CASE STUDY ON NUCOR CORPORATION

Case Study on Nucor Corporation

Case Study on Nucor Corporation

Introduction

Fortune 500 company, Nucor, has been described by Business Week as “Soaring on Wings of Steel,” and for good reason (Foust, 2005). Nucor Corp. has been operating in the highly concentrated steel manufacturing industry in the U.S. for over forty years and has remained profitable in times when its competitors were filing bankruptcy.

Furthermore, the company has held its position as a market leader during times when external environmental forces were threatening its sustainability. However, as the industry continues to rapidly globally consolidate, some argue that if Nucor doesn't grow quickly they might be taken over by foreign makers trying to gain entry into the United States (Barnes, Frank and Beverly Tyler, 2005).

Case Study on Nucor Corporation HRM Issues

This Nucor Corp. case analysis will take an in depth look at three different levels of the external environment and examine issues affecting the firm specifically, as well as the steel industry as a whole. In addition, it will analyze the internal environment of Nucor and identify core competencies. The internal examination will lead into a SWOT analysis which will identify Nucor's strengths, weaknesses, opportunities, and threats.

The general environment consists of elements within society that have an influence on an industry and the firms that operate within it. Unfortunately, firms have no control over the different segments of the general environment, but these elements have a major effect on their ability to operate and survive. However, if firms are able to gather information about each segment and develop a strategy according to what they find, they can be gain an advantage (Hitt, Duane Ireland, Robert Hoskisson, 2007).Of the six segments of the general environment, there are four that are directly affecting the steel industry and Nucor. They are:

Economic Segment

Because of the critical role played by steel in infrastructural and overall economic development, the steel industry is often considered to be an indicator of economic progress. Furthermore, the conditions of an economy can have a direct affect on the industry. For example, the United States economy is currently negatively affecting the steel industry both domestically and abroad. The United States is viewed by some as being in a recession. According to an article from the Wallstreet Journal, written in January 2008, this recession or “weakened economy” is responsible for the drop in fourth-quarter earnings of several U.S. steel companies (Mathews, 2008).

Higher costs of raw materials, transportation, energy and restructuring are supposedly responsible for this drop. “The weakened economy is also expected to initiate cost increases for steelmaking materials including purchased scrap, coke and alloys. For example, the price of coal in the U.S. is expected to rise to $125 a ton, which represents a 5%-to-10% increase from year-earlier levels” (Mathews, 2008).

Even though demand is weaker, prices remain firm and are rising. This is largely due to tight inventories and steelmakers trying to pass on higher steelmaking costs. Many domestic steelmakers in the ...