Nucor Case
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Nucor case study
Executive summary
Nucor has grown up from being the first producer of the Oldsmobile 100 years ago, to being one of the biggest steel producers in the US. After dropping all unprofitable departments from the early years, only to focus on joist production and steel mills, Nucor has done well and achieved high profits over time. In 2007 net profits totaled $1,471,947,000, and the employee- body counted 18,000.
Right now Nucor’s main problem is an excess of steel in the market. Foreign steel is
being dumped in US, the market is flooded and supply exceeds demand. This decreases the steel
companies’ profits and puts pressure on them, forcing some of them into bankruptcy.
To analyze Nucor’s external and internal environment, we have used the 5-forces model
and VRIO. The steel industry has seen a vast change in the last forty years. Steel has encountered
competition from other materials in a number of applications over the past few decades.
Internally, the most important success-factors are an employee benefit system, a flat and lean
organizational structure with direct feedback and little bureaucracy, and lastly a corporate
mindset geared towards always acquiring and using new technology.
Our proposal is to strategically investigate their current joint venture suppliers. It is feasible to believe that there are now cheaper suppliers on a global scale. In order for Nucor Corp. to reduce their production costs, they must find a way to decrease the cost of their raw material.
Background
The history about Nucor started in 1897, when the company made the first Oldsmobile, under the name “Reo Truck Company”. The firm almost went out of business after the Second World War, but was saved through a merger and renamed Nuclear Corp. of America. The
company could not really find its niche, before Ken Iverson was put in charge in 1966. Iverson
turned the ship around, through getting rid of all unprofitable departments, only to focus on joist-...
Executive summary
Nucor has grown up from being the first producer of the Oldsmobile 100 years ago, to being one of the biggest steel producers in the US. After dropping all unprofitable departments from the early years, only to focus on joist production and steel mills, Nucor has done well and achieved high profits over time. In 2007 net profits totaled $1,471,947,000, and the employee- body counted 18,000.
Right now Nucor’s main problem is an excess of steel in the market. Foreign steel is
being dumped in US, the market is flooded and supply exceeds demand. This decreases the steel
companies’ profits and puts pressure on them, forcing some of them into bankruptcy.
To analyze Nucor’s external and internal environment, we have used the 5-forces model
and VRIO. The steel industry has seen a vast change in the last forty years. Steel has encountered
competition from other materials in a number of applications over the past few decades.
Internally, the most important success-factors are an employee benefit system, a flat and lean
organizational structure with direct feedback and little bureaucracy, and lastly a corporate
mindset geared towards always acquiring and using new technology.
Our proposal is to strategically investigate their current joint venture suppliers. It is feasible to believe that there are now cheaper suppliers on a global scale. In order for Nucor Corp. to reduce their production costs, they must find a way to decrease the cost of their raw material.
Background
The history about Nucor started in 1897, when the company made the first Oldsmobile, under the name “Reo Truck Company”. The firm almost went out of business after the Second World War, but was saved through a merger and renamed Nuclear Corp. of America. The
company could not really find its niche, before Ken Iverson was put in charge in 1966. Iverson
turned the ship around, through getting rid of all unprofitable departments, only to focus on joist-...