Nucor
Based on the case study “Nucor in 2009”, Nucor’s business strategy can be categorized as cost leadership. There are clear evidence in the case that shows Nucor using an integrated set of actions to produce at the lowest cost, while still maintaining an acceptable level of quality compared to their competitors. In this critique, the Value-chain model will be used to illustrate how Nucor aligns their activities to this business strategy.
I/ Primary structure
Regarding Inbound Logistics, Nucor has a highly efficient system to link supplier’s products with their production processes. They have long-tern contracts strong relationships with their suppliers like constructions companies and scrap steel suppliers all over the country who supply them with the most suitable materials they need. In addition, Nucor also went into the steel market to supply cheap material for their own plants. This helps Nucor reduce spoilage cost by saving the time and resources from using the wrong type or quality of materials.
In terms of Operations, Nucor construct an efficient production system. They build their own equipment to have high control over cost of production and productivity of the machinery. All of it was done with minimal manpower, usually hired from the rural areas, to save cost.
In addition, Nucor strives for both internal and external economies of scales to reduce production costs. They constantly engage in joint venture, as well as merger and acquisitions to expand their capacity. This way, they can exploit cost saving that comes with large production, as well as shared knowledge and technology. Moreover, Nucor values productivity so much that if a plant is producing expensively, it might be deemed unsuccessful and closed.
The alleged claim that Nucor violated clean-air rules, although negative, also goes to show that they might have over-looked environmental concerns because it is usually expensive to adhere to the regulations. Hence, it is likely that they
I/ Primary structure
Regarding Inbound Logistics, Nucor has a highly efficient system to link supplier’s products with their production processes. They have long-tern contracts strong relationships with their suppliers like constructions companies and scrap steel suppliers all over the country who supply them with the most suitable materials they need. In addition, Nucor also went into the steel market to supply cheap material for their own plants. This helps Nucor reduce spoilage cost by saving the time and resources from using the wrong type or quality of materials.
In terms of Operations, Nucor construct an efficient production system. They build their own equipment to have high control over cost of production and productivity of the machinery. All of it was done with minimal manpower, usually hired from the rural areas, to save cost.
In addition, Nucor strives for both internal and external economies of scales to reduce production costs. They constantly engage in joint venture, as well as merger and acquisitions to expand their capacity. This way, they can exploit cost saving that comes with large production, as well as shared knowledge and technology. Moreover, Nucor values productivity so much that if a plant is producing expensively, it might be deemed unsuccessful and closed.
The alleged claim that Nucor violated clean-air rules, although negative, also goes to show that they might have over-looked environmental concerns because it is usually expensive to adhere to the regulations. Hence, it is likely that they