Nucor Corporation has enabled to expand its operations from a small American steel company to a now globally known major steel producer in the United States through the aid of its various competitive advantages. Nucor Corporation obtained its competitive

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Nucor Case Study    

Running head: NUCOR CASE STUDY

Nucor Case Study

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Nucor Case Study

Introduction

        Starting its operation as a producer of nuclear instrument and electronics, Nucor Corporation has able to shift its business inclination to steel production and gain significant market dominance in the American steel industry as well as expand robustly in the international market through joint business ventures with foreign steel companies. Through the great outlook and leadership skills of F. Kenneth Iverson, Nucor Corporation has enabled to expand its operations from a small American steel company to a now globally known major steel producer in the United States through the aid of its various competitive advantages. Nucor Corporation obtained its competitive advantage of providing cheaper steels in the market through minimizing its production costs by stressing the importance of technology and workforce efficiency on its production line. Nucor has been known for being the pioneer on the implementation of new technologies on producing steels in the American market and one of the top companies around the globe that extensively investing to highly advanced equipments for steel production. In addition to this, despite of economic set backs happened in the United States and other regions internationally, Nucor Corporation remains “healthy” or stable while other major steel producers in the United States were almost on the brink of bankruptcy while small producers shut down their operations. The said instability of various steel producers in the American market enabled Nucor to successfully expand its market share, target market, and product lines through acquiring financially unstable steel companies.

        But despite of the strong foundation and immunity of Nucor Corporation on various business factors, competition still remains a major threat to the stability of the said company. Foreign steel companies from Europe, Australia, and Asia exporting in the domestic market of United States and offers super low priced steels in the market, through the subsidies being provided by the respective governments of those foreign steel companies exporting in the United States, posing a significant threat on the sustainable growth of Nucor in the American market. Another issue would be the merging of large international steel companies that also contributes to the tightening competition in the international market and in the American market as companies made through merging and acquisition starts investing to the domestic market of the United States. This merging of international steel companies, therefore, threatens directly the market share of Nucor in the market and its profitability. The last but not the least issue would be the increasing costs of scrap metals in the market that threatens the ability of Nucor to produce cheaper steels in the market. With the increasing demand for scarp metal for the past years since 1960’s, Nucor’s source of competitive advantage on cheap production of steels is presently on the brink of getting out on its hands.

Factors Affecting High Exports of Foreign Steel Companies to US

        Global steelmaking capacity exceeded the global demand from 2005 to 2006 forcing international major steel makers to seek better market abroad. During then, there was a strong demand of steels in the American market resulted from shortage of supplies caused by the shutting down of operations of many steel makers on the latter years. China, Russia, South Korea, Turkey, Taiwan, and Japan are just few of those many countries that extensively exports steels in the United States. Between November 2005 and September 2006, steel imports to the United States rose over 70 percent thereby hurting the domestic manufacturers of steels in the American market.

        To make the scenario worst for the United States, most of the foreign steel companies that exports steels to United States were owned or/and subsidized by their government giving them enough room to set their prices “super lower” relative to the prices of American steel producers. American steel producers on the other hand, were on the state of financial instability during then which makes it hard for them to compete with the “super low prices” of foreign steel makers exporting to the United States. The federal government and other international organization, like WTO, has been on the action of determining if whether those above mentioned countries that extensively exporting to United States and offering super low prices backed by subsidies from their government violates any international trading rules set by the World Trade Organization.

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Alternative Solutions on High Exports of Foreign Steel Companies to US

        In order for the welfare of Nucor to be protected, Nucor’s executive can file or request for an official investigation to WTO and federal government to determine the legality of the provision of subsidies of various government of foreign companies exporting steels in the United States’ market that adverse affects the stability of American steel producers especially Nucor. Though there is already an ongoing investigation conducted by the WTO and federal government regarding the legality of China’s provision of government subsidies to their steel companies exporting to United States, it ...

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