Management and Steel Industry Essay Example for Free

Management and Steel Industry Essay1. List and luxurious some strategic issues facing NUCOR.Key strategic issues challenging NUCOR include legislation related to humour change, fluctuating cost and egress of iron ore and scrap trade name, increasing amount of steel imports, payoff technology improvements and economic weakness. Changes in legislation could have severe impacts on the firms numerous production facilities and could be costly to become compliant. The fluctuations in both the cost and supply of iron ore and scrap steel directly impact the firms profitability because it is difficult to pass those costs on to the customers receivable to the determine-driven level of competition in the steel industry. The rise of low cost steel imports increases the domestic U.S. supply which puts pressure on NUCOR. The firm must stay at the front of technological advances for the production and touch on of steel in order to stay competitive. Common for many firms and industries, economic weakness is an issue that challenges NUCORs strategy because it can impact the demand for its reputable high quality steel products.2. What are the trace elements of NUCORs low cost strategy? What factors have helped NUCOR achieve a low cost vex?Key strategy elements for NUCORConservative financial strengthTeam-based culture and decentralized operationsVertical desegregationDiversificationInnovation information technology, speed of bod processClose proximity to important customersfinancially stable employees higher than average wages and non-discretionary incentive programsEmployee empowermentHonesty and openness within the companionNo employee lay-offsFactors that have contributed to NUCORs low cost position Strong, long-term relationships with outside parties for services much(prenominal) as research and development, purchasing recommendations, advertising, public relations, andlegal or environmental regulation compliance Stepping remote from the steel industrys tradition of equalized freight and offering all customers the sales terms of price plus actual shipping costs Not offering customers volume discountsFleet of nearly one hundred fifty trucks for product deliveryVertical integration from joist manufacturing into steel productionSteel production utilizing mini-mill technology attribute workstations responsible for identifying bottlenecks to increase efficiencySophisticated computer program is used to compute accurate bidsImprovements in the melting and casting processes for steel production including continuous castersFlat organizational hierarchy3. Please put on Porters Five Forces model to the steel industry. While doing so, clearly identify who is behind severally force and what the impact is of each force on the profitability of the industry (high/medium/low). At the end, besides provide a summary of all the five forces and propose whether you think the steel industry is seductive or not.The bargaining power of buyers is hig h cod to minimal product differentiation, low switching costs, tautologic capacity of steel production and large volume purchases. The threat of substitutes is medium because substitutes such as aluminium and plastic would not provide equivalent strength and durability but could still serve the selfsame(prenominal) purpose as steel.The bargaining power of suppliers is low in general due to the product creation a commodity, high ratio of imported raw materials, and low switching costs.The threat of new entrants is low due to the trend toward consolidation and high amount of seat of government required to establish production/processing facilities competent of achieving economies of scale.Rivalry is intense because the steel industry is mature with little differentiation among products and mergers both in the U.S. and crosswise the globe creating giant companies with deep pockets.Generally speaking, I think the steel industry is unattractive primarily due to its maturity, sign ificant capital requirements and intense price-based competition that ultimately lead to low profitability.4. What are NUCORs resources and capabilities?ResourcesTeam-based organizational cultureAlliances with outside parties for support servicesJoint ventures withPhysical locations of plants in proximity to headstone customersLoyal employees comprised of production workers, department heads, support and administrative staff, and senior managementInnovative mini-mill technology receive fleet of nearly 150 trucks for distributionComputer program to generate bidsPlants, mills, equipment, and machineryReputationFinancial capitalCapabilitiesManagements philosophy and leadership skillsSuccessful quality control processFlat organizational hierarchy and incentive program that keeps the workforce cooperative and productiveAcquisition managementMultidivisional coordinationSpeed of design process5. Elaborate on some of the key lessons you have learnt from the case analysis.The close to sign ificant lesson I learned from this case analysis is that management style and culture can be key to being competitive. These really are the two things that will give NUCOR sustainable competitive advantagebecause they are the most difficult to find and imitate. Building such an impressive employee loyalty takes time and cannot be replicated easily. In addition, the minimization of the corporate bureaucracy is something that makes employees at all levels feel comfortable and as if they are part of a family. I think there are many companies, including the one I work for that could really advantage from adopting this management style.