Nucor's Strategy in the Steel Industry
The Steel Industry
BUS 599
Strategic Management
1. Discuss the trends in the steel industry and how it may impact Nucor’s strategy
According to Economy Watch, it has been stated, “that from the period starting from 1910 till the year 1960, the first position in terms of producing the largest amount of steel in the whole world was captured by United States Of America. During this period it was observed that almost half of the total steel production around the globe was produced by USA. But the scenario started to change after the countries like Japan and China came to the fore” (Economy Watch, 2010). This is one of the major trends that Nucor was realizing when it came to the Steel industry around the world. Steel was becoming a vastly used product in every developed nation around the continent. This would have a great impact on companies who did and did not produce steel from their beginnings. Nucor began to produce steel after the new CEO was installed. Kenneth Iverson was appointed as the new CEO from a similar position he held with a company known as Vulcor, which happened to dabble in the steel industry before hand. Iverson realized he had great “ opportunities to capitalize on newly emerging technologies to produce steel more cheaply” (Thompson, Strickland, & Gamble, 2010) with his new company at his control. The steel industry was starting to evolve and there was a great chance that Iverson could get it to work with Nucor. “Nucor embarked on a four part growth strategy that involved new acquisitions, new plant construction, continued plant upgrades and cost reduction efforts, and joint efforts” (Thompson, Strickland, & Gamble, 2010). Nucor thought it would make smart business sense if they were to purchase other operation plants that were already capable of production that only needed to be minimally upgraded. According to Crafting & Executing Strategy, Nucor had over eleven separate acquisitions that help increase the different
BUS 599
Strategic Management
1. Discuss the trends in the steel industry and how it may impact Nucor’s strategy
According to Economy Watch, it has been stated, “that from the period starting from 1910 till the year 1960, the first position in terms of producing the largest amount of steel in the whole world was captured by United States Of America. During this period it was observed that almost half of the total steel production around the globe was produced by USA. But the scenario started to change after the countries like Japan and China came to the fore” (Economy Watch, 2010). This is one of the major trends that Nucor was realizing when it came to the Steel industry around the world. Steel was becoming a vastly used product in every developed nation around the continent. This would have a great impact on companies who did and did not produce steel from their beginnings. Nucor began to produce steel after the new CEO was installed. Kenneth Iverson was appointed as the new CEO from a similar position he held with a company known as Vulcor, which happened to dabble in the steel industry before hand. Iverson realized he had great “ opportunities to capitalize on newly emerging technologies to produce steel more cheaply” (Thompson, Strickland, & Gamble, 2010) with his new company at his control. The steel industry was starting to evolve and there was a great chance that Iverson could get it to work with Nucor. “Nucor embarked on a four part growth strategy that involved new acquisitions, new plant construction, continued plant upgrades and cost reduction efforts, and joint efforts” (Thompson, Strickland, & Gamble, 2010). Nucor thought it would make smart business sense if they were to purchase other operation plants that were already capable of production that only needed to be minimally upgraded. According to Crafting & Executing Strategy, Nucor had over eleven separate acquisitions that help increase the different
References: Channon, D. (n.d.). Conglomerate strategy. Retrieved from http://www.blackwellreference.com/public/tocnode?id=g9780631233176_chunk_g978140511828610_ss13-1 Economy Watch. (2010, June 30). Steel industry trends. Retrieved from http://www.economywatch.com/world-industries/steel-industry/trends.html Thompson, A. J., Strickland, A. J., & Gamble, J. E. (2010). Crafting & executing strategy the quest for competitive advantage: Concepts and cases. (2009 Custom ed.). Boston: McGraw-Hill Learning Solutions.