Nucor Corporation in 2001: Pursuing Growth in a Troubled Steel Industry

1912 Words Jul 18th, 2005 8 Pages
Nucor Corporation in 2001: Pursuing Growth in a Troubled Steel Industry

Table of Contents

Introduction 3
Nucor's History 3
Current Strategy and Future Expectation 4
Analysis and evaluation 4
Dominant Economic Characteristics of the Steel Industry Environment 4
Competition analysis in the Steel Industry 5
SWOT Analysis 6
Recommendations 9

Nucor's History
Nucor Corporation is the second-largest steel producer in the United States and has had net sales of $4.6 billion in 2000. Nucor recycles approximately 10 million tons of scrap steel. It operates in 9 states and produces carbon and alloy steel in bars, beams, sheet, and plate; steel joists and joist girders; steel deck; cold finished steel; steel
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These new mega-steelmakers could easily outmuscle their U.S. competitors. The largest steel producer in the US, USX-U.S. Steel group was already at number 11, with a threat of falling even below with consolidation in the industry. The terrorist attacks on September 11, 2001, reduced the demand for steel even further. Efforts were underway to negotiate a worldwide reduction in steel production.
In addition to cheap imports the U.S. steel producers were facing higher energy prices, increasingly tough environmental rules and a changing cost structure among producers. The steelmakers around the world were watching the development of continuous "strip casting" technology, which was believed to be the next leap forward for the industry. This would eliminate the slab-casting stage and all of the rolling in the hot mills. Strip casting was facing some technological challenges but was already being adopted around the world outside the U.S.

Competition analysis in the Steel Industry
The pressures form substitutes, suppliers and new entrants are low, as shown in figure 1 below. Since buyers are less in number and buy in huge quantities, the competitive pressure is high. The intensity of the rivalry is very high especially after the consolidation of international steel makers. The number of players is less and there is huge excess capacity. The product is standard and not much can be done to create

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