Nucor Steel Case Solution & Answer

Nucor Steel Case Solution

·        Capabilities:

Nucor’s qualities incorporate most elevated efficiency, least cost structure and a high benefit (30 years of persistent profits) in the business and fantastic work administration relations. Nucor’s shortcoming, as compared to its rivals, is more presentation to fleeting misfortunes and impermanent difficulties coming about due to risk taking. The vast incorporated steel makers are relatively solid as far as size, built up client base and economies of scale are concerned.

·        Core competency:

Nucor’s focus is onthe amount of products created. Nucor was positioned eighth universally with 20.3 tons in 2006. Nucor could help fortify its position as it is not a long way from the world’s second biggest steelmaker (Nippon Steel, Japan) of 34.7 tons. With its ROE shrewd, Nucor is much more grounded than its rivals with 29.38 when contrasted with Commercial Metals Co.’s 22.63 and U.S Steel’s 17.79. With ROA being insightful, Nucor is additionally much more grounded than its rivals with 15.6 when contrasted with 8.33 and 7.13. Nucor is more monetarily solid than its rivals with a present proportion of 2.06 when contrasted with 1.69 and 1.59.

A case report is designed to analyze Nucor’s financial performance and to compare with other steel mills. Nucor is one of the leading organization that works on the demand of customers with minimum margin. The total revenue generated by Nucor in 2015 was 16,439,276 out of which the total cost is 14,858,014 and the gross profit of Nucor is 1,581,262.

Net income which is applicable of Common shares of Nucor in 2015 was 357,659. Nucor is continuously trying to increase its work force to generate more profit and to serve the public of America

Nucor Corporation’s financial statements are prepared on quarterly basis to evaluate the company’s performance and sales growth.

1.2.        Swot Analysis

1.2.1.  Strength:

  • Unique management philosophy:
  • Cost control in a product market with little room for differentiation.
  • Innovation
  • Strong and efficient Administration
  • Continuous adaption of new technology. (Ali, 2016)

1.2.2.  Weakness:

  • Exposure to fluctuation in price of scrap steel
  • Lack of market diversification
  • Too much dependence on U.S market
  • High Shipping cost
  • Narrow location strategy.

1.2.3.  Opportunities:

  • Adopt HISMELT Technology or liquid iron project
  • Market for plant outside the USA
  • Diversify of business
  • Auto Industry previously experienced
  • Low operating cost

1.2.4.  Threats:

  • Rise of China Steel market all over the world
  • Increasing labor cost
  • Increasing debt on equity ratio
  • Fast growing imports

1.3.        PESTEL of Nucor Steel:

1.3.1.  Political/Legal:

The steel business has seen poorwork relations since the late nineteenth century with fatalities to workers taking strikes. Most of the workers are spoken to by the United Steel Workers of America. Another issue is the incorporated steel makers have recorded charges against merchants of dumping steel costs, pointing the finger at them particularly Japan, for declining pieces of the pie. Nucor’s plant in Hertford County was situated on the banks of a fishery that required reclamation in a law went in 1997……………………..

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