...Assignment #4: HRM Issues/Diversification Strategies: Nucor Corporation Strategic Management, Business 599 Introduction In this paper, we will present an analysis of Nucor Corporation in Case # 10 (Arthur, Strickland, & John, 2010). The paper will discuss the trends in steel industry and how it may impact Nucor’s strategy. In addition, the paper will describe the organizational and management philosophy at Nucor. Furthermore, the paper will identify 3 HRM issues related to strategy implementation and recommend actions to address these issues. Recommendation whether a related or unrelated diversification should be used will also be discussed. Finally, we will be looking at Organizational structure issues the company would need to address to implement the strategy. Trends in Steel Industry and Its Impact on Nucor’s Strategy An analysis of the steel industry trends shows that from the period starting from 1910 till the year 1960, the first position in terms of producing the largest amount of steel in the whole world was captured by United States of America. During this period it was observed that almost half of the total steel production around the globe was produced by USA. But things started to change after the countries like Japan and China came to the fore. Again, in the recent years, India as well as Brazil has shown tremendous performance in the steel production industry. According to the recent steel industry trends, China is the largest steel producing...
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...Caso N0 1: NUCOR CORPORATION (A) Cuestiones 1. ¿Por qué funcionaba Nucor tan eficientemente? a. ¿Se debe al sector? b. ¿Es el efecto de las acerías compactadas? c. ¿Son las economías de escala debidas al poder de mercado? d. ¿Son ventajas en los canales de distribución? e. ¿Son ventajas en la obtención de materias primas? f. ¿Es una ventaja en tecnología? g. ¿Es una ventaja de localización? h. ¿Es el resultado de un nombre de marca muy fuerte? i. ¿Es la elección de la estrategia de Nucor? j. ¿Es la habilidad de Nucor para ejecutar su estrategia? Considero que Nucor funcionaba tan eficientemente debido a una alianza de las respuestas a todas estas interrogantes; se menciona una localización de sus instalaciones en las áreas rurales a lo largo de todo EEUU, estableciendo fuertes lazos con las comunidades locales y los trabajadores, utiliza compensaciones al pagar altos salarios atrayendo así a trabajadores con mayor dedicación y cualidades. Buscaron factores que permitieran seleccionar entre localizaciones competidoras, situando sus operaciones en estados con estructuras impositivas que fomentaban el crecimiento de la empresa y políticas reguladoras que favorecían el objetivo de Nucor de no tener organizaciones sindicales en sus fábricas. Como estrategia desarrollo características como la innovación continua, los equipos modernos, el servicio individualizado a los clientes y el compromiso con la fabricación de acero y productos derivados...
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...About First Mover Advantage Innovation and uncertainty • Technological uncertainty • Uncertainty regarding the technological features of the product – Standards – Dominant design • Market/Demand uncertainty • Uncertainty regarding the size and growth rates of the markets for new products – Potential uses – Substitute products – Complementary products First Mover Advantage A first mover is a firm that takes an initial competitive action. Advantages of first movers If successful, the firm earns above-average returns until other competitors are able to respond effectively. Develop customer loyalty. Harley-Davidson has been able to maintain a competitive lead in large motorcycles due to intense customer loyalty. Disadvantages of first movers High risk High development costs High demand uncertainty First mover market entry • Advantages Above-average returns until other competitors respond effectively Start down the learning curve earlier Opportunity to gain customer loyalty Opportunity to set standards Disadvantages • Uncertainty about demand • High development costs • Risk of adopting a losing standard (Beta/VHS) • • • Forces Shaping Industry Competition Threat of new Entrants Bargaining power of Suppliers Rivalry among Existing Competitors Bargaining power of buyers Threat of substitute products Forces Defining Competition In Mini Steels Rivalry • Diversification in product lines, ex pipes • Move towards high quality bars, structural...
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...------------------------------------------------- Case Analysis Case Analysis Format Directions Required Format for Writing of All Assigned Cases Simply download the format exactly as it is and type your responses to each of the sections DO NOT DELETE ANY SECTION DO NOT TYPE WITHIN THE SECTION BOX Isaiah T. Tyler Name_______________________________________________ Nucor Steel Corporation Case___________________________________________ ------------------------------------------------- Section I ------------------------------------------------- What is the setting of the case i.e. the type of industry, the firms, operations, and nature of the environment/market[s]? ------------------------------------------------- ------------------------------------------------- What appears to be the issue(s), concern(s), problem(s), challenge (s) and/or opportunities and their significance for the organization? ------------------------------------------------- Nucor Corporation with 24 plants/divisions and 8,000 employees, operated in nine states recycling more than 10 million tons of scrap steel annually. Producing carbon and alloy steel in bars, beams, sheet, and plate; steel joists and joist girders; steel deck; cold finished steel; steel fasteners; and metal building systems, the corporation was known as the most modern and efficient, having streamlined organizational structure, incentive-based compensation and rigorous quality systems in the United States. Nucor Corporation entered the...
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...Association for Small Business & Entrepreneurship 35th Annual Conference Case Analyses ASBE 35th: Proceedings Page -400- Association for Small Business & Entrepreneurship 35th Annual Conference 1 NUCOR CORPORATION 2008-2009 Thomas M. Box Pittsburg State University Pittsburg, KS 66762 Phone: 620-235-4582 Email: tbox@pittstate.edu Warren D. Miller Beckmill Research, LLC Drawer 1158 Lexington, VA 24450-1158 Phone: 540-463-6200 Email: wmiller@beckmill.com ASBE 35th: Proceedings Page -401- Association for Small Business & Entrepreneurship 35th Annual Conference 3 ABSTRACT Nucor Corporation 2008-2009 is a strategic management case appropriate for first-year MBAs or seniors in an undergraduate capstone course. The focus of this case is the strategy of the most successful steel-maker in the United States as of 2008/2009. It has a difficulty level of five. Secondary issues include Porter’s Five-Forces Framework of industry analysis and the effects of the global economic slowdown in the last quarter of 2008 and the first quarter of 2009 on Nucor’s business. The case is designed to be taught in a single 75-minute class and is expected to require two to three hours of outside preparation by students. In order to facilitate students’ understanding of the economics of accounting figures, we have rearranged the balance sheet so that “earning assets” equal “permanent funding sources.” For real wealth to be created, the average return on earning assets must equal or...
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...Running Head: NUCOR CORPORATION: COMPETING AGAINST LOW-COST STEEL IMPORTS Nucor Corporation Sheri Johnson Dr. James Glenn BUS 599-014016 November 28, 2010 Assignment 4 Abstract This paper will explore articles that I researched regarding Nucor Corporation as well as research that I conducted from online articles and material that I read from the book. This paper will discuss the trends in the steel industry and how it may impact Nucor’s strategy; discuss the organizational structure and management philosophy at Nucor. Identify three HRM issues related to strategy implementation and recommend actions to address these issues. I will be given my own recommendations for related or unrelated diversification that the company would need to address. 1. The trends in the steel industry Nucor Corporation is the second-largest steel producer in the United States and has had net sales of $4.6 billion in 2000. Nucor recycles approximately 10 million tons of scrap steel. It operates in 9 states and produces carbon and alloy steel in bars, beams, sheet, and plate; steel joists and joist girders; steel deck; cold finished steel; steel fasteners; metal building systems; and light gauge steel framing. The company emerged from near Bankruptcy in 1966 to become one of the fastest-growing steel. The steel industry is a dynamic, innovative sector, which is constantly adapting and refining itself to become more competitive in the market. The industry does this...
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...Assignment: #4 Case #10 Nucor Corporation BUS 599 Discuss the trends in the steel industry and how it may impact Nucor’s strategy. After the 2008 financial and economic crisis, the world steel industry’s recovery has been uneven, but it is recovering faster than expected. The global steel production declined from 129 million metric tons (mmt) in March 2011 to 127 million metric tons in April 2011. However, production increased 5 percent from April 2010. As of the April 2011 first quarter reporting, the United States has produced 28.3 mmt, which is up 6.8% from the same period last year [ (Leybovich, 2011) ]. “In a report earlier this month, the Organisation for Economic Cooperation and Development (OECO) forecasts that global demand for steel would increase 6 percent in both 2011 and 2012. Growth over the next few years is expected to be considerably faster in emerging markets than in developed ones [ (Leybovich, 2011) ].” Nucor is the second largest steel producer in the United States, only behind U.S. Steel. Nucor is considered a low-cost steel producer in the U.S. and the most efficient and technologically advanced steel producer in the world [ (Thompson/Strickland/Gamble, 2010) ]. Nucor is North America’s largest recycler, 17 million tons in 2010, and uses the scrap steel as the raw material to produce steel and steel products [ (SEC filings Nucor Corporation Form 10-K, 2011) ]. Employing multiple approaches, Nucor’s growth strategy...
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...Association for Small Business & Entrepreneurship 35th Annual Conference Case Analyses ASBE 35th: Proceedings Page -400- Association for Small Business & Entrepreneurship 35th Annual Conference 1 NUCOR CORPORATION 2008-2009 Thomas M. Box Pittsburg State University Pittsburg, KS 66762 Phone: 620-235-4582 Email: tbox@pittstate.edu Warren D. Miller Beckmill Research, LLC Drawer 1158 Lexington, VA 24450-1158 Phone: 540-463-6200 Email: wmiller@beckmill.com ASBE 35th: Proceedings Page -401- Association for Small Business & Entrepreneurship 35th Annual Conference 3 ABSTRACT Nucor Corporation 2008-2009 is a strategic management case appropriate for first-year MBAs or seniors in an undergraduate capstone course. The focus of this case is the strategy of the most successful steel-maker in the United States as of 2008/2009. It has a difficulty level of five. Secondary issues include Porter’s Five-Forces Framework of industry analysis and the effects of the global economic slowdown in the last quarter of 2008 and the first quarter of 2009 on Nucor’s business. The case is designed to be taught in a single 75-minute class and is expected to require two to three hours of outside preparation by students. In order to facilitate students’ understanding of the economics of accounting figures, we have rearranged the balance sheet so that “earning assets” equal “permanent funding sources.” For real wealth to be created, the average return on earning assets must equal or...
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...Title of the Case: Nucor in 2009 Time Context or Period: 1905-2009 of Nucor Summary of the Case: In 1905, Ransom E. Olds, creator of the Oldsmobile, had a dispute with stockholders and left his own company — Olds Motor Works. He soon formed REO Motor Company, which evolved into the Nuclear Corporation of America and ultimately, Nucor. In 1962, this was the year that Nuclear Corporation made two moves that would soon change the company and ultimately the American steel industry. First, they acquired a company called Vulcraft, an unassuming producer of steel joists and girders. Second, to run Vulcraft, they hired a man named Ken Iverson who would soon emerge as one of the great visionaries and mavericks in American industry. Barely staving off bankruptcy, Nuclear appointed Ken Iverson as its new president. He acted quickly to put the company on a course toward profitability including selling off inefficient divisions. Not long after we shed our conglomerate business model to become a highly focused steel producer, The board of directors elected to change the name of the company from Nuclear Corporation of America to simply Nucor. Since then, Nucor has contributed over 70 million dollars to Scholarships and Educational Disbursements. It is a source for millions of dollars for educational funding. To this day, every child of every Nucor teammate is entitled to educational funds from the company. Now, Nucor is one of the leading steel producers in the United States. Later...
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...MGMT – 702-101 Nucor Case Study Instructor: James Farmer By, Arulraj Rajaram – 300729443 Strategic Management Date: 29th July, 2013 Page |2 1) Rolled steel is a commoditized product. Commoditized products are extremely difficult to differentiate and distinguish (in terms of marketing and sales methods) from your competitor’s products. Name and explain at least three strategies that Nucor Corporation has employed to differentiate its products and services, from its competitors. A) Nucor Corporation has employed various strategies to differentiate its products and services, from its competitors over the years. They have differentiated their products and services so well that they offer steel users with a wide range of steel products. The three strategies that Nucor has employed are: Low Cost of Production Strategy: Nucor constantly worked on attaining low cost of production by improving their production efficiency. Nucor constantly made investments in modernization of their plants, and new technology in the production of steel. They adopted automated technology that helped in fewer requirements of employees to operate. Thereby, increasing the productivity of labor and decreasing the cost. Nucor also employed electric arc furnaces and fewer production steps which lead to low energy costs. Also, the management system of Nucor was designed in a way that led to increased innovation by the employees and quick decision making. All these practices helped Nucor to have a competitive...
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...MEMORANDUM FROM: X SUBJ: “Nucor in 2013” Case Analysis EXECUTIVE SUMMARY The success of Nucor results in correct strategy that managers selected. Nucor Corporation is the largest steel manufacturer in the United States. The steel industry is a fragmented industry. There are many marginal competitors existing in the steel industry. Competitions are high. Nucor is in mature stage of the business life cycle. In this stage, Nucor needs to gain more market share. I strongly recommend Nucor develop product diversity, and spread great company culture to earn sustainable profit growth. ANALYSIS The steel industry in U.S. is not a great industry to begin business for a company due to the economic environment. A bunch of steel companies are facing bankruptcy. However, Nucor breaks the barrier and has strong development in this environment. Industry Analysis. The U.S. steel industry is facing recovery from global recession period, and is in the worst economic period dating back to early 1980s. Also, a number of steel companies have faced bankruptcy, reorganization, or no longer operating. Moreover, because of overcapacity, the steel industry has become a burden that U.S. is willing to get rid of. That is to say, trying to break the siege of the status quo in the steel industry is a challenge to Nucor. Porter’s Five Forces Model. Porter’s five forces model can help identify the current state of Nucor in the steel industry. First of all, new entry to this industry...
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...Nucor Corporation: Competing against Low-Cost Steel Imports Week 8 Assignment Bus 599 Nucor Corporation is today one of North America largest steel maker company. Although the company has a strong position in the steel market today, things have not always been as positive. According to Crafting & Executing Strategy, Nucor was first known as Nuclear Corporation of America, a company involved in the nuclear instrument and electronic business in 1950’s and early 1960’s. Facing bankruptcy, the company changed direction and decided to invest in the stable steel-joist business. The new name, Nucor Corporation, came along with the change in 1972 to break away from the nuclear image and embrace the new venture. This transformational change was due to the vision of new CEO and president, F. Kenneth Iverson. His strategic initiatives revealed to be a blessing as Nucor Corporation has been successfully growing since its creation. Discuss the trends in the steel industry and how it may impact Nucor’s strategy. The electric arc furnace technology was introduced in 1960. The “mini-mills” was limited when compared to integrated mills in the industry. In addition, the operating costs of companies are lower compared to integrated mills because they use electric arc furnaces that can produce various steel products to minimize production costs. (Thompson, Strickland, & Gamble, 2010). Nucor Corporation started using thin-slab casting during the 1980’s and it was their...
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...ASSIGNMENT #4: HRM ISSUES/DIVERSIFICATION STRATEGIES Introduction This paper presents the analysis of the Nucor Corporation case (Thompson, Strickland, Gamble, 2010, Nucor Corporation, p. C-193). Nucor is one of the largest producers of steel in the United States with a production capacity that exceeds 26 million tons. Nucor was among the first steel companies in the United States to use electric arc furnaces to melt recycled steel. In 2007, Nucor recycled nearly 10 million cars in its production processes, the equivalent of one SUV every four second (Nucor.com). Trends in the Steel Industry Steel Industry Trends are not at all static in this industry and is a very dynamic. The country that is producing the maximum amount of steel may not be in the first position in the coming years. Analysis of the Steel Industry Trends show that from the period starting from 1910 until the year 1960, the first position in terms of producing the largest amount of steel in the whole world was captured by United States of America. During this period, it was observed that almost half of the total steel production around the globe was produced by USA. However, the scenario started to change after the countries like Japan and China came to the fore. Again, in the recent years, India as well as Brazil has shown tremendous performance in the steel production side. According to the recent Steel Industry Trends, China is the largest steel producing nation. However, it has also been seen that the...
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...Nucor Corporation (A) We are a cyclical business... Basically when you are at the peak of the cycle—times are good, interest rates are low, people are building—our margins increase. When we go to the trough, of course, the margins are squeezed. But over the last 25 years Nucor has never had a losing quarter. Not only a losing quarter, we have never had a losing month or a losing 1 week. —John D. Correnti, President and CEO, Nucor In 1998, Nucor was a Fortune 500 company with 6,900 employees and had sales of $4.3 billion in steel and steel-related products. Its chairman, F. Kenneth Iverson, had headed the company for more than 30 years. During his tenure, the steel industry faced a number of problems, including foreign competition, strained labor relations, and slowed demand for steel (related in part to the substitution of alternative materials). Despite these industry challenges, Nucor’s sales during Iverson’s tenure grew at an annual compound rate of about 17 percent per annum. Selected comparative financial data are shown in Exhibit 1. In different years, both Iverson and Nucor CEO John Correnti were named Steelmaker of the Year by New Steel magazine. History Nucor traced its origins to auto manufacturer Ransom E. Olds, who founded Oldsmobile and, later, Reo Motor Cars. Through a series of transactions, the company Olds founded eventually became the Nuclear Corporation of America, a company involved in the nuclear instrument and electronics business in the 1950’s and...
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...HR Strategy Evaluation: Case Study of Nucor Corporation Executive Summary: Human resource management in the alignment of business strategy is essential to achieve firm’s goals and objectives. Nucor is a US based steel manufacturer and known to its innovation with low cost and high productivity. Nucor’s success is explained through its effective HR strategies of lean management structure, teamwork, less formalization, recruiting and reward. All sixteen operating facilities of Nucor work independently with only four management levels that help to achieve its business strategy of low cost and innovation. Rewards are paid based on employee productivity. However, at Nucor productivity targets are achievable and less than industry averages. Moreover, rewards are also awarded onto team performances that ranges from 8 members to 20 members. This stimulate team member to assist each other to achieve such goals. There is no job description and no performance appraisal as Coblin HR manager thinks that it is wastage of time. He also attributed absence of job description to the changing nature of work at Nucor. At Nucor employees are selected primarily on the basis of ability to work with coworkers with less supervision. In short Nucor HR strategies of lean management, decentralization, rewards and less formalization assist to achieve its business strategies of low cost, innovation, productivity and high performances. However, criticisms are also made to some of Coblin’s strategies....
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