Nucor holds a leading marketing position in North America in the steel producing industry. In 2011, Nucor held the most shares in the markets for rebar steel, cold finished steel, structural steel, steel joist, and rebar fabrication. * Nucor is North America’s largest steel recycler. The company uses scrap steel to produce steel products. Nucor’s recycling efforts lead to higher efficiency and better productivity. * Nucor is known for producing new, and more efficient, technologies.
They created the first electric arc furnace, to commercialized thin casting production. Inventions like these can keep Nucor competitive and also generate more revenues by cutting expenses. Weaknesses * Companies in the steel industry are very vulnerable to price fluctuations in raw materials. If the price of steel rises Nucor may not be able to honor the quote they gave a customer for a project. * Almost all of Nucor’s facilities are in the United States, making it harder to compete with international companies.
The shipping costs of steel can be extremely expensive, so it is not profitable for Nucor to export a lot of products. Opportunities * Nucor can continue to expand their portfolio by launching more Direct Reduced Iron (DRI) making facilities, like the one that opened in Louisiana in 2011. These facilities use direct reduction technology to convert natural gas and iron ore pellets into high quality DRI used by Nucor’s steel mills (“Louisiana Economic Development”).
If Nucor repositioned itself by entering in to the international market they would be able to compete with some of the larger global competitors. Opening manufacturing plants in Asia could capitalize on lower labor wages, as well as create new markets for the company. Threats * Many major steel corporations have undergone mergers in the last decade, creating a few international market leaders in the steel industry. Larger companies with higher bargaining power may be able to receive raw materials at lower prices.
Intense competition abroad and future acquisitions could result in declining sales and revenues. * Many plants that operate abroad deal with less stringent regulations concerning their plant. For example, because Chinese steel factories do not have to pay fines and adhere to the environmental standards that US companies do, they are able to create products at a lower cost.