the emerging nations. These nations will

STRATEGIC MANAGEMENT 13
willingly receive the steels of low cost thus offering a new market for Nucor to function.
Accepting procedures that will carry the business to the international level will also increase
the target and value for company eventually it will take to a new height.
The danger of alliance is less operative for the Nucor as it is a huge among the less cost steel
manufacturers. It has acquired a lot of struggling businesses earlier and is not yet fighting
with the increasing costs. The finest method to fight the rivalry of alliance it has to upsurge
its base in broader and extent for fresher areas where it can set up manufacturing plants.
As the regulations of environment situation are annoying the company, it needs to accept well
tune strategies such that the business is not troubled due to any unexpected contrary
circumstances. The finest measure that could be occupied is to track what the other
companies in the industry are performing. Adjust with the norms and regulations of the
industry that are approved by the administration. Endorsing within and externally the
maintainable structures of the company will make an optimistic appearance of the Company
in the eyes of the competitors and customers. Taking on the modern technological inventions
to use supportable approaches in the processes of manufacturing and implementing them in
every manufacturing plant, using cost operative lighting systems will support Nucor in
avoiding the problems of increasing worry for nature.

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References
Thompson, A.A. (2014). Nucor Corporation in 2014: Combating Low-Cost Foreign Imports
and Depressed market Demand for Steel Products. U.S: The University of Alabama.

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Appendix
1External Analysis
1.1PESTLE Analysis
PESTLE analysis is the marketing principle concept and is also known as PEST analysis.
Furthermore, this concept is utilized by the companies as a tool in order to analyse the
environment in which business is operated or is in the process of planning to launch a new
product, project, or service.
1.1.1Political
Political factors determine the extent to which a government may influence the economic or a
certain industry. The government plays important role in the development of the country. For
Example, in the late 1990s Europe and Asia faced economic recession which also affected the
United States. Along with this in 2001, the attack by terrorist reduced the purchase of steel.
The market condition of steel industry in US was grim; due to this the third and fourth largest
company of steel became bankrupt. This resulted in flow of imports of the low-prices steel
from foreign countries. Nucor and many other companies decreased the values in order to
compete. The Department of Commerce of U.S stated that the companies of steel in six
countries (South Korea, South Africa, Canada, Belgium, Taiwan, and Italy) had unlawfully

STRATEGIC MANAGEMENT 16
deserted stainless steel in the U.S. Consequently, in 2001, the International Trade
Commission of U.S. said that the augmented imports of steel of cold-rolled sheet and strip,
semi-finished steel, corrosion resistant and coated sheet and strip, hot-rolled sheet, strip and
coils were a considerable reason of serious injury, to the steel industry of U.S. In 2002, the
Bush management compulsory started imposing tariffs on imports of up to 30% on selected
product of steel in order to provide aid from European and Asian companies who are
dumping their steel in the U.S at low prices.
1.1.2Economic
Economic factors are causes of the performance of an economy that directly influences a
business and have long-term effects. The total GDP of U.S in 2013 was 16691.5 billion dollar
and 17427.6 in 2014. The contribution of iron and steel industry was 450.9 billion dollar in
2013 and 480.6 in 2014 in the GDP which reflects that steel industry plays on of the
important role in the growth of U.S economy and support in enhancing the position of the
country in the world. In 2014, the U.S industry of steel and iron was the third-largest
producer of the world in terms of producing raw steel and world’s sixth largest producer of
pig iron. As per the analysis, the major U.S steelmakers are Commercial Metals Company,
Steel Dynamics, Nucor, AK Steel, and U.S Steel.
1.1.3Social
Social factors inspect the market’s social environment, and instrument determinants, some of
the factors are population analysis, demographics, and cultural trends, etc. The steel industry
of U.S provides employment to approx. 149,000 people and 69,000 in foundries. Besides this
the industry takes care of the well-being of the citizen therefore they have shifted all the
factories from the residential areas which resulted in reducing the pollution.

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1.1.4Technological
Nowadays, not a single industry operates without the use of Technology so as steel industry
as people have become more techno-savvy. About world’s 70% of the steel mill production
was made at large combined mills and 29% of steel production was done on mills that make
use of electric arc furnaces.
1.1.5Legal
There are some laws that influence the environment of business in a certain country whereas
there are some policies that are maintained by the companies for themselves. Mining
Resources Act at PRC and Control of Water Pollution Act are implemented by the U.S
government in order to smoothly operate the industry. A system of registration is established
for steel mining, to manage the mining assessment. Enterprises of Mining can commence
their business operations only when their application is accepted. Companies that offer fake
information are fined and punished.
1.1.6Environmental
Environmental factors comprise those aspects that affect or are dogged by the surrounding.
This feature of PESTLE is vital for certain industries. Every unit of Nucor Corporation is
dedicated towards promoting better environmental sustainability in the whole steel industry.
The company make some targets and objectives in order to reduce the use of grease and oil,
more well-organized use of electricity, and recycling of the scrap metals at every plant. Nucor
is said as the biggest user of scrap metal in North America.
1.2United States Steel Industry
The steel industry of United Stated was a unified producer of tubular steel and flat-rolled
products of steel with key operations of production in the Europe and United States. United
States steel industry was the third largest raw material producer of the world, and the sixth

STRATEGIC MANAGEMENT 18
largest pig iron producer. The U.S steel industry manufactured approx.88 million tons of steel
and 29 million metric tons of pig iron. Most of the steel and iron in U.S is now produced
from steel and iron scrap in place of iron ore. The U.S is the key importer of steel and iron
products.
The operations of steel industry of U.S were mainly structured into three segments of
business i.e. flat-rolled products (that comprised every unified mill of steel that manufactured
rounds, slabs of steel, sheet steel, tin mill products, and steel plate), tubular product
operations, and U.S Steel Europe. The segment of flat-rolled primarily aided the customers of
North America in the construction, appliance, transportation, electrical industries, plus
centers of steel service and manufacturers that purchased products of a steel mill for change
into a diversity of finished products of steel. Furthermore, this segment provided hot-rolled
bands and steel rounds which are required to manufacture steel casing and tubular goods to
the tubular segment of the company; consignments from the segment of flat-rolled to the
segment of tabular summed in 2013 of 1.7 million tons, in 2012 1.9 million tons, and in 2011
2.2 million tons. The flat-rolled segment of U.S steel has $11.5 billion of sales in 2013 and
$105 million as operating income, and $12.4 billion sales in 2011 and $469 million as
operating income.
Besides this, in 2014 this industry provided employment to approx. 149,000 people in steel
mills and 69,000 people in foundries. The key players in this industry are Carpenter
Technology, U.S Steel, AK Steel, Nucor, Commercial Metals Company and Steel Dynamics.
The business of the industry is growing with time because United States has urbanized the
complete nation’s infrastructure by the huge amount; this resulted in the increase of the
demand in the country. Furthermore, as the whole world is emerging with the time, the steel
demand has also increased with time, which allows the several manufacturing firms of steel
enjoy more opportunities of business. The United States steel industry indirectly and directly

STRATEGIC MANAGEMENT 19
supports approx. 1 million jobs in the nation. In the recent years, the industry has earned huge
amount of revenue, which broke several records of revenue.
1.3Porter Five Forces Analysis
Porter Five Forces Analysis is called as a strategic tool used to examine industry and
comprehend fundamental bars of effectiveness and productivity in the respective industry.
1.3.1Buyer’s Bargaining Power
Most of the buyers ask many things from the firm as they desire to purchase the perfect
product accessible in the market by paying the least price as possible. This keeps companies
of the industry under pressure and affects their profitability in long run. The smaller and
powerful base of a customer of steel companies of United State there will be higher
customer’s bargaining power and will also increase their expectations to get offers and
discounts.
Ways the existing Steel Corporations can handle Buyer’s Bargaining Power
 In order to manage the bargaining power of the buyer companies can create a large
customer base. This will support companies in two ways, it can decrease the buyer’s

STRATEGIC MANAGEMENT 20
bargaining power along with this it will offer a chance to the company to rationalize
its products and sales process.
1.3.2Supplier’s Bargaining Power
Most of the companies in Iron and Steel industry purchase raw material from various
suppliers. The suppliers with dominant position can reduce the margins that can help Steel
Corporations to earn a profit in the market. The suppliers that are powerful in the sector of
basic material make use of their negotiation power in order to get higher cost from the
companies operating in Iron and Steel field. The total influence of higher bargaining power of
supplier is that it reduces the profitability of Iron and Steel companies.
Ways the existing Steel Corporations can handle Supplier’ Bargaining Power
 The major players in the industry can do experiments with new designs of the product
by making use of different materials such that the price of one raw material go up the
firm can move to another one.
 Companies can make an effective chain of supply involving multiple suppliers
 The companies in the industry can make good relations with their suppliers in order to
convert them into loyal suppliers so that their business gets depend on the firm.
1.3.3Rivalry among Existing Firms
If in the industry the rivalry between the existing players is strong then it will result in
decreasing the prices and reduce the industry’s overall profitability. The Steel industry of
United States involves various players who make this industry competitive which influence
the performance and profitability of each participant.
Ways the existing Steel Corporations can handle Rivalry among Existing Firms
 The companies in the industry can differentiate themselves by offering different and
innovative products to the customers in the market.

STRATEGIC MANAGEMENT 21
 Companies in the industry can collaborate with their competitors in order to increase
the market share.
1.3.4Threats of New Entrants
The threat of new entrants in Steel and Iron industry of U.S. is high as they bring a new
method of performing jobs and put pressure on other Steel Corporations which are
performing in the U.S steel industry such as Nucor, U.K Steel, A.K Steel, etc. New entrants
in the industry come with strategies for lower pricing, the new value proposition for the
customers, and reducing costs. The existing corporations of the industry should try to manage
all these barriers and challenges and make effective strategies in order to defend its
competitive edge.
Ways the existing Steel Corporations can handle Threats of New Entrants
 The existing steel corporations i.e. Nucor, AK Steel, U.S. Steel, etc. can form
economies of scale such that it can help in decreasing the per unit fixed cost.
 Steel Corporations of U.S can produce new services and products. Innovative
products do not only increase the customer base but also provide existing customers
an aim to purchase the products.
 The existing players in the industry can spend more money on research and
development. New entrants avoid involving in a dynamic industry where the
recognized companies such as Nucor, United States Steel regularly define the
standards. It considerably decreases the space of surprising profits for the new
entrants which disappoint them.
1.3.5Threat from Substitute Services of Products
At the time when a new service or product fulfils a comparable need of the customer in
diverse ways, then the profitability of the industry suffers. For instance services such as

STRATEGIC MANAGEMENT 22
Google Drive and Dropbox are the alternatives to the drives of storage hardware. The threat
of substitute services or product is high if it provides a value proposition that is exclusively
diverse from current industry offerings.
Ways the existing Steel Corporations can handle the threat from substitute service or
product
 By considering the essential customer needs in place of what the consumer is
purchasing.
 The companies in the industry can handle this situation by becoming service oriented
in place of just being product oriented.
1.4Factors Driving Industry Change
In the U.S steel industry there are various factors that have huge impact on the trends and
developments of this industry. This comprises:
 Augmented competition due to elimination and deregulation of tariff and trade
barriers
 On-going globalization and attentiveness of the producers of steel
 Construction of environmental guidelines in relation to emissions (e.g., Kyoto
protocol) and effective management of waste materials
 Rearrangement of the production locations for semi-finished goods to planned sites
along the coast
Along with these factors, the producers of steel should also concentrate on and react to the
key driving forces behind growths in this industry. Some of the drivers stated by the
European Steel Technology Platform (ESTP) are Products, Raw material, People, and Cost.

STRATEGIC MANAGEMENT 23
1.4.1Product
A paradigm change can be seen today in the industry of steel in which firms are converting
from technology oriented to value improvement oriented. This is revealed by the producer’s
efforts in order to enhance the value and quality of their offerings as demonstrated by the
growth of fresh steel with ultra-high-strength. It is said to be a progress, which is particularly
reinforced by the automotive industry. The formation of steel with higher-value grades by
advanced product growth which is a significant step for upholding and growing current
markets, as well as for safeguarding niche markets. Instances of new steel grades for superior
uses comprise dual-phase, TWinning-Induced Plasticity (TWIP) and TRansformation
Induced Plasticity (TRIP) steels. This paradigm change is also understood by the producer’s
efforts to extend the value-added chain in construction by the enlarged connection of
downstream services like coating lines and galvanizing, by the production of, for instance,
custom-made blanks and parts of auto body where increased revenues can be attained. The
estimate, control and enhancement of the quality of the product are attained by the
implementation of complete automatic steel plants.
1.4.2Raw Material
The margin between the cost of steel production and revenues is anticipated to get thin as the
demand for energy supplies and raw material is increasing, hence driving the prices for these
in an rising curved. Escaping from this constriction revenue-cost cut will be the better and
direct practice of low cost and more extensively obtainable raw materials like iron ore fines.
Similarly, the safety of the environment by the use of advanced technologies that decreases
wastes and emissions (Carbon dioxide, dusts, sludge), along with progressive reprocessing
resolutions that change wastes into valued products, will ultimately become compulsory in
the industry.

STRATEGIC MANAGEMENT 24
1.4.3People
The most precious asset for a company is its motivated, experienced and highly skills
employees. Thus, aspects like job safety, training, working environment, and health are
becoming gradually very significant in order to ensure that the production plants are
preferably functioned and preserved for their complete service life. This also indicates
robotization and full automation in unsafe sites or areas of operations, like at the casting
platform and melt shop as well as workers networking and skill management to confirm
constant developments in production and plant operations. Modern system of idea
management helps in identifying the creativity potential and employee’s motivation.
1.4.4Cost
In addition to the development of higher-value products, the enduring decline of costs is
another key device which is used by the producer of steel in order to escape from the
declining margins between costs and revenues. This decline in the cost can be understood by
an enhancement of process of business (organizational aspects, flexible, investment strategy,
and just-in-time delivery, etc.), by methods to safe TCO (Total Cost of Ownership) in supply
chain by lifespan partnerships with service partners and suppliers, along with permanent
optimization of routes of production, logistics and equipment. Fast execution of best practices
such as benchmarking with the help of tools of knowledge management and the higher
engagement of mechanization systems are additional conclusive steps in the direction of
increasing profits and reducing costs.

STRATEGIC MANAGEMENT 25
1.5Steel Consumption in Various Countries
1.6Key Success Factors of U.S. Steel Industry
The steel industry of U.S. is disjointed, resulting in companies having slight control in
determining the vending or selling prices. The nature of the commodity of maximum of the
products of the steel and clustering up of capacity creation further strengthens the price
competition. Therefore, the success factors are the capability to provide finished good at less
prices and sustainability by the downturn of the industry. This can be attained by managing
the costs and maintaining it as low as possible. Structure of cost is the important factor that
defines the company’s sustainability by the down cycle in steel industry. Factors like
manufacturing route, operating efficiency, technology, and operational integration define the
steel company’s cost structure. Some of the key success factors of steel industry are:
1.6.1Getting raw materials at less costs
During the time period of 2004-2008, the industry of steel have experienced a major increase
in the key inputs cost such as coal, coke, and iron ore which cover 60% of the operating
costs. Therefore, in the long run companies with confined raw material will be better located
to endure pricing burdens, withstand slumps, face competition, and accomplish improved
position as compared to the competitors. Companies in the industry with confined iron ore
mines are protected from increasing the prices of iron ore. Likewise, companies in going into

STRATEGIC MANAGEMENT 26
contracts of long-term with the miners for obtaining iron ore are wealthy than the companies
buying from the spot market, precisely in the situation of increasing price.
1.6.2Proximity to inputs and market
In addition to the availability and cost of raw material, the logistics of obtaining raw material
or input is also considered as an important success factor. To reduce the charges of inward
freight on obtaining of raw materials — majorly coal and iron ore— plants should be placed
close to the mines whereas closeness to the markets supports company to reduce the cost of
delivery and attract buyers. Thus, maximum of the capacity declarations have been done in
those states which are rich in coal and iron ore.
1.6.3Financial structure
The financial structure undertakes abundant significance, particularly for the period of
industry downturn when the operating rates and prices are low. Low burden of interest
protects the manufacturers from the risk of suffering from losses. Companies with a robust
financial structure and composed debt-equity combination are at improved position to handle
inferior operating margins and uphold effectiveness at the next level.
1.6.4Varied product mix and section of value-added products
The companies with the capability to provide different products for different industry
applications are well positioned in comparison to the companies dealing in single goods or
products, as their affluence is not reliant on the demand growth of the particular sector. Along
with this the companies with existence in value-added goods usually display more constant
selling prices as compared to those manufacturing commodity grades. The understandings of
value-added products or goods are also advanced and are more constant than base grades.
The price of adding value is normally inferior in relation to the base grades, subsequent in

STRATEGIC MANAGEMENT 27
improved margins for such integrated companies. Forward integration can offer enhanced
opportunity to recover operating margins, subject to the place in the value chain.
1.7Strategic Group Map Analysis
ArcelorMittal USA
United States Steel
Nucor Steel
High
Profit
Low
Volume
High
Volume

STRATEGIC MANAGEMENT 28
Nucor Steel is on the leading position in the Steel industry of United States as reflected by
the above Strategic Group Map. The company has achieved this position due to its low-cost
strategy in the manufacturing of domestic steel. The company make use of flexible electric
arc mini-mills, possess a vertically integrated business that provides its raw material costs,
along with this it has an exclusive profit-sharing model of pay that offers rewards to the
employees, but requests them to put their efforts during the lean season. Nucor Steel has
entered into various joint ventures with the foreign partners in order to participate in projects
of steelmaking outside the boundary of North America. This helped the steel industry to grow
internationally and contribute more part in the country’s economy. Along with this Nucor has
implemented water cycling systems and is the biggest user of scrap metal and it also bought
million tons of direct reduced iron, and pig iron, product yearly - good quality of scrap
substitutes were particularly acute in producing sheet steel of premium grades, bar steel of
special quality and steel plate at several Nucor mills. Nucor followed this strategy in order to
have control over the cost of the product and environment.
U.S. Steel is also one of the leaders in this industry as it on the second position reflected by
the strategic group map. United States Steel is in the production of tubular steel and flat-
rolled steel production with most of the operations in Asia and Europe. About 27 million tons
of crude steel production was done by U.S steel in 2013, out of which 22 million tons of
Low
Profits

STRATEGIC MANAGEMENT 29
production were in North America. The Ontario and Canada's Hamilton facility was closed
permanently by U.S steel at the end of 2013, which reduced the capacity of North America’s
Steel Industry by 2.3 million tons. All the steel operations were sold by the company in 2012
in Serbia for one dollar, which resulted in approx. $400 million of loss on the sale. The crude
oil production of U.S steel in North America in 2013 was 17.9 million tons, in 2012 it was
19.1 million tons and in 2011, 18.6 million tons, which is equivalent to the rate of capacity
utilization in 2013 of 74%, in 2012 of 79%, and in 2011 of 77%.
The Arcelor Mittal USA is among the top players in the industry but has slitter lower
position as compared to Nucor Steel and U.S Steel. Arcelor Mittal USA activated 17 main
production services in 2013, with four big combined mills of steel, six plants of the electric
arc furnace, and four finishing and rolling plants. Its services were measured to be well-
organized and modern. It product range comprised of steel plate, wire rods of high quality,
tubular steel, rebars, cold rolled and hot rolled steel sheet, structural steel, steel bars, grinding
balls, tin mill products, and railroad rails. The overall performance of the company has
invested a lot in the growth of the industry. The company has worldwide sales revenue of
$79.4 billion and the net loss of $2.5 billion in 2012. The financial reports of the company
reflect that its steel operations were profitable and have a positive impact on the economic
growth of the industry

STRATEGIC MANAGEMENT 30
1.8Life Cycle of United States Steel Industry
The life cycle is the development of a business and its stages over time and is normally
categorized into five stages: Introduction, growth, maturity, and decline. The cycle is
represented on a graph with the time on the horizontal axis, and the cost on the vertical axis.
1.8.1Introduction Stage- At this stage the revenue is limited and costs are high, and values
are competitive.
 Nucor needs to carry equipment to less advanced countries in order to recover the
steel dispensation. Such foreign markets need much encouragement and receipt before
execution.
 For mini-mill technology of Nucor there is less competition, which is said to be their
niche, however, is still developing and adopting improved ways of progressing.
 Activities of distribution and advertising must also be wide to enter the market.
1.8.2Growth Stage – Nucor Corporation manages to upsurge its economies of scale and
development capacity by refining the cutting and rolling process. The company advances
comprises progressive process control sensors and enhancements in rolling and casting that
maximized market shares. These types of products are appropriate for emerging and
industrialized nations. There are various competitors at the growth stage acquiring these
goods or procedures to grow their strength and market share.

STRATEGIC MANAGEMENT 31
1.8.3Maturity Stage – At this stage, sales of the company decreases due to the entry of
competitor in the market with new and innovative products
Some current metallurgical practices need to search for new markets to introduce business.
This can be attained by providing base discounts to the loyal customers.
1.8.4Decline Stage – Various products can slowly decline, and with global markets providing
these inexpensive and improved steel, profits, and sales will drop which will result in:
 Extra costs to keep the accounts of the customer
 Divestment of some projects sold to decrease the cost of maintenance and to insert
fresh cash in other goods.
1.9Conclusion of Industry Analysis
The most essential conclusion that can be done from the above study of the steel industry
examination is that the industry is the most growing industry in the present economy. The
steel industry has practiced huge revenue in its product demand because of the several
projects of development. U.S, which is said to be one of the recognized nations in the
manufacturing of steel industry have relished high income in current time period. The country
has several well- well-known steel producers, who create and vends huge amount of steel
every year. Additionally, the study covers a graph, which reflects the China is the highest
consumer of steel, which is noted at 704.9 million tonne. The second position is covered by
U.S because they are noted at the 117.9million tonne consumption. This highlights that the
maximum emerging nations have the extreme steel demand. The above analysis also
concludes that the demand of steel will increase in the future because these countries will
grow more in the coming future. Hence, it can be said that the industry of steel is one of the

STRATEGIC MANAGEMENT 32
industry that will grow in a repaid rate in the recent days, thus growing the portion of revenue
of the whole industry.
2Internal Analysis
2.1Financial Analysis
From the above financial analysis of Nucor Corporation, it can be seen that the financial
results of the company are quite fluctuating since last 5 years i.e. 2009 to 2013 which shows
there is no particular trend followed by the company neither increasing nor decreasing.
However the results of 2013 are considerably better than the last few years so the company
can said to be financially strong and liquid to repay its bills. If company raises further equity
capital it will amount to inflow of cash to expand its business operations, but its internal debt
will increase.
2.2Current Strategy of Nucor Corporation
The performance of the companies gets affected by the internal and external environment.
Successful and leading companies like Nucor Corporation normally frames and execute
numerous new policies for directing the company’s external and internal environment and the
policies also support them to make use of every organizational and business resource like
finance, human efficiently. Along with this it is also important to examine the strategies
executed by the businesses that are being used for solving the issues of the organization.
Finally, measuring the present strategy will support company in providing strategic
recommendation to refine the performance of the business.

STRATEGIC MANAGEMENT 33
2.2.1Strategies executed by Nucor Corporation
The Nucor Corporation management is considerably devoted towards their innovations in the
technology for decreasing costs. In addition, the HR department of Nucor Corporation is also
concentrating on various factors including employee motivation, teamwork, and continuous
improvements towards achieving organizational success and goals.
 Nucor Corporation is also involving in ventures with other international companies
that are the innovators of the industry for leveraging variety supplies of input and
technology development.
 Nucor is focused towards expanding their business operations by connecting with
several strategic acquisitions internationally.
Nucor Corporation’s current strategies are well handled by their administration in the matter
of compatibility with their central capabilities and the environment of business including both
internal and external environment. Though, there are several drawbacks of the current
policies of Nucor as their policies are directed less on the worldwide strategies. There are
several profits and chances of executing worldwide strategies and the main benefit comprise
employing the boom of steel industry worldwide, cheap workforce and informal access to
required raw materials. Moreover, the neglected expressing and executing policies for
expanding their market towards construction and automotive industry that are vital in the
existing situations. The united strategy of Nucor is normally built upon two frames and they
are input and output model and resource based model. According to the resource view, the
policies of Nucor comprise the following:
Creative Workforce: Creative personnel is very vital for a maximum of the corporations,
particularly for the companies in the manufacturing segment like Nucor Corporation.

STRATEGIC MANAGEMENT 34
Creative employees also support company to improve their efficiency and effectiveness.
Furthermore, the company will also able to accomplish any serious situation successfully.
Advanced Technology: Advanced technologies are also an important portion of the
manufacturing companies for improving their efficiency. Progressive technology is valuable
for decreasing reversal time and for improving product quality. Moreover, Nucor is capable
to stretch their manufacture amount because of the execution of inventive technologies in
their administrative and corporate environment. The business has also provided priority for
consuming that technology which is environment-friendly for improving their market status
and sustainability.
The Input and Output Model comprises the following strategies:
Differentiation – Nucor is now concentrating on its differentiation strategies because these
policies are important for improving new opportunities and company has been depending on
their business operations which will support in decreasing the extra pressure from the steel
business.
Cost Leadership – Nucor Company follows several strategies of cost leadership for refining
the presentation of their processes and for improving their effectiveness. The firm is making
use of innovative technology that is dependent on machinery to improve production and to
reduce the cost of production that will support them to feat economies of scale.

STRATEGIC MANAGEMENT 35
2.3SWOT Analysis
A process that helps in recognizing the strengths, weaknesses, opportunities, and threats of an
organization is known as SWOT Analysis. Precisely, SWOT is said to be a simple reasoned
framework that measures what an entity (frequently a business, however it can be a place,
product, or industry) can perform and cannot perform, for both internal and external factor.
By using the environmental data in order to assess the company’s position, a SWOT analysis
defines what helps the firm in achieving its purposes, and what hindrances should be
overcome or reduced to attain anticipated results.
2.3.1Strength of Nucor Corporation
Exclusive Management Viewpoint
One of the key strength of Nucor is that it is concentrated towards bringing out the possible
efforts and skills of their employees. Nucor empowers its employees by permitting them to
take decisions in the organization. Along with this the labors also have their wages are linked
to their productivity or efficiency and as an outcome, get higher wages.

STRATEGIC MANAGEMENT 36
Cost Control
Cost control in the market with slitter area for diversity, Nucor has gained expertise in
maintaining low cost is a great advantage. Beginning as a joint producer, it went in the value
chain to get cheap raw material and later it became so effective in producing steel that
maximum of its production of steel was vented externally. Nucor maintains itself informed
about the advances in the latest technology and implement them in its business processes to
regularly maintain the low cost of the product. Nucor’s producing cost of every ton of steel is
considerably lesser as compared to their local competitors. This expertise assists them
properly in the developing steel industry.
2.3.2Weaknesses
Disclosure of Variation in Value of Scrap Steel
The key raw material in the steel production is scrap steel in the mini-mills. The quick
acceptance of the technology of twin shell arc furnace by the steel industry is quickly
decreasing the obtainability of scrap steel for Nucor. As a consequence, rates surged and this
affects the Nucor profitability. This disclosure to variation in the value of scrap steel reflects
a key weakness in company’s business model.
Lack of Market Divergence or Diversification
The company lacks in market diversification as it earns a maximum of its income from the
U.S. market. This discloses them to the variation in the economy of US because the steel
demand will fall when the economy loosens and they will not have another path to earning
their income or revenue.

STRATEGIC MANAGEMENT 37
2.3.3Opportunities
Extension by the acquisition of weakening steel manufacturers
The attack of steel imports which are cheap is taking various incompetent steel makers of US
towards insolvency. This signifies an occasion or opportunity for Nucor to grow with the help
of different acquisition. This will support Nucor Company to grow its market share and enjoy
cost advantages by increases in the economies of scale.
Political Support in the Implementation of trade Law
One of the key causes of the declining in the Nucor profit margin is because of the foreign
competitors who dump their cheap foreign steel. After getting unsuccessful to execute tariffs
on these cheap steel, the Bush government was then identifying directions to reduce the
cheap steel dumping by legal norms. These legal norms and law against cheap steel dumping,
if positively imposed, will support to safeguard the Nucor’s profit margin in the U.S. market.
2.3.4Threats
Growing overseas competition in the domestic market
The prices of steel in the United States have been affected by the growing competition from
imports. In 2004, the demand for steel in Chine decreased which derived this problem and
Chine became a steel exporter. This progress is rapidly corroding the share of market and
Nucor’s profit margin in the United States. Furthermore, worldwide steel manufacturers are
combining and refining their structure of cost by enhancing the economies of scale. Mittal
Steel in specific has entered the market of United States with its ISG acquisition.
Technology Advancement
In the steelmaking technological advancement reflects a threat towards a strategy of the low-
cost production of Nucor. The growth of an innovative technology by Posco Steelworks is
capable to decrease the cost of production by 1/5 and cut damaging releases by 90%. This

STRATEGIC MANAGEMENT 38
machinery may offer the competitors of Nucor a competitive advantage and intimidate the
Nucor’s cost leadership position.
Analysis – Nucor can face all the threats and can grab the opportunities by expanding its
business in the international market. The company can make use of its strength in order to
control the prices in the foreign market and attempt to achieve the position of cost leadership,
as what they gained in their local market.
Nucor should adopt market diversification strategy in order to overcome its weaknesses of
depending majorly on the United States economy. This will help the company in making its
balanced market portfolio.
2.4Value Chain Analysis
A process where a company recognizes it’s major and provision doings that add extra value
to its finished good and then examine these doings to decrease costs or raise diversity are
known as Value Chain Analysis. In other words, by seeing in the internal actions, the
investigation discloses where the competitive advantage and disadvantages of a firm are. The
company that strives for diversity advantage will attempt to complete its actions effectively
as compared to its competitors. If it successfully competes through the cost advantage, it will
attempt to achieve internal actions at lesser costs in comparison to its competitors. When a
business is accomplished by manufacturing goods at lesser costs than the price of the market
or to offer greater products, it makes profits.

STRATEGIC MANAGEMENT 39
2.4.1Primary Activities of Value Chain Analysis
Inbound Logistics
Developing procedures to generate own raw materials – The company is focused
toward0073 making their own raw material in order to avoid the increase in the base value
product and cost of transportation.
Greater Computerised Inventory Management – Nucor has implemented innovative and
advanced computerized technology in order to manage the actions in their inventory
management.
Operations
The Nucor Corporation management is handling their process of production before
transferring it towards the department of inspection. All the employees of Nucor Corporation
have overall responsibility and control over the quality of the product. The administration of
the company also looking for altering their processes and trying to make it more flexible for
reducing cost and for growth opportunities.
Outbound Logistics
Nucor Corporation transfers its steel products across the world with good rates of exchange
for external purchasers. Projects in Trinidad, Brazil, and Australia raise the brand awareness
of Nucor. It also incorporates effectively with the suppliers and all others members part of
supply chain, which helps in making processes more coordinated and well-organized.
Marketing and Sales
The Nucor Corporation’s administrative department is focused on the sales and marketing for
their production sites individually. Furthermore, the administration is handling strong
associations with the external entities. The company’s management is also focused towards
using the campaigns of national advertisement in order to promote their goods like Joist. The

STRATEGIC MANAGEMENT 40
Company’s sales officers are utilizing computerized systems for planning their marketing,
sales and advertising strategies. Along with this, these systems are supporting company to
design competitive prices by estimating time and production cost.
Service
Nucor Corporation has an effective brand image in the market particularly in the United
States and they continuously keep the concerns of their employees and stakeholders first. The
company is also putting its efforts to improve the product quality and to make reasonable
prices and competitive.
2.4.2Support Activities
Firm Infrastructure
The operations of the business of the overall firm, Nucor is completely a steel plat based
manufacturing, personnel management, selling, accounting units, and engineering. The key
goal of the manufacturing units is to concentrate towards the company’s profit. Though, most
of Nucor’s plants are decentralized mainly that permits for more freedom and flexibility for
the personnel, who are frequently interacting, distributing and cooperating hard work for
refining the organization’s performance.
Human Resource Management
The company’s human resource department is efficient for handling their roles,
responsibilities and their employees are their first priority. The Nucor Corporation’s HR
personnel have trust that they can handle and reduce their cost of production if they are
capable to gratify their workforces and by endorsing authority. Their practices of HRM
confirm that all the personnel should be treated similarly and with the equal movement of
information. These strategies of HRM are supporting company and management of Nucor to
improve their performance.

STRATEGIC MANAGEMENT 41
Technology Development
Besides being a large organization and an excellent business, Nucor has not invested any sum
of amount for their R&D and as an outcome; the company is majorly depending on various
other companies to start activities of R&D for them. Though, the Nucor management has
hired an effective nursing team for examining technological developments. The strategy is
supporting company in avoiding incurring costs of R&D. Though, the company has executed
advance technologies in the department of manufacturing and operation for improving the
products more effectively. Along with this company is also upgrading and advancing their
technologies at regular time intervals for attaining a competitive edge over their competitors.
Procurement
Nucor is involved in the acquisitions and merger for enhancing the scrap metal production.
The company has improved the internal flexibility in their operations for becoming self-
governing and dropping dependence upon several other companies in the matter of raw
materials. Hence, the main agenda is to improve the bottom line. This has provided an
opportunity for Nucor to raise the amount of production and supplementary raw materials
that are supporting the company to raise net income. The main strategy for the company in
the matter of procurement is to decrease the cost.
2.5Competitive Analysis
The steel industry analysis fairly states the statistic that the segment has recently converted
into extremely competitive. This is due to the several new companies that have arrived in the
steel industry and are vending goods at lesser prices. The main difficulty for the large
companies of the industry rises as the new applicants sell goods at lesser prices. This is the
cause of the competitiveness of the steel industry, as customers of the industry have a huge
propensity to get enticed to low price good. Furthermore, maximum of the new participants in
the market accept the price skimming strategy which allows these companies to vend

STRATEGIC MANAGEMENT 42
products with good quality at reasonable prices. This is the common strategy that is
implemented by every new company to appeal a large number of customers. This attraction
of customers towards the new company disguisedly cuts the sale of the large companies in
the steel industry. The competitiveness of the industry has augmented in the current time due
to the policies executed by these companies.
Nucor Corporation is the well-known and reputable company in the whole industry of steel.
The company has realized numerous milestones in current time by employing the huge
opportunities of the business. These milestones have permitted the company to attain a huge
competitive advantage in the whole industry. Though, the company has tackled enormous
amount of rivalry from its competitors in the industry. The competitors of Nucor Corporation
in the steel industry are United States Steel, Arcelor Mittal USA, Posco Steel, A.K Steel, etc.
2.5.1Competitive Strength Assessment
Competitors Service Quality Location
US Steel The United States
Steel is a steel
producer deals in
tubular steel and flat-
rolled steel with key
operations in Asia
and Europe. They
offer effective
services to its
customers which help
them in gaining loyal
The quality of the US
Steel products is
good as compared to
the China steel
products. The
company tries to
compete with the
foreign companies
who are dumping
their low-quality
steel in the United
The company
primarily located in
the United States but
have its most of the
business operations
in Asia and Europe.

STRATEGIC MANAGEMENT 43
customers. But
besides this, the
company does not do
much of the
innovations.
States.
Arcelor Mittal USA Arcelor Mittal USA
activated 17 main
production services
in 2013, with four
big combined mills
of steel, six plants of
the electric arc
furnace, and four
finishing and rolling
plants. Its services
were measured to be
well-organized and
modern. The
company is offering
its services across the
world.
The company has
strong Research and
development team
which helps them in
providing qualitative
products to the
customer. This
company is also
putting its efforts to
compete with the
China steel
companies and
increase profit
margin.
The company has its
worldwide business
operations with
headquarter in
Luxembourg.
Nucor Corporation has achieved and accomplished its business in a proficient manner, which
has helped the company survive in the penetrating competition with comfort. The Nucor
management has to make up the strategies that must be executed to survive the coming

STRATEGIC MANAGEMENT 44
circumstances and competition in the future. As compared to the competitors Nucor is gained
success in maintaining a low cost of its products by effectively using scrap steel in the
manufacturing of the products.
2.6Key Strategic Issue
How to manage the effect of international low-cost goods in the steel industry? Nucor makes
use of various and diverse strategies in order to face the market condition and competitions.
One of the important strategies that company implemented was to start a sum of acquisitions
to develop into giant steel manufacturer in America. The revenue of the Nucor after 2006 was
on high point but issues were faced by the company when international manufactured steel
are subverting the market of US. This gave growth to a rigid competition in the lesser cost
portion as these international products are accessible at very low cost.