Management and Steel Industry Essay

1. List and elaborate close to strategic issues facing NUCOR.Key strategic issues ch allenging NUCOR include polity related to climate change, fluctuating make up and supply of iron ore and microchip brand, increasing amount of steel imports, drudgery technology improvements and economic failing. Changes in legislation could have severe impacts on the tightens legion(predicate) achievement facilities and could be apostrophizely to become compliant. The fluctuations in both the cost and supply of iron ore and scrap steel directly impact the firms profitability because it is difficult to pass those costs on to the customers referable to the price-driven level of competition in the steel industry.The rise of scummy cost steel imports increases the domestic U.S. supply which puts pressure on NUCOR. The firm essential stay at the front of technological advances for the production and moveing of steel in order to stay competitive. Common for many firms and industries, econo mic weakness is an issue that challenges NUCORs strategy because it can impact the demand for its reputable high quality steel products.2. What are the expose elements of NUCORs humiliated cost strategy? What factors have helped NUCOR achieve a low cost position?Key strategy elements for NUCORConservative financial strengthTeam-based tillage and decentralized operationsVertical integrationDiversificationInnovation knowledge technology, speed of design processClose proximity to important customersfinancially stable employees higher than average wages and non-discretionary incentive programsEmployee empowerment candor and openness within the companyNo employee lay-offsFactors that have contributed to NUCORs low cost position Strong, long-term relationships with outside parties for services such as research and development, purchasing recommendations, advertising, public relations, andlegal or environmental regularisation compliance Stepping away from the steel industrys traditi on of equalized loading and offering all customers the sales terms of price plus genuine shipping costs Not offering customers volume discountsFleet of intimately 150 trucks for product deliveryVertical integration from joist manufacturing into steel productionSteel production utilizing mini-mill technologyHolding pissstations responsible for identifying bottlenecks to increase energySophisticated computer program is used to compute accurate bidsImprovements in the melting and casting processes for steel production including continuous castersFlat organizational hierarchy3. Please apply Porters Five Forces instance to the steel industry. While doing so, clearly identify who is behind each advertize and what the impact is of each force on the profitability of the industry (high/ strong suit/low). At the end, also allow for a summary of all the fiver forces and propose whether you think the steel industry is attractive or not.The negotiate power of buyers is high cod to mi nimal product differentiation, low shimmy costs, excess capacity of steel production and large volume purchases. The scourge of substitutes is medium because substitutes such as aluminum and plastic would not provide equivalent strength and durability but could still serve the selfsame(prenominal) purpose as steel.The bargaining power of suppliers is low primarily due to the product being a commodity, high ratio of imported crude(a) materials, and low switching costs.The threat of new entrants is low due to the rationalise toward consolidation and high amount of capital required to establish production/processing facilities capable of achieving economies of scale.Rivalry is intense because the steel industry is advanced with little differentiation among products and mergers both in the U.S. and across the globe creating fiend companies with deep pockets.Generally speaking, I think the steel industry is unprepossessing primarily due to its maturity, satisfying capital requir ements and intense price-based competition that finally lead to low profitability.4. What are NUCORs resources and capabilities?ResourcesTeam-based organizational growAlliances with outside parties for support servicesJoint ventures withPhysical locations of plants in proximity to key customersLoyal employees comprised of production workers, department heads, support and administrative staff, and senior focusingInnovative mini-mill technologyOwn fleet of nearly 150 trucks for statistical distributionComputer program to generate bidsPlants, mills, equipment, and machineryReputationFinancial capitalCapabilities perplexitys philosophy and leadership skillsSuccessful quality control processFlat organizational hierarchy and incentive program that keeps the workforce joint and productiveAcquisition managementMultidivisional coordinationSpeed of design process5. refine on some of the key lessons you have learnt from the case analysis.The some significant lesson I learned from this ca se analysis is that management style and culture can be key to being competitive. These really are the cardinal things that will give NUCOR sustainable competitive advantagebecause they are the most difficult to find and imitate. Building such an impressive employee loyalty takes eon and cannot be replicated easily. In addition, the minimization of the corporate bureaucracy is something that makes employees at all levels feel comfortable and as if they are part of a family. I think there are many companies, including the one I work for that could really benefit from adopting this management style.