Nucor Corporation s Making Nuclear Instruments - 1269 Words

Nucor Corporation got its start in the 1950’s making nuclear instruments as well as electronic products. It struggled for many years and by 1964 was facing bankruptcy. Around the mid 1960’s it was decided that it was best for the company to exit its current market and focus on its profitable Vulcraft subsidiary steel joint business. In 1968, management then made the decision to integrate backward into steelmaking. In 2012, Nucor was the largest manufacturer of steel and steel products in North America. Alongside Nucor’s low-cost strategy, it places emphasis on innovative steelmaking technologies to reduce environmental waste, increased efficiency and production innovation. However, Nucor has had some struggles financially over the past†¦show more content†¦The single largest costs for Nucor is raw materials, scrap metal and scrap substitutes. All of its steel mills use recycled scrap metal to make steel products. 1.1 tons of scrap and scrap substitutes are required to produce 1 ton of steel. As the biggest user of scrap metal in North America, it is imperative that it gains better control over its costs of raw materials (Attachment C.) Market demand-supply conditions fluctuate significantly in the steel market, and directly drive scrap prices. Scrap and scrap substitute price averages increased by 57.6% from 2007 to 2008. Although prices did decrease by 30.8% the next year, by 2011 prices showed a total increase of 58% since 2007 (Attachment D.) The unpredictable n ature of the raw materials needed to produce its products makes close monitoring of Nucor’s pricing strategy each year essential to maintaining the company’s profitability. The company uses continuous innovation practices as well as technological advancements in its production processes as ways to offset the costs of the volatile market prices while attempting to maintain its low costs (Attachment C.) Another challenge for Nucor is competition from foreign suppliers. The competition in the U.S steel market is highly competitive with pressure from many domestic as well as foreign firms (Attachment B.) However, Nucor’s most challenging threat in the U.S market is foreign steelmakers exporting to the U.S. Many of these foreign companies receive subsidies from