Tuesday, January 14, 2020
Nucor Corporation Essay
Assess how globalization and technology changes have impacted the corporation you researched. Nucor Corporation has been known as a leader in the steel production industry since it was founded in 1955 as Nuclear Corporation of America (www.nucor.com). In the steel production industry, globalization is the driving force that affects competition. Since the modern day steel industry is of a global scope, including the United States, Europe, Canada, Mexico, Japan, Brazil, China, and many other foreign countries, Nucor has made moves to counteract the impacts of globalization. In the mid-1900Ã¢â¬â¢s, the steel industry was plagued by overcapacity of foreign material due to the Ã¢â¬Å"dumpingÃ¢â¬ of foreign steel into the United States at cut-rate prices. As many domestic steel firms did not have the resources to compete with these foreign giants, Nucor was in the best position to defend against foreign competition with their low-cost German technology, and in 1955 they started their first international venture with a Brazilian steel production company, and built their first international steel mill in the state of Ceara. Nucor was also threatened by the leader in foreign imports to the United States, so they bought a Japanese-owned mill in New York. Today, Nucor Corporation is continuously attempting to meet the challenges of a globalized market by expanding through acquisition in hopes that this will strengthen their market position and become a more globally competitive organization. Steel is the modern technology of the building, automotive, and several other industries. Advances in steel production technologies can drastically change the industryÃ¢â¬â¢s make-up, helping mills to produce material at lower costs. Nucor Corporation has been and continues to be a pioneer of new production technologies that helps them to produce material competitive in quality and cost to that of foreign producers. Traditionally, steel mills were/are using energy-intensive blast furnaces to make material. In 1969, through the use of advanced technologies, Nucor was able to produce the first mini-mill which relies primarily on scrap metals instead of iron-ore and coke. With the introduction of electric arc furnaces instead of the traditional blast furnaces, Nucor has been able to increase market share through the more efficient, lower-cost production that has helped them to triple their output since the 1990Ã¢â¬â¢s. Apply the industrial organization model and the resource-based model to determine how your corporation could earn above-average returns. Resources| 1. Nucor is known as a price leader in the steel production industry.| | | | 2. Nucor is constantly adding new product offerings and advancements in technology to lower the costs of production.| 3. $1.1 billion in capital expenditures budgeted for 2013 (www.nucor.com).| | | | | 4. Managers that are knowledgeable about the current trends in the global market which helps them maintain the ability to overcome the negative effects of slow economic growth.| 5. Nucor has strong relationships with its suppliers and buyers.| | | | | 6. Nucor has its own fleet of 150 trucks to ensure on-time delivery and reduce transportation costs.| Capability| 1. Nucor follows a low cost provider strategy, as it aims to provide a product that meets industry standards at the lowest available price in the industry.| 2. Nucor maintains an expertise in the implementation of technology that will help them lower production costs while increasing profit margins.| 3. Nucor steel production mills are located strategically near customers all over the United States to cut down on transportation costs.| 4. Nucor has limited long-term debt that places them in a position to grow through acquisitions. | Competitive Advantage| While the rest of the steel production industry focuses on the import material that is flooding the market and causing domestic pricing to slip rapidly, Nucor is in a strong financial situation to gain an advantage over their competitors by spending their available capital on growth and technology.| An Attractive Industry| The steel trade/import firm industry.| | | | | | | | Strategy Formulation and Implementation| Nucor can use their resources and capabilities to exploit them through a foreign import trade firm. Being known as a price leader in the steel production industry, Nucor can take advantage of the acquisition of a trade firm to bring foreign material into the United States without setting prices so low that they disrupt domestic pricing. This will allow them to buy steel from foreign producers at a low price and sell it to domestic consumers at a price high enough that it will not cause a decrease in domestic material, eventually increasing profit margins for Nucor Corporation.| Assess how the vision statement and mission statement of the corporation influence its overall success. Nucor Corporation is focused on their customers: their employees, shareholders, and the people that buy and use their products. NucorÃ¢â¬â¢s vision is to be the safest, highest quality, lowest cost, most productive, and most profitable steel and steel products company in the world. This vision is the foundation of their mission: Ã¢â¬Å"Take care of our customersÃ¢â¬ (www.nucor.com). Nucor has established an internal Ã¢â¬Å"fitÃ¢â¬ with their employees and managers which include those that strive to improve efficiency while establishing strong relationships among employees, based on the Nucor values such as honesty, autonomy, trust, communication, and self-motivation. This type of value-added employment undeniably leads to short-term growth and long-term success. Those that do not uphold this Ã¢â¬Å"fitÃ¢â¬ will eventually leave on their own terms. This shows NucorÃ¢â¬â¢s strength in management values, and provides a competitive advantage. Nucor Corporation also takes care of the people that buy their steel by constantly rising to the challenges of advancing technology to be able to produce quality material at a low cost. This type of value-added service paves the way for customer loyalty, eventually leading to long-term success in the industry. Evaluate how each category of stakeholder impacts the overall success of this company. Stakeholders are the individuals, groups, and organizations who can affect the firmÃ¢â¬â¢s vision and mission, and whom are affected by the strategic outcomes achieved, and have enforceable claims on the firmÃ¢â¬â¢s performance (Smith, Ireland, Hoskisson, 2013). These stakeholders are classified into three different groups: Capital Market, Product Market, and Organizational. Capital Market Stakeholders are comprised of the shareholders and the lenders. Shareholders can use tactics to pressure management into making certain decision for the corporation, and if they become dissatisfied they can sell their stock in the company. In the case of Nucor, the major lenders approved the risks of developing and implementing the electric-arc furnace technology through financing. In turn, being able to produce lower cost material has helped Nucor Corporation to have higher profit margin, thus producing a higher dividend for investors. Product Market Stakeholders include the customers, suppliers, host communities, and unions. Nucor has the ability to produce low-cost, high-quality steel that keeps customers loyal to their brand, even if the price rises. Being able to sell lower cost products at a higher price helps Nucor to maintain supplier loyalty as well because they are able to pay their scrap suppliers a higher price. Nucor also has locations all over the United States that employ over 20,000 people, which in turn helps these host communities through employment and revenues. Lastly, Organizational Stakeholders are the employees of Nucor. I would venture to say that the organizational stakeholders of Nucor Corporation are the bread and butter of the company. Their value-added services and product knowledge, mixed with the Nucor Ã¢â¬Å"fitÃ¢â¬ , can either make or break the success of the company. References Hitt, Hoskisson, Ireland (2013). Strategic Management Concepts and Cases: Competitiveness and Globalization. Cengage Learning: Mason, Ohio. www.nucor.com. Retrieved 7/10/2103.