MGT5170: Nucor Corporation Strategy Analysis Case Study

This case study examines Nucor Corporation, a major American steel producer, focusing on its strategic position within the industry. The analysis begins with an executive summary outlining Nucor's strengths, weaknesses, opportunities, and threats (SWOT). It then delves into external environmental factors using PESTEL analysis, assessing political, economic, social, technological, environmental, and legal influences. Porter's Five Forces are employed to evaluate industry attractiveness, while a strategic group map identifies key competitors. Internal analysis includes financial and value chain assessments, leading to a SWOT analysis that synthesizes key findings. The study concludes with strategic recommendations, addressing key issues and proposing courses of action for Nucor's continued success in a competitive market.

Case Name
Author

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Executive Summary
The reason for this article is to speak about the key issues of Nucor Corporation (Nucor), the
American producer of steel and its related products. As a very differentiated maker of steel in
North America, Nucor has an administration and framework that can help in catching positive
patterns in the market. This study, for the most part, looks to examine Nucor's general
circumstance by utilizing a SWOT investigation. Its inside strength incorporates one of a kind
administration reasoning, high innovation, and minimal effort. Weaknesses of this industry
include its heavy reliance on the US local market and the absence of scope in future for market
broadening. Its chances are development plants to outside nations and backing from the
administration. What's more, its threats are from rivalry with the universal opponents, easing
back economy, maturing people born after WW2 and vacillation in the cost of scrap steel.
Furthermore, the key procedure is venturing into the worldwide markets.
The examination will significantly feature the different divisions of the steel business, which will
empower the peruse to portray an outline of the whole business in the United States. The
assessment includes a critical part that will highlight the proportion of the competitiveness of the
steel business in future. Besides, the various procedures that ought to be applied by the
associations inside the steel business to achieve a raised degree of progress have been evaluated
too inside the assessment. Like Hambrick and Fredrickson explained that few businesses create
value for their clients and generate returns for shareholders. NUE belongs to the same category.
Recently, business models have been in the focus of manystrategy investigations of competitive
advantage. The understudy has surveyed various articles and books during the sorting out of the
assessment, which taught the understudy concerning the distinctive practical and successful
promoting frameworks. Meanwhile, the assessment has been made on the firm "Nucor
Corporation (NYSE: NUE)"; the largest steel producer and recycler of steel in the United States.
The structure of the assessment has been made in such a manner that will allow the pursuant in
understanding the certified goal of the entire assessment. The segment of Industry investigation
will feature the different highlights of the steel business
The key factors that the steel firms inside the business ought to follow to arrive at progress have
been expounded also. Besides, the completive powers and favourable circumstances of Nucor
Corporation and the steel business have been connected which will assist the student in pointing
out the escape clauses of Nucor Corporation. The second region of the assessment contains the
examination of Nucor Corporation, which extracts the diverse appreciative and aggressive
sections of the firm. The business audit, which has been made in the essential division of the
assignment, has been differentiated and the associated assessment in a consequent zone. The last
section of the examination will allow the reader to understand the distinctive key issues of the
Nucor Corporation, and various propositions as indicated by the issues have been progressed
moreover.
One of the significant reasons for the investigation is to break down the different components of
the Steel business and Nucor Corporation. Additionally, the investigation will likewise
concentrate on the different issues that have been looked at by Nucor Corporation in the ongoing
time. These issues will be assessed with the present prerequisites of the steel business. The
different escape clauses that will be featured during this strategy will be examined with extreme

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consideration. Another significant motivation behind the investigation is to prescribe different
powerful procedures that will assist the firm in covering up these escape clauses and make the
business procedure of Nucor Corporation even smoother.

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A.EXTERNAL ENVIRONMENTAL ANALYSIS 5
Steep Analysis 5
Issues Priority Matrix 6
Strategic Group Map 7
Porter's Five Forces Analysis 8
4.1 External Opportunities and Threats 9
B. INTERNAL ENVIRONMENTAL ANALYSIS 10
Current Strategy 10
Financial Analysis 12
Value Chain Analysis 15
VRIO RESOURCE STRENGTHS AND WEAKNESS 16
Swot Analysis 19
C. RECOMMENDATIONS AND CONCLUSION 24
Key Strategy Issues 24
Strategies 25
Favored Course Of Action 27
D. Reference 29

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A. EXTERNAL ENVIRONMENTAL
ANALYSIS
1. Steep Analysis
PESTEL assessment gives phenomenal understanding regarding the working challenges Nucor
Corporation will glance in inevitable enormous scope conditions apart from competitive forces.
For instance, an Industry may be remarkably profitable with a secured advancement course, but
still it won’t be of any use for Nucor Corporation if it is arranged in wobbly political
circumstances. Changes in the comprehensive state components can straightforwardly affect the
Nucor Corporation and can also influence various competitors in the Steel and Iron industry. The
comprehensive state parts can affect the Porter Five Forces that shape the structure and
competitive scene. They can impact the single organization's competitive favoured position or
regulate the profit levels of the Basic Materials industry. (Devinney, Yip& Johnson,2010).
Bureaucratic Factors that affect Nucor Corporation
Bureaucratic factors expect a fundamental activity in selecting the components that can impact
Nucor Corporation's long stretch benefit in a specified country or market. Nucor Corporation is
working in Steel and Iron in more than twelve countries and open itself to a variety of
bureaucratic condition and political system perils. Exchange regulations and expense issues both
are significant for Nucor. Duties resemble a threat as the administration makes arrangements for
organizations as tremendous as Nucor. Even though exchange guidelines will consistently be an
opportunity as it has tremendous fare business that will get sponsorship by the legislature.
Economic Factors that affect Nucor Corporation
The large-scale factors, for example, – expanding rate, hold sponsored rate, advance charge,
outside change scale, and economic cycle chooses the all-out intrigue and absolute enthusiasm
for an economy. Nucor Corporation can make use of the country's economic factor, for example,
rate of advancing, growing and industry's economic pointers, for example, Steel and Iron
industry improvement rate, customer expenditure, etc to check the improvement policy of -
segment name- - dividing just as that of the merging. Change scale strength is incredibly critical
for Nucor as it has massive EXIM lines. Even though the growing joblessness rates likely won't
impact this association as they are celebrated for their HRM measures.

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Civic Factors that affect Nucor Corporation
Society's way of living life and doing things influence the lifestyle of a relation in an area.
Common feelings and attitudes of lots of people expect a exceptional activity in how promoters
at Nucor Corporation will attract the customers of a given market and how they plan the
promotion act for Steel and Iron industry purchasers. The ability to be and remain in the general
public gives a high opportunity to Nucor as it is a major brand and an independent organization.
The enterprising soul is a threat to the organization as individuals are not all that inviting right
now nobody adores others' prosperity. (Coccia, 2014).
Technological Factors that affect Nucor Corporation
Advancement is fast overturning diverse undertakings no matter what you look like at it. The
transportation business is a good example to show this point. Throughout the last 5 years, the
business has been expanding rapidly, not using any means offering the opportunity to the
arrangement players to adapt the changes. The taxi business is overpowered by companies like
Uber and Lyft. The vehicle business is quickly pushing to automation moved by advancement
firms, for example, Google and gathering are upset by Tesla, which has interfaced an electric
vehicle uprising. The new and best in class development is one thing that Nucor has surmised in
its structure anyway it is a high threat as the foes and the anticipated changes will show a
significant test on the association. While the cost of development isn't an issue to the association
as it's a made one with tremendous endeavour power.
Environmental Factors that Impact Nucor Corporation
Various kinds of markets have different concepts or environmental standards that can impact the
advantage of a relationship in those business divisions. To be sure, even inside a country much of
the time states can have various environmental laws and commitment laws. The adjustments in
the earth don't present quite a bit of a threat to Nucor yet the waste administration and
contamination control standards can influence the organization. As we as a whole realize Steel
organizations dump colossal measures of waste and contaminate nature. (Buehler, 2010).
2. Issues Priority Matrix
Influence on Organization
Possibilities
of Occurrence
High Medium Low
High Entrepreneurial essence and
broader style of the society.
Waste management in the Basic
Materials sector.
Exchange rates & stability of host
Technology's influence
on product offering

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country currency.
Trade regulations
Medium Grading and power
structure in the
society.
Taxation - tax rates and
incentives
Low Influence on cost
structure in Steel &
Iron industry
Influence on cost
structure in Steel & Iron
industry
Climate change
Unemployment rate
3. Strategic Group Map
The idea of competition inside the Steel business can be assessed by checking the different
systems that have been applied by the organizations inside the business. The assessment of these
procedures will assist with understanding the idea of competition inside the business. As the
market of the business is greatly competitive, different new entrants inside the market have
applied the system of value skimming (Johnston and Bate, 2013). This shows the idea of
competition inside the business is in such a position, that purchasers will effortlessly get pulled
in too low valued products. In any case, the assessment likewise shows that the well - famous
firms inside the business have confronted different issues because of these variables. The firm
Nucor Corporation is one of the best - famous and set up firms inside the whole steel industry.
The firm has accomplished different achievements in the ongoing time by using the enormous
business opportunity of the business. These achievements have empowered the firm to
accomplish a huge competitive bit of leeway inside the business (Kulkarni, 2009). In any case,
the firm has confronted a huge measure of competition from its adversaries inside the business.
The different opponents of Nucor Corporation inside the steel business are recorded underneath:
 Tangshan Steel
 Gerdau Steel
 Evraz Steel
 US Steel
 ThyssenKrupp Steel
 Riva Steel
 Nippon Steel
 JFE Steel
 Posco Steel
 Baosteel Steel
 Corus Steel
 Severstal Steel

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 Arcelor Steel
 Mittal Steel
In any case, this ought to likewise be said that Nucor Corporation has performed and dealt with
its business in calm a proficient way, which has caused the firm to endure the serious
competition effortlessly. The administration of Nucor Corporation needs to develop systems that
ought to be actualized to endure the up and coming competition sooner rather than later. (West,
Ford& Ibrahim,2018).
Strategic Fit Analysis
Strategy External Environment Internal Environment
Reducing Costs Significant price hike of
Energy and Raw materials lead
to external threat of cost
increment.
Fulfilling the requirements of
the customers regarding high
quality and lower cost
Utilizing technology
advancements.
Core competencies involving
technology, organizational
culture, continuous
improvement and technology
innovation
Cost reduction capability.
Optimizing existing operations
and processes constantly
Technological advancements
Minimizing the impacts of
price hike
Complying with environmental
regulations
Core competencies
Strengthening the business
position in the market by
enhancing profitability and
lowering the costs
Lean organizational structure
and empowerment.

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Expanding business using
Strategic Acquisitions
Consolidating industry trend
Bargaining prices
Negotiating labour agreements.
Minimizing the obligations of
retirement.
Strengthening business position
Experimenting with newer
technologies
Harvesting technological
advancements
Sharing capabilities,
competencies and resources
Enhancing HR abilities and
organizational culture.
Financial growth and strong
business positioning
Cultural compatibility
Strategies regarding Raw
material
Minimizing price hike impacts
Technological advancements
Strong culture
Technological compatibility
Venturing with Leading Global
Firms
Strategic and technological
advancements
Extended opportunities
Diversifying costs related to
raw materials
Utilizing Research and
Development of the venturing
firms
Successful and leading
organizational partners
Financial Strength
Technological advancements
4. Analysis of Porter's Five Forces
The underneath Porter's five forces examination shows that the steel business isn't an alluring
industry as buyer power and rivalry are both high and suppliers have medium power.

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The threat of New Entrants (or boundaries to section): Low
· Entering the steel-producing industry requires high capital ventures for assembling, IT, and
coordinations.
· Setting up supplier and client connections is tedious and expensive
· Entry can just happen through the advancement of new/improved innovations
Supplier Power: Medium
· Scrap metal supplies are contracting subsequently giving suppliers all the more evaluating
power
· Iron mineral supplies stay powerful, anyway, 3 significant suppliers’ control 75% of the
market and consequently, suppliers are picking up clout and combining quicker than the
steelmakers. (Warner, 2018).
· Vertical reconciliation inside the production network restrains the quantity of crude materials
suppliers
The threat of Product Substitutes: Low
· While innovation for steel substitutes keeps on advancing, the present condition with low
steel costs is more averse to empower the improvement of new substitutes.
Buyer Power: High
· Since steel is an item product, buyers have a great deal of power to set suppliers in opposition
to one another
· Companies inside the steel business can battle high buyer power through long haul contracts
and by having nearer nearness to clients, along these lines eliminating shipping costs.
The intensity of Rivalry: High
· The steel commercial center is combining, yet at the same time stays divided all around
· Steel suppliers have a high limit to accomplish economies of scale and in this manner
competition is high. (Subba, 2018).
4.1 External Opportunities and Threats
Opportunities
 Further vertical joining to secure crude material stock
 Opportunity to have Joint Ventures with other steel factories and companies

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 Expansion into global markets through key acquisitions
 The economic downturn can incite further import guidelines
 Opportunity to obtain 'more vulnerable' contenders during the downturn.
Threats
• Unionization
• Highly competitive, divided commercial centre
• Consolidated and powerful suppliers
• Shrinking request and diving steel costs
• Nucor saw as alluring takeover target (solid money position, low D/E)
• Lack of R&D makes Nucor helpless against contender innovation
B. INTERNAL ENVIRONMENTAL ANALYSIS
Freidrick opined that various components together and the procedures of the external and
internal condition have a major impact on the outlook of the associations. Driving or productive
associations, for instance, Nucor Corporation conventionally designs and executes diverse new
strategies for controlling the internal and external state of the association and the systems
moreover help them to utilize all the business and progressive assets, for instance, human, cash
effectively. Similarly, it is also basic to separate the frameworks executed by the associations
that they are using for settling the various levelled issues. Finally, looking over the present
approach will assist with preparing a crucial recommendation for improving the business.
● Different methods realized by Nucor Corporation are according to the accompanying:
● The administration of Nucor Corporation is contributing basically towards their
advancement improvement for diminishing costs. In addition, the HR division of Nucor
Corporation is in like manner thinking upon various components including delegate
inspiration, cooperation, and consistent updates towards gaining legitimate ground and
destinations. (Smart, Megginson& Graham, 2012).
● The association has offered hugeness to overhauling its current various leveled methods
and business exercises for improving quality and for constraining costs persistently.
● The administration of Nucor Corporation is furthermore thinking to develop their
business and relationship by including inside various essential acquisitions all around.
● The association has given the top requirement for executing various frameworks for
managing their unrefined materials in order to separate rough material supplies and to
reduce quality needs upon unrefined materials.
● The administration of Nucor Corporation is in like manner meandering with many
driving worldwide associations that are the pioneers of the steel business for using
separate supplies of rough materials and development headway

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1. Financial Analysis
Financial Objectives of Nucor Corporation
 To continue the solid financial situation of money position and low charge liabilities
 Holding the FICO score inside the steel business
 Looking after profitability
 Producing return overabundance of cost of capital
 Upgrading profit instalment (Coulter, 2010)
Growth Analysis
Investigating the financial development of the organization is significant for assessing the
presence of the organization. The organization Nucor Corporation has amazing financial
development and record of achievement, particularly inside the ongoing years. The
accompanying table and chart speak to the net deals, net profit, assets, liabilities, and values of
the organization (Dodaro, 2011). Thus, from that data the financial development of the
organization Nucor Corporation can undoubtedly be dissected.
By investigating the authentic realities and key operations for Nucor Corporation by contrasting
the key financial ratios and their adversaries including Steel Dynamics, Inc, Tenaris S.A,
Allegheny Technologies Incorporated, United States Steel Corporation (USS) and POSCO, the
real financial situation of Nucor can be assessed. There are the five-year normal Return on
Assets (ROA) and deals development, that will be broken down for contrasting with Nucor all
together with other steel rival organizations.
The calculations speak to that the ROA of Nucor Corporation is similarly superior to anything
their adversaries are. Be that as it may, the administration of Steel Dynamics, Inc. is doing
especially well for keeping up their ROA, which is presently driving the steel business to
advertise the situation. Be that as it may, the business development of the organizations Nucor
and Tenaris S.A, Allegheny Technologies Incorporated, United States Steel Corporation (USS)
and POSCO are diminishing essentially. Be that as it may, Steel Dynamics, Inc has still kept up
their solid financial position. (Rasmussen, 2015).
The financials explain that the organization Nucor Corporation and their key opponents
including Steel Dynamics, Inc, Tenaris S.A, Allegheny Technologies Incorporated, United States
Steel Corporation (USS) and POSCO have high Net EBITDA/DEBT and current ratio. All the
organizations are performing admirably and their organizations are gainful for them as the FICO
assessment is the key markers for the debt financial specialists. Notwithstanding, the FICO score
of Nucor is nearly acceptable than its rivals.
According to the calculations, the net deals of the organization ($14751.3 Million) and the net
income of the organization ($1757.7 Million) have essentially improved in the financial year
2019 contrasted with earlier years. Thus, it tends to be construed that the organization was
getting enough deals from the market and the organization had the option to upgrade their net
income. There are different purposes behind getting momentous achievement. Be that as it may,
from 2010 to 2019, many driving steel organizations including Mittal were not getting enough