Presentation1 Nucor Steel

7/28/2019 Presentation1 Nucor Steel

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http://www.youtube.com/watch?v=RuP0d7WOXwQ

What Nucor

Does
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1897 Reo Truck Company

1955 Nuclear Corporation ofAmerica

1966 Nucor


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High-tech conglomerate

Ken Iverson restructured thecompany

Engaged in divestment of

high-tech business

Focus on profitable

business: steel


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1. Steel joist plants

Steel frames forbuilding

2. Mini-mill technology

Smaller scale

production


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Consolidated business in

first 20 years

Successful in the 1980s Mid 2000s 2nd largest

American steelmanufacturer

2009 posted first ever loss

in 42 years


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Structure the industrystructureConduct the strategies a firmchooses to implement

Performance how a firmperforms based on the structureand conduct


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Steel and Iron Industry

Three main competitors:

ArcelorMittal USA, Inc.Commerical Metals Company

United States Steel Corp.

Less competitors = moreopportunities


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1.Mini-Mills

2.Decentralized

Management

3.Incentive System


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Societal Level

Productive and allocative

efficiency

Employee Level

Work Environment


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Primary Activities

Purchase of raw material

Raw material Policy

Production and distribution

Market and Marketing


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In the beginning of the operation ofstill mills Nucor was purchasing the

raw materials from the foreignmarket. As the Vulcraft division ofNucor grew, Nucors division itself

became its own raw materialsupplier. Its strategy of using thescrap substitutes lowered the cost

of steel product.


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Nucor brought forth lot of changes in theirmanufacturing system. Recycled steelscrap and other metallics are melted in

electric arc furnaces and poured intocontinuous casting systems

Due to new manufacturing systemNucors current capacity reached to25,000,000 tons. Nucor had its own 150trucks (more now) to ensure the on time

delivery to the different states of UnitedStates.


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Up to 2005 the corporate staff of Nucor consistedof less than 45 employees. Nucor did not haveany strong infrastructure of different layers ofmanagement.

There was not clear structure of Human Resourcedepartment in Nucor. In 2000 the new CEOAyecock added some of the positions as hethought would be necessary. James Coblin wasthe vice president for HR department.

Nucor basically had the incentive system throughwhich all the employees and workers were getting

paid. This incentive system applied to productionworkers, de artment heads, staff eo le


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In 2009 Nucor sold almost 86% of its steelinventory to the outside customers, the leftoverwas used by different inter divisions

In 2009 Nucors one division Vulcraft suppliedmore than 40% and 30% of total domesticsales of steel joists steel griders respectively

For maintaining relationship with the most ofthe customers Nucor engaged in contact withthem for 6-12 months while during the contacttime the change in price of steel was totally

restricted.


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Self-owned steel mills

1967: 60% expenditure = rawmaterials

60% steel from foreign sources

1968: Nucor builds first steel mill


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Autonomous Divisions(Joist plants, steel mills and

miscellaneous)

- Management

- Manufacturing

- Selling

- Accounting

- Engineering

- Personnel Management


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Key alliances

- Research and

DevelopmentOutsourcing

- Advertising

- Public Relations

- Le al Issues


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Equal freight prices for

all customers

No volume discounts

Just-in-time

AusterityA no nonsense

company

Own fleet of trucks


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Flexible jobs

Avoiding bottlenecks

Incentives

Base wage + weeklybonus


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January 2007 - Nucor acquired Harris Steel for$1.07 billion

Diversification

Steel used to build bridges, highways, andother infrastructure

Theres always money in government

projectsFebruary 2008 - Nucor acquired David J.

Joseph Inc. for $1.41 billion

Vertical Integration

Scrap metal recycler (used for mini mills)


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2009 Fiscal Year

Loss of $293 million, the

companys first since 1966

Steel industry hit hard by globalfinancial crisis

A year later, Nucor is back toprofitability


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Nature of the Steel Industry

Economic Climate

Strategic Acquisitions

Infrastructure

Looking Towards the Future Analysis


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Presentation1 Nucor Steel