1. What are the primary competitive forces impacting U.S. steel producers in general and the producers like Nucor that make new steel products via recycling scrap steel in particular? Please do five-force analysis to support your answer.
There has been a lot of pressure to the steel manufacturing companies due to the excess supply of steel products not only by the US producers but also through foreign steel that has been “dumped” in the US. Nucor had to make sure that Nucor cooperation survives the ferocious competition through various strategies that are analyzed through the Porter five forces analysis.
Rivalry among competing steel producers.
It is difficult for buyers to distinguish steel products from one steelmaker company to the other
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What driving forces do you see at work in this industry? Are they likely to impact the industry’s competitive structure favorably or unfavorably?
There is new and advanced technological innovation in the manufacturing of steel through electric arc furnace technology, the direct casting of carbon steel and thin slab casting that has made companies like Nucor to thrive. With the use of low-cost steel manufacturing technology, this move is likely to increase the competitive forces put up by the mini-mills which put producers such as Nucor at a favorable spot
3. How attractive are the prospects for future profitability of U.S. steelmakers? Should Nucor consider expanding in this type of industry environment? Why or why not?
Technological evolution in zones such as advanced computer systems, physical models, use of sensors and artificial intelligence have been incorporated in all stages of manufacturing, and this has not only reduced human labor but also ensures the production of steel is of higher quality, range of products and low
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However, Nucor is a low-cost steel producer who utilizes recycled steel and, there is a chance to succeed in this type of business. This is because with a low production cost the sales increase and so does the market share. Even so, international steel suppliers such as China who provide steel products at of a much lower cost in the US have to be regulated to gain a more significant market share.
Nucor should think about expanding in this line of business through the construction of new steel plants and new and strategic acquisitions of smaller and cash trapped steel mills at a bargain price and turn it into a competitive steel producer. For instance, many profits have been generated over the previous five years from the assets that Nucor built or acquired during the years 2001 to 2003
4. What type of strategy has Nucor followed? Which of the five generic strategies discussed in Chapter 5 is Nucor
BlueScope Steel Australia and New Zealand (BANZ) is a manufacturing company that produces a range of flat steel products for the Australian and New Zealand domestic market. BANZ was formed in July of 2011 which saw the amalgamation of company sections; Australia and New Zealand Steel Making Business (ANZSMB), LYSAGHT and Distribution Business. This amalgamation was followed by a major organisational restructure which ultimately led to the closing down of Number 6 Blast Furnace and resulted in around 800 job losses at the Port Kembla works and 200 job losses at the Western Port works in Victoria. The aim of this project is to outline the rationale for the restructure and to provide a strategic analysis of the impact of the restructure on BANZ’s current market position. This will be achieved by first analysing the economic climate pre-restructure and evaluating the managerial decisions that led to the restructure. It will then explore the current economic climate in relation to BANZ to determine whether these strategic managerial decisions were sound. Finally the report will outline BANZ future developments and determine if the company will continue to be competitive in the future.
Nucor Corporation was the largest manufacturer of steel and steel products in North America, with a production capacity of approximately 27 million tons. On an international scale, Nucor was ranked as the 14th-largest steel company in the world based on tons shipped in 2013. Amongst the five generic business strategies, Nucor is known as a low-cost producer, with a known competitive advantage of innovative steelmaking technology. The purpose of this paper is to perform a business analysis of Nucor Corporation by analyzing it using management tools such as SWOT, PESTEL, and Porter’s Five Forces (Thompson, Peteraf, Gamble, & Strickland III, 2014).
Steel Corporations Forge Tyranny The 1960s marked a time of great change, turmoil, and innovation in American history. President John F. Kennedy worked hard to ensure the best for the citizens of the United States and that is why, when steel corporations raised their prices 3.5 percent in a time of economic distress, Kennedy responded with outrage. In his speech to the American people on April 11, 1962, President John F. Kennedy used a plethora of rhetorical strategies to persuade the American public to join his crusade against the greed of large steel companies. President Kennedy begins his address by immediately stating his opinion on the issue; that the actions of steel corporations “constitute a wholly unjustifiable and irresponsible defiance of public interest.”
Also, the competition between existing players in this industry is high. There are about 619,000 metal enterprises in the USA in 2005 (IBISWorld, 2007).There are many companies that produce different kinds of metal products in the market. Besides, the bargaining power of buyers is high because product difference for the buyers of the metal products is small. It is not easy to differentiate the quality of one metal product from another. In addition, the cost of switching for the buyers is low. The number of substitutes of metal products is also high thus the buyers have great bargaining power.
Nucor is the largest steel manufacturer in the United States. It remains a profitable company despite being in one of the most cyclical industries in the economy. Nucor enjoys this success for several reasons, employee relations, quality, productivity, and aggressive pursuit of innovation and technical excellence. Nucor’s strategy is that of a low cost provider, they know they are selling a commodity and understand their competitive edge in the industry is lowering prices through innovation and productivity. The company operates primarily in two business areas, steel mills and steel products.
Hoerr, J. P. (1988). And the wolf finally came : the decline of the American steel industry. Pittsburgh, PA: University of Pittsburgh Press.
The extraordinary power of the steel industry to shape the life of its communities and the people in them remain...
Industry Analysis – Nucor has established itself as a leader in the steel industry through efficiency and innovation.
Threat of substitutes in market as best quality is not always a priority for some customers as they are price sensitive.
· The buying industry hinders the supplying industry in their development (e.g. reluctance to accept new releases of products),
There are two reasons why a firm may perform well in an industry, either 1) the industry is attractive to any firm 2) the firm is better and outperforms it’s rivals. Porter’s theory therefore can be used to discover the markets that are attractive to firms or, in those which aren’t breaking down the five forces so a strategy for success can be developed. In general the firm with be more profitable if each of the forces is low, that is to say there is a low threat of new firms entering, if buyers and suppliers have little power over the firm, if there is a low threat from substitute products and if competitive rivalry is low.
1. Intensity of rivalry among competitors- there is intense rivalry among the automobile industry. There is only a handful of companies in the world, and it is war to survive.
This paper will first discuss the development of the steel industry. Next, it will examine steel, and in the impact it had on the transportation industry. Finally, it will discuss systematic management practices of this time and how they gave birth to the scientific approach that is still in use today.
The industrial revolution began in Europe in the 18th century. The revolution prompted significant changes, such as technological improvements in global trade, which led to a sustained increase in development between the 18th and 19th century. These improvements included mastering the art of harnessing energy from abundant carbon-based natural resources such as coal. The revolution was economically motivated and gave rise to innovations in the manufacturing industry that permanently transformed human life. It altered perceptions of productivity and understandings of mass production which allowed specialization and provided industries with economies of scale. The iron industry in particular became a major source of economic growth for the United States during this period, providing much needed employment, which allowed an abundant population of white people as well as minorities to contribute and benefit from the flourishing economy. Steel production boomed in the U.S. in the mid 1900s. The U.S. became a global economic giant due to the size of its steel industry, taking advantage of earlier innovations such as the steam engine and the locomotive railroad. The U.S. was responsible for 65 percent of steel production worldwide by the end of the 2nd World War (Reutter 1). In Sparrows Point: Making Steel: the Rise and Ruin of American Industrial Might, Mark Reutter reports that “Four out of every five manufacturing items contained steel and 40 percent of all wage earners owed their livelihood directly or indirectly to the industry.” This steel industry was the central employer during this era.
Is it a big change to support what's going to happen to steel industry in the future?