Nucor corporation

Nucor CorporationPresented by :

INTRODUCTION Nucor started as a auto manufacturing company than later converted itself into the Nuclear and Electronics business in 1950s and early 1960sAfter the firm suffered several money losing years Ken Iverson took charge as the president After Iverson took charge he consolidated company on two businesses viz making steel from recycled scrap metal and fabricating steel joists for use in non residential construction ContdIn 1972 the firm changed its name to Nucor corporation By 1998 it became Americas second largest steel maker and also was in Fortune 500 companyNucors sales during Iversons tenure grew at an annual compound rate of about17% per annumIn the corresponding years both Nucor CEO John Correnti and Iverson were named steel maker of the year

Operations of NucorNucor located its diverse facilities in rural areas across the United States

It established strong ties to its local communities and its workforce

Nucor selected operations in states with tax structures that encouraged business growth

ContdNucors top management favoured the companys commitment to remaining union free

Nucor and its subsidiaries consisted of nine businesses, with 25 plants

StrategiesContinuous Innovation Usage of modern equipmentIndividualized customer serviceUsage of scrap metalNo acquisitions and mergersUsage of low debt in total capitalNo diversificationOrganization StructureDecentralized systemFour management layers:

Chairman/Vice chairman/PresidentVice President/Plant General ManagerDepartment ManagerSupervisor

ContdAutonomy to the General Manager in decision makingNucors board of directors had only six membersThe decision making was done by the individual plants General Manager and they were not liable for the Headquarters to respond to the problemsThere were a total of 6800 employees working in the company

Human Resource Policies Employee relations at Nucor were based on 4 principles:Employees would earn according to their productivityEmployees should feel confident that if they do their jobs properly, they would have a job tomorrowEmployees have the right to be treated fairly Employees have an avenue of appeal when they believe they are being treated unfairlyCotndGeneral manager were required to hold annual dinners with every employeeCommitment for no lay off during recession periodNo unionism Policy of team workSuggestions from lower level employees are taken into consideration Compensation Four compensation plans

Product incentive planDepartment manager incentive planNon-production and non-department manager incentive planSenior officer incentive plan Information systems Each plant has to submit a snapshot of the plants basic operations on a weekly and monthly basis Managers do not have to submit voluminous reports instead they need to submit the actual and budgeted figuresThe plant General managers met as a group with head quarters management three times a year to review each plants performance Benefits Profit sharingScholarship programmesStock purchase planCommitment of providing equal status On the job training Job referrals through existing employees

Technology Use of mini-mill technology

Backward integration

Modernizing the existing plants

Technology management

Application of MCSResponsibility centre Expense centreGoal congruence Management performanceEconomic performance

SWOTANALYSISSTRENGTH1. Industry leader in innovation of lowest production cost.2. Excellence in management. (Employee Relation and HR)3. Nucor isthe only company which is certainly healthy. (Finance, Acquisition)4. Being a global leader in environmental performance.5. Risk taker. ( Downturn)6. Diversified product mixedWEAKNESS1. High dependence on US domestic market. (Supplier, Pricing)2. Limited diversification.OPPORTUNITY1. A 50-50 joint venture with Duferco Group.2. Entry in Asia- Europe market through joint venture.3. Vertical Integration with the plants to enable the low cost energy to produce steel products.THREAT1. Rising raw material & labor cost.2. Threat from Chinese & other foreign players entering US markets.3. Declining demand in US Real estate.Conclusion Good strategy leads to good performanceFinancially healthyEvaluate opportunities to ensure that quality improvement would still help to keep low cost in the long runKeep up with their social responsibility by setting up environment-friendly recycling plant that will be located at a relatively central location from all its plantsForm an alliance with the south Asian markets to gain exposure to international marketsNucors overall approach towards organization and control has paid rich dividend in the growth of the companyTheir ability to be a successful first mover in the adaption of new technology is remarkableAlthough the company has done well for the last 25 years but still with the prevailing market conditions they need to think about diversification and mergers & acquisitions