Case Study: Nucor Corporation - Challenges, Strategies, and Analysis

This case study analyzes Nucor Corporation, the largest steel producer in North America, focusing on its strategic management in a competitive environment. The analysis covers Nucor's mission, vision, and objectives, followed by an examination of its macro-environment using PESTLE analysis, assessing political, economic, social, technological, environmental, and legal factors. The study then applies Porter's Five Forces to evaluate the industry's competitive landscape. It explores Nucor's competitive advantages, including its cost-effective production methods and diverse product offerings. Further, the analysis delves into the company's financial health, resources, capabilities, and customer value proposition. The study concludes with an evaluation of Nucor's competitive situation, generic strategy, SWOT analysis, and strategic recommendations, providing a comprehensive view of its performance and future prospects. The case study highlights the challenges of low-cost foreign imports and weak demand for steel products, providing a thorough strategic analysis of Nucor Corporation's position in 2016.

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

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

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

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

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

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

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

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

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

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

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

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