Nucor In 2014 Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Introduction

The paper attempts to describe the problems faced by Nucor in the US steel industry. The paper also attempts to describe detailed analysis of the problem through the application of SWOT analysis, PESTLE analysis, Porter’s five forces analysis, along with the value chain analysis of the company. Furthermore, the paper also aims to provide the key success factors for Nucor in order to succeed in the steel industry. Moreover, the paper aims to shed light on the various alternative strategies and options to resolve the problems that have been identified. Lastly, recommendation is provided amongst the best strategic alternatives along with the implementation plan for the organization.

Problem Statement

The main problem that has been faced by the company to combat against the low cost imports and the excess of steel in the US market. Foreign steel is being imported in the United States which has flooded the market. Along with this, the steel companies are feeling severe price pressure due to which it has prompted many some of the steel companies to file for bankruptcy. The supply of steel has exceeded the demand in the market which has also allowed Nucor along with other steel producers to lower their profit margins.

Analysis

SWOT Analysis

Strengths

Nucor is the largest steel producer in the region of North America with the capacity to produce 27 million tons of steel. The company is also considered as the world’s 14^th largest steel producer according to the number of steel shipped in the year 2013. Furthermore, the core competitive advantage of Nucor is based on its five-part growth strategy which includes acquisition of companies, the construction of new plants, continuous upgrades of the plant through continuous innovation along with the application of cost leadership strategies, expanding in to new markets through joint ventures, and mastering the control over raw material costs.

The management philosophy of the company is to delegate authority to employees so that they could make quick decisions. The organizational structure is highly decentralized as most of the day-to-day decisions are taken by the specific plant manager instead of the higher management of the company. Along with this, the employees are retained in the organization because of the good relations of employees with the human resource management department. The particular relationship is based on four key principles which includes that the employees would be able to earn according to their productivity, employees must feel confident since their job is secured, employees shall be treated fairly, and employees have the power to appeal if they feel they are being treated unfairly.

Weaknesses

The company has a low market diversification as most of its production plants are situated in the North American region which increases the dependency of the company in the US market. The company is exposed to the fluctuation in the US market whenever the demand for steel is decreased in the country. The company does not have an alternative avenue to secure their profits or drive their revenues.

Furthermore, the shipping cost of the company is higher due to which it ultimately affects the low-cost product strategy of the company. The limited presence in the worldwide market has also limited the company in attaining huge profits and to exploit other potential markets. Moreover, the company would have been able to gain more popularity if it had explored various potential foreign markets.

Opportunities

Since the company has expertise in acquisition and joint venture, therefore Nucor could expand in foreign markets through the strategy of acquisition of those steel companies who are failing to create an impression in the market. This would allow the company in acquiring the company below the market prices. Furthermore, even in the US market various companies are being bankrupted due to the cheap steel imports, therefore acquiring these companies would enhance the growth for Nucor and will make it a much larger company than before.

Nucor In 2014 Case Solution

The company shall support for the trade law against the dumping of low cost foreign steel in the US market. The particular scenario has resulted the company with the decreased profit margins. Therefore, Nucor shall support the government in enforcement of the trade laws which restricts foreign low cost steel imports in the US markets. The idea shall base upon limiting the foreign steel dumping through legal means..................

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