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Nucor Corporation Argumentative

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Nucor Corporation is a steel production company that has had tremendous success. The company has the visionary practices of high employee productivity, good employee relations, a technically superior work environment, good quality control, and a cost-conscious corporate culture as well as the low-cost production of steel. I. Strengths of Nucor are starting out at the point of a viable company, which is excellent in managing and sensitive to its workers’ needs, for the most part, in the area of compensation. The company’s strength is also that it is being a global leader in environmental performance. Furthermore, Nucor Corp. has the staying power and ability to remain competitive in the domestic and global markets. The most important, Nucor has developed diversified product mixed for customers. II. Weaknesses of Nucor include that its high dependence on US domestic market, it mainly being showed on the company’s supplying and pricing standard, it changes as domestic market alters. Additionally, there is a lack of market diversification as it derives most of its revenue from the US. This exposes them to the fluctuation in the US economy as demand for steel will decrease when the economy slacken.

Also, although Nucor is quite ambitious in expansion, it risks more liabilities and therefore an inability to control or manage those liabilities with its current corporate structure. Thus it is endangering the company’s ability to compete effectively in domestic and foreign market. Last but not the least, the company has a very narrow location strategy because there are no plant outside the US market. III. Opportunities include China, which as a major player since it imports the most steel. China has potential to provide Nucor with a market to sell its products. Nucor should take the advantage of Asia in general and try to corner the market on selling steel to Asia and various European countries. Nevertheless, the company also has the vertical integration with the plants to enable the low cost energy to produce steel products.

Another opportunity is that Nucor as a responsible corporation has the ability and ethical responsibility to reach out to the communities around it in order to gain support in that way, which it does not seem to have accessed up until this point. Lastly, since the company has not expanded to the plant outside the US, there is opportunity for it to get into the new business market. IV. The threats include the rising of material and labor costs. Also, the most important one that cannot be ignored is still the competition from other countries (mainly China, Japan, and Russia etc.), because they are higher steel-producing countries in the world. Additionally, as the demand of US real estate declines, there are potential risk for Nucor Corp.

The fast growing imports has also brings risks to Nucor since the company has not yet expand globally. V. Nucor Corporation must establish how, in the future, it is going to remain competitive in the U.S. and in foreign markets within the steel industry. So far it has maintained its competitive edge primarily by treating its workers well, having high productivity, having the latest continuous-casting technology, maintaining low labor costs, and having low capital investments for starting new plants. VI. Alternative A: enhance the level of product differentiation by designing more specialized products. Advantages include booming product recognition and helping better compete the new entrants or substitutes. Disadvantage includes the increasing of incidental charges as well as the technical support relevant to that.

Alternative B: Developing unique corporation culture. Advantages are deeper the relationship with employees and increase the image of corporation. Disadvantages are taking too much time to maintain it and within this time range, it is possible that there are other aspects conflicts with this plan. For example, the employees needed to be trained to create such unique environment; therefore, this makes them not paying all their effort on workings.

Alternative C: adjusting pricing and supplying system, try not to rely solely on the US market. Advantages are new pricing, supplying system may increase the international market share once the company independent from US market. The Company could expand their knowledge when they making new plan for pricing and supplying. Disadvantages are too much time spending on testing the system, also, there are risks that the pricing, supplying system will bring harms to the company’s overall performance with domestic market. VII. If I was employee in the company, I would recommend applying alternative A, Since it will not change the current performance of the company and it is easy to accomplish comparing to the other two. However, although it may be little thing within these three alternatives, it would bring huge benefit if this action successfully applied. By the comparison to the other two alternatives, the first one encourages the company to improve from basic thing and it will not take too much time to work on.

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