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Strategic Management In Nucor Essay

7576 words - 31 pages

Nucor is one of U.S.'s biggest steelmakers and its history began with joist production in the 1966. It has made a quarterly profit since then which is truly a remarkable feat. The report aims to conduct strategic analysis and recommendations on its three main industries in order of information available namely, the raw steel, joist and fastener industry.Findings from the external analysis reveal that Nucor experiences substantial macro-forces acting on them (global, macroeconomic, political/legal, technological) and generally operating in an indifferently attractive industry (i.e. neither attractive nor unattractive).It then proceeded on to an intensive company analysis to eventually narrow ...view middle of the document...

S. steel producers, Nucor needs to contend with the challenges facing them in the near future. With globalisation widespread, the weight of international trade barriers has been assuaged and Nucor is no longer battling in their domestic league; rather, they are now intrinsically part of a world league where competitors are stronger, growing more aggressively and able to sell at lower prices. As world output increases quickly, the prices of supplies (iron ore and scrap steel) are bound to rise. The management at Nucor has to acknowledge that strategies which have worked for decades need to be revised or risk jeopardising their position.This report seeks to assess Nucor's external and internal environments to obtain a clear picture of their current standings from a strategic standpoint. Recommendations will correspondingly be drawn to build on their advantages and attenuate their deficiencies.Assumptions, Limitations and MethodologyEven though case information ranges from the 1960s to 2005, the latest available information will be used as far as possible in the spirits of relevancy. Where information from a particular time period cannot be used in isolation to represent an analytical motive or is inadequate, generalisations would be made utilising all available information.The United States (U.S.) steel sector would be the main focus in the industry analyses as per the case unless otherwise stated. On grounds that information from the case may prove insufficient for a thorough objective analysis, hypotheses would be inferred with logical reasoning.2.0External AnalysisFigure A: The External Environment2.1Macro-Environment AnalysisIts constituents are six forces namely global, macroeconomic, technological, political/legal, demographic and socio-cultural forces (Elenkov, 1997).Global ForcesAs articulated in the introduction, globalisation has led to the removal of international trade barriers which means that 'home advantage' is all businesses have against foreign competitors. Collaborations, joint ventures, mergers, acquisitions and bootstrapping are some examples of global forces at work to capitalise on international trade and to multiply productivity, boost efficiency, and increase market share, all in shorter time.Macroeconomic ForcesWhen the economy is favourable, demand goes up, prices and profitability increase, more jobs are created, more wealth is circulated, and industry or organisational growth is possible. The opposite is true during an economic decline where consumer confidence is low and companies are cutting back on costs, engaging in price wars. For the purpose of this case study analysis, the general economic outlook is assumed to be stable growth i.e. exchange, interest and inflation rates do not fluctuate significantly and economy is performing fairly.Technological ForcesFrom the Agrarian to the Industrial and now the Information age, advancements in technology have been witnessed to be exponential. Developments in IT and...

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