Management and Steel Industry Essay

1.

List and lucubrate some strategic issues confronting NUCOR.Key strategic issues disputing NUCOR include statute law related to climate alteration. fluctuating cost and supply of Fe ore and bit steel. increasing sum of steel imports. production engineering betterments and economic failing. Changes in statute law could hold terrible impacts on the firm’s legion production installations and could be dearly-won to go compliant. The fluctuations in both the cost and supply of Fe ore and bit steel straight impact the firm’s profitableness because it is hard to go through those costs on to the clients due to the price-driven degree of competition in the steel industry.

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The rise of low cost steel imports increases the domestic U. S. supply which puts force per unit area on NUCOR. The house must remain at the forepart of technological progresss for the production and processing of steel in order to remain competitory.

Common for many houses and industries. economic failing is an issue that challenges NUCOR’s scheme because it can impact the demand for its reputable high quality steel merchandises.2. What are the cardinal elements of NUCOR’s low cost scheme? What factors have helped NUCOR accomplish a low cost place?Key scheme elements for NUCOR:Conservative fiscal strengthTeam-based civilization and decentralized operationsVertical integratingDiversificationInnovation – information engineering. velocity of design procedureClose propinquity to of import clientsFinancially stable employees – higher than mean rewards and non-discretionary inducement plansEmployee authorizationHonesty and openness within the companyNo employee lay-offs









Factors that have contributed to NUCOR’s low cost place: Strong. long-run relationships with outside parties for services such as research and development. buying recommendations.

advertisement. public dealingss. and legal or environmental ordinance conformity Steping off from the steel industry’s tradition of equalized cargo and offering all clients the gross revenues footings of monetary value plus existent transportation costs Not offering clients volume price reductionsFleet of about 150 trucks for merchandise bringingVertical integrating from joist fabrication into steel productionSteel production using mini-mill engineeringKeeping workstations responsible for placing constrictions to increase efficiencySophisticated computing machine plan is used to calculate accurate commandsImprovements in the thaw and casting procedures for steel production including “continuous casters”Flat organisational hierarchy





3. Please apply Porter’s Five Forces theoretical account to the steel industry. While making so. clearly identify who is behind each force and what the impact is of each force on the profitableness of the industry ( high/medium/low ) . At the terminal. besides provide a sum-up of all the five forces and suggest whether you think the steel industry is attractive or non.

The bargaining power of purchasers is high due to minimum merchandise distinction. low shift costs. extra capacity of steel production and big volume purchases.

The menace of replacements is average because replacements such as aluminium and plastic would non supply tantamount strength and lastingness but could still function the same intent as steel.The bargaining power of providers is low chiefly due to the merchandise being a trade good. high ratio of imported natural stuffs. and low shift costs.

The menace of new entrants is low due to the tendency toward consolidation and high sum of capital required to set up production/processing installations capable of accomplishing economic systems of graduated table.Rivalry is intense because the steel industry is mature with small distinction among merchandises and amalgamations both in the U. S. and across the Earth making elephantine companies with deep pockets.By and large talking. I think the steel industry is unattractive chiefly due to its adulthood. important capital demands and intense price-based competition that finally lead to low profitableness.4.

What are NUCOR’s resources and capablenesss?Resources:Team-based organisational civilizationAlliances with outside parties for support servicesJoint ventures withPhysical locations of workss in propinquity to identify clientsLoyal employees comprised of production workers. section caputs. support and administrative staff. and senior directionAdvanced mini-mill engineeringOwn fleet of about 150 trucks for distributionComputer plan to bring forth commandsPlants.

Millss. equipment. and machineryReputeFiscal capital










Capabilities:Management’s doctrine and leading accomplishmentsSuccessful quality control procedureFlat organisational hierarchy and incentive plan that keeps the work force co-op and productiveAcquisition directionMultidivisional coordinationSpeed of design procedure





5. Elaborate on some of the cardinal lessons you have learnt from the instance analysis.The most important lesson I learned from this instance analysis is that direction manner and civilization can be cardinal to being competitory. These truly are the two things that will give NUCOR sustainable competitory advantage because they are the most hard to happen and copy.

Building such an impressive employee trueness takes clip and can non be replicated easy. In add-on. the minimisation of the corporate bureaucratism is something that makes employees at all degrees feel comfy and as if they are portion of a household. I think there are many companies.

including the one I work for that could truly profit from following this direction manner.