Sylvia G. Evans Nucor Case Study Part-4 Management Decision Making-MGT 240 Trident Technical College Professor Daryl Milligan Nucor Corporation SWOT Analysis Nucor Corporation has a lot of capabilities which enables them to have such a strong market base in the steel business. The SWOT analysis represents a company’s Strength, Weakness, Opportunities and Threats. Strengths: One of Nucor’s strengths is their ability to develop energy saving ideas to produce steel and they build plants with low pollution levels. Nucor’s technology has allowed them to lower the cost of their products which helps them to maintain a strong market share. Nucor is known for producing quality products and fast delivery.
Nucor always had the cost advantage & efficiency coupled with superior technology & innovation. However, this was challenged by the global steel makers which resulted in lowering of prices & lower margins. The only differentiation for Nucor was its highly sought-after customer service.
This is highly important as it bears most of the weight in terms of this particular strength. On the issue of strength the team neglected to mention that AGF has an arsenal of highly competent staff, especially its management team. Every member of top management has the skills and expertise to aid the business in achieving maximum profits. Among the weaknesses mentioned was the differences between the business philosophy of AGF and that of 20/20 at the time that AGF acquired 20/20. This weakness however gave rise to an opportunity; these differences in views helped to catapult some of the older managers out of the organization and made way for younger, more empowering managers (like Blake) to move up through the organization.
Every company in an industry is in a unique situation determined by its history and current competitive strategy. For smaller organisations within an industry dominated by one or two large companies, the actions of the major companies will often produce new and significant problems for their smaller competitors. The information requirements for the smaller companies may involve establishing a new market niche, getting out of a product line completely, or redistributing resources among various product lines. Their strategy is mainly reaction to the larger companies’ strategies, but is important in any business in any market. Imagine only three (3) points are to be rolled out in the first phase.
The possible competitive forces that could have a tremendous impact on the steel industry are the threat of new entrants, bargaining power of suppliers, bargaining power of buyers, level of rivalry and the threat of substitutes Competitive pressure created by the Rivalry among Steel Producers Competition within the steel industry, both domestic and worldwide is intense and is expected to remain so in the future. Producing steel of satisfactory quality is something most producers have mastered. In a commodity market like steel where it is hard to tell the steel products of one steel-maker from those of another, buyers shop heavily for the lowest price. However, given the recent strong demand for steel in the U.S. and other market, meeting customers’ delivery schedule requirements is also a competitively relevant consideration for buyers when it comes to selecting whose steel to purchase. Competitive pressures from the sellers of substitute products There are many substitutes product such as Aluminum, plastics and other material can be used in place of steel.
This force is high when compared to our competitor; Gold’s Gym has the supplier power because they manufacture their own equipment (Gold’s Gym.com) making this a high threat to UMUC and my strategy. Next analysis is the
2. Decentralized structure - Decentralized structure relies on a team environment at different levels of business. This type of structure have several individuals responsible for making business decisions and running the business. Nucor’s top managers always believed that their highly decentralized and lean structure was necessary to meet foreign needs in the market. Though that involved the risk that lower levels of management would follow short term goals at the expense of long-term corporate objectives and co-ordination.
Supplier Bargaining Power: High – By having a great deal of raw material available gives the suppliers a big advantage over their competitors. The majority of businesses in the industry have numerous suppliers to choose from so they can make sure that what they are getting is the best material for a cost effective price. Potential New Entrants: Medium - The possibility of having new clients that will enter the market is pretty low due to the fact that the big businesses are already in existence in the market. It isn’t likely that a loyal customer of the big company will switch to new the company. They will need to create a completely new product that has a better design and quality as well as a better price.
The company has already developed a very good product and there is a great deal of new, exciting and promising ideas floating around. The teams’ ineffective dynamics however hinder the progress and a thorough overhaul of the team processes is needed to accomplish the successful end result. The founders of MGI have gotten to the point where they clearly realized that the sustainability of the company is in danger. Despite their hard work the company is not generating profit. They knew that they “lack specialized industry and market skills” (Polzer 4) and they need a solid business plan.
Finding adaptable and capable IT workers was a major challenge to Globant, as overcoming the language barrier from country to country was perceived to be challenging. • Competitive Challenges: Mature markets can pose difficult barriers to entry due to existing competition. Competition with the firms that already have long term established relationships with their customers was one of Globant's major challenges as they were a newer IT company in a field where many of their competitors (such as India) had been in the industry for approximately 5 – 7 years, with a solid reputation in the industry and low labour costs due to the fact that they had perfected their business model. Those relationships between the readily established companies represented a great deal of invested time and resources and are extremely difficult to break the great barrier to sales with those customers. • Maintaining their existing customers while expanding and selecting target market: Globant became worried that would not be able to handle the number of new customers coming and spreading themselves out to thin, so geographically they focused on their good reputation with existing customers in the US markets where they had already established a base and then over time spread to other areas without losing touch with the customers or losing their good reputation.