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AINABE ESEOHE PHILO 300633042 ASEEB MUSHTARI 821821651 DALBIR SINGH 300638591 KEVIN PARIAG 822793378 PREETINDER KAUR 300633211 RHODA GYANG GYANG 300598502 ROHAN CASTELINO 300639954
Global competition Domestic competition Pricing competition Economies of scale Access to raw material Product differentiation Alternatives-Plastics
5 Forces Analysis
Intensity of Rivalry among Competitors Global competition Domestic market there are more than 20 competitors ranging from large scale operations to the small and regional. Competition amongst these competitors causes a cyclical effect within the industry. The industry is not based on differentiated products, but rather price competition. Ultimately, the business with the lowest fixed costs will survive the longest and, probably, be the most profitable. Nucor s use of both base pay and incentive pay ensure output is relative to pay and, therefore, decreases its fixed costs. Different business models are also prime means of competition. Nucor boasts a decentralized structure with control at the local factory level. Arguable, this allows for focused decision making and more efficient use of profits.
How attractive are the prospects for future profitability of U.S. steelmakers? Should Nucor consider expanding in this type of industry environment? Why or why not?
Prospects of future profitability in US for steelmakers seems not promising due to following reasons. Globalization. Entrance of foreign competitors. (e.g China, South Korea, Italy and etc) Cost of raw material and energy costs. Economy itself. Government regulations and laws.
Should Nucor consider expanding in this type of industry environment? Why or why not?
To consider whether Nucor should consider expanding in steelmaking industry; we will consider SWOT analysis of Nucor. Strengths: Technology is one of Nucors key strengths because of the amount of resources they can save due to it. Nucor is an industry leader when it comes to innovation. Nucor benefits from having some of its customers locating in proximity to their plants. The Arkansas Nucor plant sends approximately 60% of its sales to near by businesses.
Should Nucor consider expanding in this type of industry environment? Why or why not?
Weaknesses: Nucor faces some very significant weaknesses with its location. Nucor has 14 plants all of which are located with in the US. They cannot effectively serve international markets as good as competitors who have plants worldwide. Nucor is currently in a Market where growth is declining significantly. Nucor has to also be concerned with the failing domestic auto industry.
Should Nucor consider expanding in this type of industry environment? Why or why not?
Opportunities: Nucor has a significant opportunity to continue innovating with the Hismelt Technology or liquid iron project. Nucor could provide discount pricings. Nucor could offer lower logistics fees. (shipping) Nucor could utilize acquisitions of small steelmaking companies to gain international grounds.
Should Nucor consider expanding in this type of industry environment? Why or why not?
Threats: Nucor faces significant threats through the global market and at home. In the global market the Chinese continue to produce and ship steel. At home they are competing with ThyssenKrupp. Nucor is competing with international forces and has yet to leave US.
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