Its achievements have been based on technological innovations, the ability to spot opportunities far enough in the future to justify investment, and on a management style that encourages creativity among employees.
Nucor operates seven divisions: minimill, Vulcraft, steel bars, steel grinding balls, bolts, steel bearings and machined parts, and metal buildings. It is a recognized leader in the minimill sector, and has a lower labor cost structure than its competition. The Vulcraft division, which produces steel joists and similar material, was the company's first steel business and the fact that Nucor is in the minimill business at all is due to the company's desire to provide vertical integration to this business unit. Marketing for Vulcraft occurs on a national level, and competition centers on delivery and price. The cold finish bar division is used to make machine shafts and precision parts. The company competes on price in this segment, as well, and currently has approximately 16 percent of the market. The company has a good cost structure which gives it favorable pricing capabilities in the market.
The foreign competitors use lower labor costs and manufacturing costs overseas to compete on price. Nucor's products are recognized as being among the best in the industry and its pricing strategy is innovative (having eliminated quantity breaks, for example), but steel remains largely a commodity. This means that customers are unlikely to base their buying decision on few criteria other than price and consistency in delivery, both of which are areas in which Nucor excels, but which can be expensive to maintain.
tively and efficiently, with the result that they are able to use competitive pricing in the market to ensure market share. Besides selling to the external market, these divisions provide an internal market for Nucor steel products, thus contributing to the success of the Nucor minimills.
The informal structure at Nucor is an outgrowth of the dominant force of Iverson. While this lack of structure has benefited the company during the years of dynamic growth which characterized the 1980s, more structure is needed in order to control the company during the 1990s and beyond, particularly if the company hopes to maintain its record of not laying off workers and keeping wages high relative to the industry as a whole.
Threats to Nucor come essentially from three areas: other domestic mini-mills, integrated steel companies, and international competition. Nucor has already demonstrated that it can compete effectively against domestic competitors within its own niche, and it is a dominant figure in the mini-mill market. By continuing to invest in new processes and technology, it is likely to survive while its competition continues to dwindle.
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