Nucor Corporation Case Study Example | Topics and Well Written Essays - 2000 words

Nucor Corporation - Case Study Example Generically, a value strategy is the pattern of decisions and actions that constitute the firm's overall approach toward providing realizable net value to customers. A value strategy inherently involves all parts of a firm's functional and organizational strategies that provide value realized by customers or require sacrifices by customers (see Appendix Table 1) Nucor follows a four-part growth strategy to increase its production capacities and quality that improve product quality. This strategy: "involves new acquisitions, new plant construction, continued plant upgrades and cost reduction efforts, and joint ventures" (Thompson et al 2008 p. C 115). Despite the use of strategic management process and content models, many managers fail to maintain or improve their firm's competitive position. The new globally competitive context requires that top management alter its current predispositions toward certain stakeholders and financial performance measures and refocus on continuously improving net customer value. "By 1985, Nucor had become the seventh largest steel company in Alnerica, with revenues of $758 million. With 18 plants having the capacity to produce 25 million tons of steel annually, 2006 revenues of$14.8 billion, and net profits of$I.8 billion" Thompson et al 2008 p. C-113). These changes suggest new strategic management processes and new strategy content paralleling those in current models. All firms have a value strategy, but few have completely conceptualized and clearly articulated value as the basis for competing. In fact, many firms are more competitor-oriented than customer-oriented. As a result, many managers are more familiar with their firm's competitive strategy than its strategy for improving customer value. Some inadvertently compromise net customer value either by producing products/services perceived to be of low quality or by requiring excessively high sacrifices of customers. Ironically, the most competitive firms are the customer-oriented, not the competitor-oriented firms. In financial terms, "new plant construction and boosting tons sold from 11.2 million in 2000 to 22.1 million in 2006" (Thompson 2008, p. C114). The uniqueness of Nucor is the synergistic combination of low cost and differentiation that may come with a value-based strategy is a direct result of managing critical systems that contribute to value. For Nucor, the acquisition process is limited to broadening the product line is erroneous (Nucor Corporation 2008). Many other business goals can be fulfilled by acquisition. These include strengthening the company's financial position, procuring the services of one or more key personnel or new executive talent, obtaining land, buildings, and equipment for expansion, stabilizing cyclical or seasonal types of business, avoiding concentration in a government-regulated area of industry, acquiring the technical skills of highly trained scientists, and many other critical elements in business which determine growth and success. The process of acquisition, then, is one that ought to be considered by the management of any enterprise as its plans for growth are executed (see Appendix Table 3, 4). Acquisition is one way to be considered in achieving the complete set of defined objectives. And many companies have found it a very satisfactory way. Annual report shows that acquisition strategy allows the company to achieve a steady growth and increase its