Nucor steel case study
The costs gap widens, volumes are lower, and customers are better served, moving the chain value up. Knowledge accumulation contributes to increasing competitive advantage. Some substitutes like aluminum maybe a poor alternative to steel, but is still a threat in the lighter industries.
Nucor at a crossroads cash flow analysis
When we go to the trough, of course, the margins are squeezed. The company's policy of exercising control over factories through information technology and periodic reports also help it in gaining first-mover advantage. It would be expected that these entrepreneurs be groomed in the next years. The great leader that Nucor relied upon was Kenneth Iverson, who changed Nucor from a nuclear energy company into a steel company. On the other hand, processes were developed on their own. Wholesale buyers may sacrifice namesake and features for costs especially in China or India. The fact that Nucor is mainly in America limits its growth. Nucor knows that half of the investment in new ideas will not yield usable results, so there is equipment that was bought used and discarded. The individual plants allowed for team like competitions between plants to see who could be the best performer. The steel industry is very developed due to the early demand for the high amounts of steel back when the steel industry started. The resource-based view RBV is an economic tool used to determine the strategic resources available to a firm. China would do this because then it would eventually under price foreign competitors and run them out of business. This practice is also a strong motivator for employees entrusted with the task. This is good because it shows the reaction to the recession, and it shows that Nucor bounced back the best.
Nucor is a very well entrenched brand. Related Papers. The company had four layers of management and responsibility was pushed to the lowest level possible.
This new process converted iron ore to pig iron at a lower cost and higher quality than previously known pig iron producing technologies. P13 7. Steel is a standard homogenous product and is easily copied.
By investing in joint ventures, Nucor was able to grow internationally with out the full capital risk. Another joint venture was three other companies in Australia.
Distribution channels used by Nucor, made the company able to settle the lowend products transactions directly with its customers like manufacturers and bypass some of the distribution costs. Each plant was individually responsible for its profits. The technologies for making steel are constantly changing and this allows for more efficient and therefore cheaper steel products.
These two types of knowledge derive from different sources.
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