Nucor

There are many competitive forces that are affecting Nucor Corporation. Some of the primary ones are the market size, number of rivals, and pace of technological change.

Nucor has been facing many industry challenges including the overall development of the industry. They are competing with foreign firms on cost and efficiency. Nucor has a low cost strategy because as they say their product is not necessarily very attractive. It does not have attractive or unique selling features other than its cost. The commodity of steel is in a very competitive market. Nucor understands that innovation and productivity are going to be key factors to keep their buyers satisfied with their prices. Nucor is facing many challenges with a growing world market and many of their competitors merging in order to create stronger more dominate

The core strategy of Nucor is that of cost leadership via the use of technology. Through innovation and the use of high quality technology to process their steel, Nucor was able to achieve this cost advantage.

Costco’s infrastructure skills and capabilities support operations for achieving low cost global leadership in warehouse retail sales and better than industry average. Costco’s culture strives to provide a limited variety of quality merchandise goods from private label and some well established brands.

Individual productivity calculator can be devised to reward those who work more in order to keep the parity issues from creeping in and at the same time providing growth and recognition to the employees as mentioned in the Herzberg two factor model (Newstrom, 2015). This model can be interpreted as a pioneering technique to motivate the team.

| 1) Reduced personnel costs2) Access to better and more specialized talent3) Allows for better growth potential, particularly concerning shared services

A great competitive advantage in the industry will be to have an integrated enterprise that is capable of R&D and large scale commercial manufacturing. In this context, Nucleon’s long term strategic goal should be to gain this competitive advantage by continuing to leverage its existing R&D competencies along with acquiring in-house manufacturing

Value Chain analysis evaluates each step business goes through from inception to finality. The goal is to maximize the value for the total cost. Costco's mission is to provide their members with quality goods and services at the lowest possible prices. The company’s mission, values and strategies suggest Costco uses a broad enterprise strategy which fits in the societal framework. To ensure employee motivation, Costco offers them a unique banquet of benefits. This include; paying health benefits for them, 50% higher wage, employee retention of over 90 percent, and maintaining employees even during recession periods (Costco, 2010). The Company’s strength is its primary value chains which split into two distinct functions: Demand fulfilment and Demand generation. Demand fulfilment includes input logistics, operations, and output logistics. Demand generation involves sales, marketing, and service department which breaks down into sub-tiers. Costco’s support activities include HRM, technology development, firm infrastructure and procurement. Costco’s weaknesses are difficult to pinpoint; one weakness is persistent low operating profit margins. Bigger profits can occur by not paying employee benefits and with demanding higher returns from their suppliers. The problem would be at what cost?  Costco receives cost advantages from value adding major (brand items) activities. However, it continues to experience a challenge

This report discusses the challenges that The Nucor Corporation faces during this era of social and economic climate change. Using Porter's Five Forces Analysis and Four Generic Strategies, we will assess the steel industry standards as it relates to the strategies implemented by the Nucor Corporation. We will also assess what Nucor’s strengths and weaknesses are, and if they will be able to continue

Upon Review of Nucor Corporation’s current findings, analysis of internal strengths and weaknesses, as well as a comparative analysis at the industrial level of the steel industry, the following includes a summary of findings and recommendations for Nucor Steel Corporation:

Nucor Corporation is made up of 11,500 teammates whose goal is to "Take Care of Our Customers." We are accomplishing this by being the safest, highest quality, lowest cost, most productive and most profitable steel and steel products company in the world. We are committed to doing this while being cultural and environmental stewards in our communities where we live and work. We are succeeding by working together.

Recommendation 3: Other than expanding internationally, Nucor should make joint ventures with suppliers to keep the cost down of the product. A lot of scrap that is used is imported so it would be a good idea for Nucor to utilize that to reduce costs of making their products.

Nucor is a classic case in how a firm can develop sustainable competitive advantages through resources that fit the VRIO criteria. It is worth noting that Nucor has achieved this in an industry that few would describe as attractive.

Nucor has created a company that is both internally and externally fit to the environment. The firm responds well to the driving forces of the industry and has opted to take a low-cost strategy with the relentless pursuit of innovation and strong employee productivity in order to combat the issues of the steel industry. In 2000, Nucor decided to expand its operations by acquiring new firms and new factories while continuing with its low-cost operations. The competitive strategy of Nucor has helped it become one of the leading manufacturers of steel and steel products in the United States.

In such an environment, if Nucleon chooses the first alternative and builds a new pilot plant, they will have the ability for future larger-scale development and in-house manufacturing will surely provide Nucleon with the control over process and quality procedures. However, as we can see on Exhibit 1 of the case, this option is very costly (roughly $7.4 M) considering that Nucleon only has $6.5 M at hand. Apart from the need for capital investment, building a new plant requires investing in “human capital” since Nucleon will need to hire additional R&D staff and experienced technicians. Both the building of the new plant and the trainings that current and future staff are time-consuming and involves a risk of having an idle plant if CRP-1 project turns out to be unsuccessful. Besides, when building a new plant, Nucleon will experience loss of focus from R&D activities, which was a core competency for the company, and the process uncertainty of shifting the fermentation procedure adds more onto the risk.