Nucor at a Crossroads Case Study Essay Example

Nucor at Crossroads

Q1. What is bothering Mr. Iverson?
 Whether to go for CSP plant developed by SMS or sustain

with Hazelett thin-slab caster??  Potential benefits of CSP
 Cost reduction  Increase in efficiency  Consent of the project team  Nucor will gain maximum share of low end flat sheet business  SMS is highly confident on CSP that it will improve on

company’s own developmental effort.  Discount of $10-$20 million on immediate purchase.

Q1. What is bothering Mr. Iverson?
 Constraints of using CSP plant
 Expensive  Difficulty in operating  It is still in embryonic stage  Technological leapfrogging  First mover advantage wouldn’t sustain for long.

Q2. What are the strengths & weaknesses of Nucor?
 Strengths  Strong market position with 2.1 million tonnes of

production capacity.  “Nucor Culture”.  Decentralized management philosophy  Performance based compensation  Egalitarian benefits  Customer service and quality  Highly efficient labour force.  Employee’s loyalty to the firm.

Q2. What are the strengths & weaknesses of Nucor?
 Weaknesses  Decentralized profit center  Decisions being taken at the division level will lead to

divisions competing against each other.  No dedicated R&D team.  No long-term strategic vision of plan.  Presence only in the US market.

Q3. what are the opportunities & threats in US steel market?
 Opportunities
 Most steel companies in the US are in major cities and much

higher operating costs.  Import’s share is low in flat sheet segment.  52% of total steel consumption is in flat sheet segment.  Opportunities for joint ventures

Q3. What are the opportunities & threats in US steel market?
 Threats
 Heavy competition in the industry with excess capacity  Only experienced players can enter and sustain in the market.  Plastic industry taking over market share of steel in future.  Raw material availability  Technology

Q4.If you were Mr. Iverson, what