Diversification Strategies

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Diversification Strategies

Issues/ Diversification Strategies


In this paper, we try to focus on the issues/ diversification strategies. In this research, I review the Nucor corporation case study, to answer the following questions. The paper discusses the trend in the steel industry and how it impacts Nucor's strategy. The paper highlights the organizational structure and management philosophy at Nucor. The paper identifies three issues that are related to strategy implementation and recommend actions to address these issues. The paper is based on the situation and finally recommends what sort of diversification should be used by the company. From the recommendations, the paper identifies the organizational structure that the company would need to address to implement that diversification.

The trends in the steel industry and how it may impact Nucor's strategy

Due to the weakened global economy, a decline has been seen in the demand of the steel industry. The inclination of this industry is only possible if there is an incline in the construction industry and the automotive industry because these industries are majorly dependant on the production of steel. Since the main major buyers of steel are related to construction and automobile, it is only possible that the steel industry's growth is tightly linked with the growth of the other two. To maintain the profit levels of the company, NUCOR has to ensure and hope for the growth of construction and automotive industry.

This industry faces three major problems that should be overcome to ensure growth of the field. The growth of the industry is easily achievable through the control of the problems faced by it. The first problem is the slow demand of steel. Since the demand of steel is very low, it's production and sales are proportional. It is only being purchased by the major steel utilize which restricts the growth of the industry strongly. The second problem is the declination of steel related industries. Due to the decline in the construction and the automotive industries, which are the major buyers of steel in the market, a proportional decline in the steel industry has been observed. And the third problem deals with the labor and company relationships (Wonacott, 2003).

This has been a serious issue because the labor required in this industry is a lot and the consequent pay of these workers is low. This leads to friction between the workers and the leaders of the company. All these problems are consistently prevalent and cause major hindrances in the growth and development of the steel industry in a very strong way. Another way to increase steel sales and profits is to inhibit any import of steel from foreign countries. This barrier on the import can ensure the sales of the steel produced from the companies functioning within the borders and the quality and price can be maintained.

The sales would increase and help in the stability of the market for the local steel producers. This barrier to imported steel can lead to serious global economic problems, so this step cannot be ...
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