1. What is the nature of the competitive environments in which Nucor operates? What are the competitive implications?

2. What factors have helped Nucor achieve a low‑cost position?

3. How did Nucor’s organization structure help the company achieve a low-cost position?

4. How did Nucor’s incentive systems help the company achieve a low‑cost position, and may help it survive the global financial crisis of 2007-2008?

5. How did Nucor’s management style help the company achieve a low‑cost position?

6. Why was Nucor’s organization structure changed in 1999?

7. In the period 2001-2009, what challenges does Nucor face? What approach has it taken to these challenges? Were its responses effective?

Nucor is a vertically integrated company that manufactures steel, steel joists, and steel fasteners. The company has a reputation as one of the most efficient steel companies in the world. A “mini‑mill” producer, Nucor is the brightest star in the U.S. steel industry. The case gives a detailed overview of Nucor’s steel‑making and steel joist operations. It also describes the nature of competition in these industries. Throughout the case, particular attention is paid to Nucor’s organization structure, management style, and employee incentive systems. All of these played a major role in turning Nucor into one of the lowest‑cost firms in the global marketplace.

By 2001, the company, which began making steel in 1969 using new mini-mill technology, was the second largest steel producer in the U.S. and was expected to pass U.S. Steel as the largest producer within the next few years. A culture that rewarded hard work and cooperation with high pay, job security and commitment by the company, solid business decisions, and a willingness to take risks had made Nucor one of Fortune’s most respected U.S. corporations. 

However, Nucor also faced a number of challenges. Externally, the global financial crisis of 2007-2008 sapped demand for steel, even as it led to a sharp decline in steel prices. Nucor was especially hard hit, with its ranking among the largest steel producers dropping two points to 12^th in 2007. The company’s increased size forced structural changes that increased bureaucratic costs in an effort to provide better integration and coordination of the company’s many plants. This need for change was a major stimulus for the board’s replacement of the top management, the very management that developed the company over the past 30 years. The steel industry was in an extremely unprofitable and volatile phase. With its earnings, sales, and profits showing a downward trend, Nucor had to decide how and whether it would expand into the production of steel outside the U.S. and whether it would diversify further into related businesses that were less cyclical in order to provide stockholders with a higher return.