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Problem: How to stay competitive and pursue growth in a troubled steel industry?
Competition: Nucor Corporation is the second-largest steel producer in the United States and has had net sales of $4.58 billion in 2000. Nucor recycles approximately 10 million tons of scrap steel. Nucor is pursuing long-term growth and wants to improve its position from the second-largest U.S. steelmaker by overtaking U.S. steel, who is the industry leader.
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 differentiation, so the basis of competition is cost. There is a huge pressure to keep up with the emerging technology.
SWOT Analysis
Strengths
? Nucor is the second-largest producer of steel in the U.S. It enjoys the brand name advantages, and has well established relations with the suppliers and the buyers.
? Nucor is very good at identifying cost cutting opportunity. It has always kept the cost low, maintaining a very high quality. It integrated backwards and started producing steel to reduce the material cost for joists. Nucor plants have always been situated near the markets they serve.
? Nucor had always been aggressive pursui ...