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1302 nucor plung
The document discusses Nucor Corporation, a major American steel producer. It outlines Nucor's strategy of maintaining low costs through flexible minimill production and a decentralized organizational structure. This allows it to compete effectively on price while still ensuring product quality. Tables show Nucor's strong financial performance over time compared to competitors. The organizational structure employs a decentralized model with divisional autonomy to promote efficiencies.
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1302 nucor plung
- 1. Dandalina – Erlis Nia – Satrio MBA Shariah 2, SBM ITB
- 2. Steel is a cornerstone and key driver for the world’s economy
- 6. Financial Strength Cost Structure Low & Highly Variable Highly Flexible Production Capabilities Product Diversification & Market Leadership Nucor’s People = THE RIGHT PEOPLE for our culture!!!
- 7. LONG-TERM PROFITABLE GROWTH NetIncome 2000-2008 (millions of dollars) 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 2000 2001 2002 2003 2004 2005 2006 2007 2008
- 8. 33.6% 35 32.2% 32.5% 30 26.8% 25 21.1% 20 15 10 5 0 Gerdau Commercial U.S. Steel Steel Dynamics NUCOR Ameristeel Metals 8
- 9. 61.9% 60 51.1% 50 44.7% 39.0% 40 28.3% 30 20 10 0 Steel Dynamics Gerdau Commercial U.S. Steel NUCOR Ameristeel Metals 9
- 10. Diversified Product Mix 2008Sales Tons Nucor is North America’s Most Diversified Steel Producer Sheet - 30% Bars - 21% Structural - 11% Plate - 10% Downstream Products - 14% Raw M aterials - 14% PRODUCT DIVERSIFICATION REDUCES EARNINGS VOLATILITY!!! 10
- 11. Highly flexible production process utilizing electric arc furnaces and highly productive labor allow Nucor to almost instantaneously adjust output to match market demand 11
- 13. The Business Week50: The Best Performers April 6, 2009 Top Stories The BusinessWeek 50: The Best Performers From 3D software designer Autodesk to steelmaker Nucor, our annual list of top performers shows innovation remains the engine of success 13
- 14. LONG-TERM PROFITABLE GROWTH NetIncome 2000-2008 (millions of dollars) 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 2000 2001 2002 2003 2004 2005 2006 2007 2008
- 15. Krisis Ekonomi 2008telah membuat demand untuk baja berkurang sangat signifikan, demikian juga laba bersih perseroan
- 16. Slowdown was occurring already before the financial shock The financial shock reduced capital availability Causing a contraction in fixed asset investment (OECD)
- 17. Thechallenges : 1. To asses the threats & opportunities 2. To select the best strategies & structure Key succes factor : established organization design, management philosophy, incentive system.
- 18. 3 Divisions : joist plants, steel mills, & miscellaneous plants. Decentralized operation with own manufacturing, selling, accounting, engineering, & personnel management. 4 levels from top to bottom expect to earn 25% of ROA Efficiencies : scrap steel from independent broker, actual shipping cost, no volume discount, just in time. Organizational style : not constrained, “Stripped down” & “No nonsense”. Informal, trusting, not bureaucratic.
- 19. Informal, trusting, not bereaucratic. Each month : financial consolidation, sharing information, corporate mgt examination High Competition for many small customer : Cost Leadership. 1. Vulcraft The Joist Divisions : steel joist & joist girders, high competion, the largest supplier in 1975, price & delivery performance 2. Steel Divisions : Provide raw material for the vulcraft plants 75%, other customer 25%, the first that build a mini mill to manufacture steel 3. The Steelmaking Processing
- 22. The first is industry competitors, which is the intensity of rivalry among firms in the industry. There are two basic types of competition; price and quality. Nucor focused on the manufacturing segment know as minimills and thus saved on costly labor, raw materials, and the capital-intensive machinery necessary to produce steel from iron ore. “Nucor was able to expand sales from the minimills by keeping costs below its competitors.” Also, another means of maintaining quality control and costs was a “highly decentralized organizational structure.” Corporate staff was kept to a minimum and individual plant-level mangers were given authority on decisions. By using the minimills and keeping the corporate staff to a minimum, costs would be kept at a minimum and quality would still be maintained; thus keeping the industry competitors in a need to keep up.
- 23. The second is new entrants which were threats of new competitors entering the market. As was said before; the minimills and minimum corporate staff helped keep prices below competitors. In addition, the risk of adapting an untested German process for manufacturing flat steel also paid off and helped get the company ahead of the competitors. This process was quite a risk for the Nucor Company but Ken Iverson, CEO, made the decision and luckily it paid off. Again by keeping price down and quality up, new entrants were kept from coming in and if they did decide to enter it would take them a lot to get up to Nucor’s level.
- 24. Porter 5 Forces of Nucor Strategy The third and fourth are the bargaining power of consumer and buyers and these two are controlled by also keeping the costs down and the quality up. As long as Nucor carefully monitored costs and paid attention to the needs of its markets, then it had the upper hand in the decisions of the company because as long as they keep the top standing as cheapest and best quality production, then the consumer and buyers have no where else to go and thus can only follow what Nucor decides and therefore gives it the upper-hand.
- 25. Porter 5 Forces of Nucor Strategy The fifth force is substitutes which is the threats of substitute products or services. This also is answered with; as long as prices are kept at a low and quality kept at a high then Nucor has the upper hand and people would have no need to go and find other substitutes elsewhere.
- 26. Several structure formsare used to implement strategies, including: 1. Simple 2. Functional 3. Multidivisional
- 29. FK Iverson HD Aycock Chairman President/COO President/CEO Samuel Seigel Personnel Planning VP Finance Research Chemicals VP & GM Nucor VP & GM Vulcraft Steel 4 steel mills 6 jist plants Machined Products Fastener Grinding Balls Cold Finish VP & GM
- 31. Dan DiMicco Vice Chairman President/CEO Jim Coblin Jeff Kemp Rae Eagle GM GM Terry Lisenby VP Human GM Strategic GM Secretary Construction Environment EVP CEO, Resources Planning Treasurer Eliz Bowers GM Taxes James Fries Joseph Rutkowski GM Controller Ham Lott EVP International Mike Parrish John Ferriola EVP Div. EVP EVP 6 joist plants 9 bar mills 3 sheet mils 3 cold finish 1 fastener mill Nucor/Yamato 1 grinding ball Robert Johns Director Marketing Sheet mils