Nucor Case Analysis Case summary: Nucor is the world’s largest recycler, recycling over 10 million tons of scrap steel annually. Nucor descended from auto manufacturer Ransom E. Olds, who founded Oldsmobile. The company evolved into the Nuclear Corporation of America, which was involved in the nuclear instrument and electronics business in the 50’s and early 60’s.
Over the next five years, Valley Sheet Metal, Vulcraft Corporation and U. S. Semi-conductor Products joined the Nuclear Corporation. After suffering several money-losing years, in 1964 F. Kenneth Iverson was installed as president. Management then decided to integrate backwards into steel making, and in 1972 they adopted the name Nucor.
Since then Nucor has established itself as a leader in the steel industry through efficiency and innovation. It now employs more than 7, 000 people worldwide and has experienced tremendous growth under its new CEO Daniel R. DiMicco. SWOT Analysis Strengths o Low Cost Producer o Employee/Managerial Relations Leading Innovator o Low Debt Load o Overall industry leader Weaknesses Dependency on scrap metal Company Profile – Nucor Corporation is the largest steel producer in the United States and had net sales of $11. 3 billion in 2004.
-Nucor’s origins are with auto manufacturer Ransom E. Olds, who founded Oldsmobile and then Reo Motor Cars. -The reorganization resulted in restructuring and eliminating money-losing businesses which left only the steel joist business called Vulcraft-Vulcraft operated in Florence, South Carolina and Norfolk, Nebraska-Management then decided to integrate backwards into steel making by building its first steel mill in Darlington, South Carolina in 1968-In 1972 the company adopted the name Nucor Corporation-By 1985 Nucor was the seventh largest steel company Situational Analysis General External Environment Sociocultural- Nonunion workers got paid more than 85% of the states they worked in-Recycled more than 10 millions tons of scrap metal annually Technological-Began using a twin shell electric furnace to increase production and lower costs and increase market share-Developed and implemented strip casting overseas to eliminate a step in the steel making process Demographic-Economic slow down in early 90’s led to a decreased demand for steel-By 1995 the steel industry was the best it was for 20 years Economic-Import values decreased for all steel products from 1998 to 1999-U. S. steel producers facing higher energy costs Global-Increasingly tough environmental rules-Cheaper imports for steel Industry Analysis – Nucor has established itself as a leader in the steel industry through efficiency and innovation. Industry Driving Forces of Change Increased demand on a global scale due to increase in manufacturing across the world, opposite in U.
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Whirlpool Corporation is the world's leading manufacturer and marketer of major home appliances. The company manufactures in 13 countries and markets products in more than 170 countries under major brand names such as Whirlpool, KitchenAid, Roper, Estate, Bauknecht, Ignis, Laden, Inglis, Brastemp and Consul. Whirlpool Corporation is also the principal supplier to Sears, Roebuck and Co. of many ...
S. Future trends in the Competitive Environment Increased competitiveness globally Attractiveness of the External Environment-Not many domestic competitors Strategic Analysis of Internal Resources and Capabilities 1. Key Factors necessary for Success in the Industry (KS) -Reducing operating costs 2. What is Business Level Strategy? -Technological improvements 3. What is Corporate Strategy? -Acquisitions and international ventures a. Resources o Physical-Over 22 plants o Innovation-Forefront of new technologies with great investments in R & D o Reputation-Good reputation as a long standing corporation since the 60’so Agility / Flexibility-Flexible in certain segments that involve steel with being in 22 divisions b.
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... human resources, by clearly establishing their strategy and utilizing their human resources effectively, 3) tapping innovation and technology for ... competitive advantage. Strong relationships can stimulate innovation, increase flexibility, reduce costs, and allow companies to respond quickly ... work condition which is very significant to their good habit development in their job position. Management ...
Capabilities / Value Chain Operations-Efficient due to leading technology o Marketing and Sales-Increasing sales with marginal increases in marketing o Service-Good quality because of emphasis as well as technological control so Human Resources-Admirable employee benefit and incentive compensation plano Technology-Develop new technology to be efficient and cost effective What is Sustainable Competitive Advantage? Increased market share due to competitive prices for quality product Performance Appraisal A. Profitability/Cash Flow-Good profitability with 14. 2% of return on equity in 2000 B. Liquidity-Current ratio of 2. 5 C. Financial Leverage-Good due to increase of debt to capital.
Asset Turnover-Moderate to weak turnover on assets at 1. 23 times, however it is good for the industry Does the company offer its investors better than average returns? -Yes because they have repurchased so many of their shares Does it have the resources to implement the strategy? -The corporation has the more than the necessary resources need to implement their strategy with the ability to barrow as well as currently having the cash on hand to make acquisitions or invest in new business on the global level SWOT Analysis Strengths Opportunities Good cost control due to technological advancements Global markets to meet increased demands Weakness Threats Slower than need international acquisitions or expansion Global competitors with lower costs manufacturing Recommended Strategy and Implementation Plan-Expand to China and more broadly Asia.
