Need to fix all the problems that are commented under'EMMA', which is the Historical performance and Internal environment to be exact. Please send back the revised document as word only need to include the 'Emma' section.

Fashion Institute of Design and Merchandising A Strategic Audit of Reliance Steel & Aluminum Company ROUGH DRAFT Winter 2017 BUMT 4450: Strategic Management Policies By: Neha Modha, Elisa Maglaqui, Dreaming Li, Serena Low, Roberta Nunez Date: 2.14.17 Table of Contents 1) Company Overview 2) Business Model a.) Five Steps of a Business Model b.) Analysis: Is Reliance Sustainable? Weaknesses? 3) Value Chain 4) Historical Performance 5) Current Situation 6) Strategic Managers a.) Board of Directors b.) Top Management 7) Corporate Governance a.) Stock Ownership b.) Committees c.) Evaluations 8) External Environment 9) Internal Environment 10) Important Issues Facing the Firm 11) Recommended Strategy 12) Implementation 13) Evaluation and Control 14) References 1. Company Overview Reliance Steel and Aluminum Co. was founded in 1939 in Los Angeles, California by Thomas Neilan. The company began as a small steel reinforcing distributor, and after 10 short years of being in business, Reliance added magnesium and aluminum to their line of products. 75 years after the beginning, Reliance Steel and Aluminum Co. continues to celebrate, affirm, and encourage the core values, both in the business practices and the company's local communities, by keeping the family of companies successful. Reliance Steel & Aluminum Co. became a Fortune 500 company in 2007 and has remained on that list ever since. Reliance believes that although one person can make a huge impact, keeping that movement going requires a team of people who are dedicated to making a different. The company believes they have that team. Reliance is proud of having a team who works hard to improve themselves by learning from one another. According to Reliance, \"Living out our core beliefs in each interaction with one another as well as with our customers and suppliers - in short, working towards something bigger than us - is one of the secrets of Reliance's longstanding success in the metals industry.\" The company believes that it is both the individual and combined strength of Reliance's Family of Companies that make them the industry leader. Reliance Steel and Aluminum Co.'s Vision Statement: Our history is the key to writing the story of our future. We strive to be a market leader, committed to setting industry leading standards in all measures of business performance and customer service. We expect all of our employees to exhibit the highest levels of personal integrity, teamwork, and appreciation for our diverse individual and company cultures. We believe in always treating people fairly, whether employee, supplier, or customer, while always looking for ways to improve our service and contribution to the communities in which we live and work. Reliance Steel and Aluminum Co.'s Values Our values reflect who we are; they are the pillars of our culture. Reliance's culture draws on our core values of leadership, people, service, diversity, accountability, and partnerships. 2. Business Model Five Elements Who Reliance serves Reliance Steel & Aluminum Co. serves over 125,000 customers by providing metals processing, inventory management services, and quick delivery. Reliance is capable of serving their customers by having over 300 locations in 40 states and 12 countries all based outside of the United States. By going global, Reliance is able to provide, \"value-added metals processing services and distributes a full line of over 100,000 metal products to more than 125,000 customers in a broad range of industries\" (RSAC). What Reliance provides Reliance provides metals that perform such value added processing as cutting to length; blanking; slitting; burning; plasma burning; precision plate sawing; sawing; shearing; and more before distributing metals products to manufacturers and other end- users (RSAC). Reliance offers a full line of more than 100,000 metal products. The orders are often fulfilled and delivered within 24 hours of receipt. Just a few of the products Reliance offers are galvanized, hot-rolled and cold-finished steel, stainless steel, aluminum, brass, copper, titanium, alloy steel and much more. Reliance Steel & Aluminum Co. also provides their customers with, \"readily available inventory, valueadded metals processing, reliable and timely delivery, flexible minimum order size and quality control\"(Reliance). How Reliance makes money Reliance's primary business strategy is to increase their operating results by expanding their existing operations and penetrating new markets through strategic acquisitions. Reliance pursues businesses that will increase their customer base, product breadth, and geographic presence. Reliance Steel & Aluminum Co. is known in the metals service center industry as the \"Acquirer of Choice.\" Reason being, Reliance offers their customers top quality metal and steel for affordable prices. How Reliance differentiates and sustains competitive advantage Reliance Steel & Aluminum Co. differentiates and sustains competitive advantage by being a strong competitor in such a niche market. Reliance is able to maintain their competitive advantage by focusing on just-in-time inventory management and materials management outsourcing in the capital goods and related industries. According to Reliance Steel & Aluminum Co.'s website, \"As the largest metals service center company in North America, Reliance will continue to be an active and strategic acquirer, at the forefront of consolidation in our large and still fragmented industry.\" Reliance has an incredibly strong financial profile, management philosophy, and acquisition expertise that allow them to have continued growth and profitability. How Reliance provides its product/service Reliance provides its product/service by using a decentralized management business model, which allows them to empower their subsidiaries. By doing so, Reliance enables their subsidiaries to excel in n their areas of expertise which include: \"executives and employees at all levels are able to adapt and respond quickly to their specific regional, market, and industry conditions.\" Reliance is proud to have employees who provide excellent customer service to their consumers, who consist of local community members and neighbors. Reliance ensures high quality, quick turnaround, labor, and expense for their customers, which results in having over 90% of them return to do business with them. Reliance also aims to reduce their overall manufacturing costs while increasing profitability across their industry. Analysis: Is it sustainable? Any weaknesses? As a multinational company, Reliance Steel and Aluminum Co. has proven to be a sustainable company. After being in business for over 75 years, the company has grown to become one of the most reliable metal manufacturers in the world. Their business strategy and the size of the company allows for the company to stay competitive in their niche industry. Although Reliance Steel and Aluminum Co. is a sustainable company, just like any other company, it does have a few weaknesses to overcome. Some of their weaknesses include inappropriate handling of the environmental interest groups, high gearing, and capital blocked in-group company investments. Reliance needs to understand the environmental concerns that come along with being a manufacturing metal company. As long as Reliance does not add on to their list of weaknesses, it is safe to say that the company will remain sustainable. More of the weaknesses will be discussed in the external and internal sections. 3. Value Chain Value Chain is the process or activities by which a company adds value to an article, including production, marketing, and the provision of after-sales service. Manufacturing companies typically create value chain by acquiring raw material and using it to produce something useful. In this case steel and aluminum is being produced. Reliance Steel and Aluminum Co. manufacture six different types of materials and in a variety of different forms. This is a strong characteristic because it attracts all different kinds of customers that need a variety of things produced. In addition, they continue their strong value chain by keeping and gaining investors, promoting by having corporate events. They feel very strongly about treating their current and future customers fair when doing business. The company has followed that mission throughout the years and has strongly helped raise and gain new customers. Most importantly, there are a set of activities that relate directly to the creation, sale, maintenance, and support of a product or service. Inbound logistics - These are all the processes related to receiving, storing, and distributing inputs internally. Your supplier relationships are a key factor in creating value here. Operations - These are the transformation activities that change inputs into outputs that are sold to customers. Here, your operational systems create value. Outbound logistics - These activities deliver your product or service to your customer. These are things like collection, storage, and distribution systems, and they may be internal or external to your organization. Marketing and sales - These are the processes you use to persuade clients to purchase from you instead of your competitors. The benefits you offer, and how well you communicate them, are sources of value here. Service - These are the activities related to maintaining the value of your product or service to your customers, once it's been purchased. 4. Historical Performance The total revenues of Reliance Steel and Aluminum improved from $ 9,223,800,000 in 2013 to $ 10,451,600,000 in 2014 and then declined to $ 9,350,500,000 in 2015 (finance.yahoo.com). The gross profit improved from $ 2,397,600,000 in 2013 to $ 2,621,000,000 in 2014 and then dropped to $ 2,546,900,000 in 2015. The net income of Reliance Steel and Aluminum improved from $ 321,600,000 in 2013 to $ 371,500,000 in 2014 and then declined to $ 311,500 in 2015. Cash and cash equivalents improved from a negative position of -$ 14,000,000 in 2013 to $ 22,600,000 in 2014 and then dropped to -$ 1,900,000 in 2015. The negative cash positions of the company in the year 2013 and 2015 are not favorable since it shows a very low liquidity position (finance.yahoo.com). The total amount of retained earnings of Reliance Steel and Aluminum increased over the years from retained earnings of $ 3,063,000,000 in 2013, to $ 3,328,500,000 in 2014 and then to $ 3,480,000,000 in 2015. The improved in the total amount of retained earnings of the company implies that more and more resources were being made available to finance the company operations. 5. Current Situation A. Current Position Reliance Steel & Aluminum Co. has announced on Feb. 02, 2017, that it will report their fourth quarter results for the period ended December 31, 2016, on Thursday, February 16, 2017. The last two quarters on record for the firm are the third quarter 2016 and second quarter 2016. Q3 2016 Earnings Sales were $2.19 billion, down 0.8% from $2.20 billion in the second quarter of 2016. Tons sold were down 4.9% from the second quarter of 2016. Net income attributable to Reliance was $49.5 million, compared to $100.9 million in the second quarter of 2016. Net income attributable to Reliance included a pre-tax impairment and restructuring charge of $67.3 million, or $0.57 per diluted share, in the third quarter of 2016. These charges were primarily related to certain of the Company's businesses serving the energy industry. Earnings per diluted share were $0.68, compared to $1.38 in the second quarter of 2016. Non-GAAP earnings per diluted share were $1.25, compared to $1.36 in the second quarter of 2016. Reliance recorded a pre-tax LIFO inventory valuation credit adjustment, or income, of $11.3 million in the third quarter of 2016. In the second quarter of 2016, Reliance did not record a LIFO inventory valuation adjustment. The effective tax rate was 28.2%, compared to 32.7% in the second quarter of 2016. Cash flow from operations was $182.4 million in the third quarter of 2016 and net debt-to-total capital was 32.2% at September 30, 2016. A quarterly cash dividend of $0.425 per share was declared on October 19, 2016 for stockholders of record as of November 18, 2016 and will be payable on December 16, 2016. Q2 2016 Earnings Sales were $2.20 billion, up 1.9% from $2.16 billion in the first quarter of 2016. Tons sold were up 1.1% from the first quarter of 2016. Net income attributable to Reliance was $100.9 million, up 9.4% from $92.2 million in the first quarter of 2016. Earnings per diluted share were $1.38, up 8.7% from $1.27 in the first quarter of 2016. Non-GAAP earnings per diluted share were $1.36, up 32.0% from $1.03 in the first quarter of 2016. Reliance continued to not record a pre-tax LIFO inventory valuation adjustment in the second quarter of 2016. The effective tax rate was 32.7%, compared to 14.4% in the first quarter of 2016. Cash flow from operations was $49.8 million in the second quarter of 2016 and net debt-to-total capital was 33.4% at June 30, 2016. A quarterly cash dividend of $0.425 per share, an increase of 6.3%, was declared on July 20, 2016 for stockholders of record as of August 12, 2016 and will be payable on September 9, 2016. B. Strategic Posture 1. Mission \"Reliance Steel & Aluminum Co. serves over 125,000 customers primarily by providing metals processing, inventory management services, and quick delivery.\" 2. Objectives \"CEO David Hannah sums it up when says, \"At Reliance, we are committed to being the best not just being the biggest.\" Reliance has risen to become the largest metals service center in North America, with more than 300 locations in 40 states and 12 countries outside of the United States. Through living out their core beliefs in each interaction with one another as well as with their customers and suppliers they can reach their objective in being the best. \"Reliance Steel & Aluminum Co. is known in the metals service center industry as the \"Acquirer of Choice.\" \"We strive to be a market leader, committed to setting industry leading standards in all measures of business performance and customer service.\" It is through both the individual and combined strength of their Family of Companies that can make Reliance the industry leader. 3. Strategies To increase our operating results through the expansion of our existing operations. Penetrate new markets through strategic acquisitions. Pursue businesses that will increase our customer base, product breadth, and geographic presence. To meet the commitment to environmental stewardship. 4. Policies Conduct all operations in compliance with all applicable environmental, health and safety laws and regulations. Cooperate with regulatory agencies, as need to address environmental, health and safety issues. Maintain a work environment free of unlawful discrimination for all employees. 6. Strategic Managers Reliance Steel and Aluminum Co.'s Board of Directors are made up of experienced and established professionals who come from an array of backgrounds in order to represent Reliance shareholders and maintain accountability of the company's executive and corporate leadership. Their diverse points of view result in well-rounded oversight and a strategic, forward-looking path as Reliance works towards achieving Reliance's mission and goals (RSAC). Reliance Steel and Aluminum Co.'s Board of Directors include: Mark V. Kaminski- Chairman of the Board o Mark V. Kaminski was appointed to Reliance's board of directors in November 2004. In 2016 he was appointed Reliance's independent, nonexecutive Chairman of the Board. Mr. Kaminski also serves as a member of Reliance's Compensation Committee, Audit Committee and the Nominating and Governance Committee. o Mr. Kaminski received a BS degree in Business from Indiana University and an Advanced Management degree from Harvard Business School, which has definitely served as an asset by allowing him to use his knowledge of management to lead the Reliance team. o Coming from a background of business and management, Mr. Kaminski is more than equipped to hold the Chairman of the Board position. His experience of being the chief executive officer and a director of Commonwealth Industries Inc. (now Aleris International, Inc.) from 1991 to his retirement in June 2004 definitely gave him the expertise he needed in the industry. Sarah J. Anderson- Director o Sarah Anderson joined Reliance's Board of Directors in July 2012. Ms. Anderson was appointed by the Governor to the California Board of Accountancy for two terms ending in 2014, and has served as the board president. Ms. Anderson is the Chair of Reliance's Audit Committee and a member of the Compensation Committee and Nominating & Governance Committee. o Ms. Anderson holds a BS in Business Administration from Northeastern University. o Ms. Anderson's experience working with Ernst & Young LLP for over 24 years as an assurance and advisory services partner definitely served as an asset when she was appointed to the California Board of Accountancy. Karen W. Colonias- Director o Karen W. Colonias joined the Board of Directors in October 2016. She is currently the President and Chief Executive Officer of Simpson Manufacturing Co., Inc. ("Simpson"). o Ms. Colonias received a Bachelor of Science degree in Civil Engineering from California State University, Sacramento and a Master of Business Administration degree from California State University, East Bay. o Ms. Colonias past experience working at Simpson Strong-Tie Company Inc., a subsidiary of Simpson, in 1984 as an engineer, manager and executive Vice President gave her the background she needed to succeed at the the President and Chief Executive Officer of Simpson Manufacturing. Without all of her work experience with the company, Ms. Colonias would not have been able to hold such a prestigious and rigorous position. John G. Figueroa- Director o John G. Figueroa joined the Board of Directors in October 2010. Mr. Figueroa serves the dual roles of CEO of Apria Healthcare Group Inc. and chairman of Apria's board of directors. o A graduate of the University of California at Los Angeles with Bachelor's degrees in English and Political Science, Mr. Figueroa also holds a Master's Degree in Business Administration from Pepperdine University, where he was honored as a Distinguished Alumnus. o Mr. Figueroa's educational background, along with his expertise in the industry through his position as the president of McKesson Corporation's U.S. Pharmaceutical Group from 2006 to 2010, and being responsible for operations and sales positions in the company's Supply Solutions, Pharmaceutical and Health Systems groups from 1997 through early 2006 definitely serve as an asset to his current position of being Apria Healthcare Group Inc.'s CEO and the chairman of Apria's board of directors. Thomas W. Gimbel- Director o Thomas W. Gimbel was appointed a director of Reliance in January 1999. Mr. Gimbel serves as a member of our Nominating and Governance Committee. He is also a Certified Public Accountant. o Mr. Gimbel holds a Bachelor of Science in Finance & Accounting from the University of Southern California. o Between 1984 and 2006, Mr. Gimbel was the president of Advanced Systems Group, an independent computer consulting firm. From 1975 to 1984, he was employed by Dun & Bradstreet. Having served over 30 years in the industry, Mr. Gimbel's expertise is uncompromisable. Dave H. Hannah- Director o In May 2015, Dave Hannah stepped down as Reliance's Chief Executive Officer, yet remained active in the day-to-day operations of the company as Executive Chairman of the Board. He retired from this position in July 2016 but using all of his knowledge and experience from holding those positions, Mr. Hannah continues to serve as a strong Reliance Board Member. o Unfortunately, Mr. Hannah's educational background could not be traced. Douglas M. Hayes- Director o Douglas M. Hayes became a director of Reliance in September 1997. From 1986 to his retirement in February 1997, he was managing director of investment banking at Donaldson, Lufkin & Jenrette Securities Corporation which allowed him learn about the crucial building blocks needed to lead a successful team. This definitely helped in becoming a director of Reliance. o Unfortunately, Mr. Hayes' educational background could not be traced. Robert A. McEvoy- Director o Robert A. McEvoy was appointed to the Board of Directors in October 2015. He brings a wealth of experience in the metals industry, mergers and acquisitions, corporate finance, and equity portfolio management to this new role. o Mr. McEvoy's investment banking and equity investment background, including his particular focus on the metals and mining industry and prior investment banking and analyst experience with Reliance, enables him to assist the Board and the Company through his combined knowledge of the Company, the industry and competitors, the capital markets and financing strategies. o Mr. McEvoy received a Bachelor of the Arts in History and Art History from the University of Virginia. Gregg J. Mollins- President, Chief Executive Officer & Director o In May 2015, he succeeded David Hannah as Reliance's Chief Executive Officer, and has been with Reliance for 39 years. o Unfortunately, Mr. Mollins' educational background could not be traced. o Mr. Mollins' does have 10 years' experience in the metals industry. Andrew G. Sharkey- Director o Andrew G. Sharkey, III was appointed a director of Reliance in July 2007. Mr. Sharkey serves as a member and the Chair of our Nominating and Governance Committee and a member of our Compensation Committee and our Audit Committee. o Mr. Sharkey earned an MAT degree from Duquesne University and a BA in Political Science from Yale University. Douglas W. Stotlar- Director o Douglas W. Stotlar joined the Board of Directors in October 2016. Mr. Stotlar serves as a member of our Compensation Committee and our Audit Committee. o Mr. Stotlar received a Bachelor of Science degree from The Ohio State University. o Mr. Stotlar was President and Chief Executive Officer of Con-way Inc. from 2005 until its acquisition by XPO Corporation in 2015 which allowed him to offer incredible industry expertise when he joined the Reliance BOD. Reliance Steel and Aluminum Co.'s Top Executive Managers include: Gregg J. Mollins- President, Chief Executive Officer & Director o In May 2015, he succeeded David Hannah as Reliance's Chief Executive Officer, and has been with Reliance for 39 years. o Unfortunately, Mr. Mollins' educational background could not be traced. o Mr. Mollins' does have 10 years' experience in the metals industry. Karla R. Lewis- Senior Executive Vice President & Chief Financial Officer o Karla Lewis earned a BS in Business at Ohio State University, and later became a certified public accountant. In May 2015, Karla was promoted to Senior Executive Vice President and Chief Financial Officer. James D. Hoffman- Executive Vice President & Chief Operating Officer o As Executive Vice President & Chief Operating Officer, he oversees all of Reliance's operating businesses. James is also a Director at the Metals Service Center Institute. o It was the sales and operations sides of the business which piqued his interest and allowed him to apply his degree in Advertising and Marketing as well as why he pursued becoming a COO. o James Hoffman has a Bachelor of Science in Advertising & Marketing from West Virginia University. William K. Sales, Jr.- Executive Vice President, Operations o In May 2015, he was promoted to the position of Executive Vice President of Operations. Additionally, he has been a director at the Metals Service Center Institute since 2011, and is the Chair of its Aluminum Products Division Council. o Mr. Sale's knowledge of the supply side of the metals industry made him a great fit to head up Reliance's non-ferrous operations, of which he took the helm in 1997. o From both strategic acquisition and operational standpoints, Mr. Sales experience has been instrumental to Reliance's growth. o Mr. Sales has a BS in Industrial Engineering from Louisiana Tech and a MS in Industrial Engineering from Louisiana State University. Stephen P. Koch- Senior Vice President, Operations o Stephen Koch plays an integral role in Chapel's expansion over a 22-year career, was promoted as the Executive Vice President and President, after the company was acquired by Reliance in 2005. Mr. Koch transitioned to Reliance's corporate office to take on the position of Senior Vice President of Operations in 2010. o Mr. Koch's experience as the Sales Manager and VP of Operations gave him the skills he needed to excel in his career and make it as Chapel's Executive Vice President and President. o Stephen Koch has a BA in Public Relations and a minor in Business Administration from Shippensburg University. Michael P. Shanley- Senior Vice President, Operations o Beginning in April 2015, Mike took on the role of one of Reliance's Senior Vice President of Operations. He is responsible for overseeing the operations of a number of Reliance subsidiaries and divisions. o Mike's previous experience being the Vice President and General Manager of one of Liebovich Bros.' divisions, Hagerty Steel & Aluminum allowed him to gain the information and skill set to lead Reliance's top teams. o Unfortunately, Mr. Shanley's educational background could not be traced. William A. Smith II- Senior Vice President, General Counsel & Corporate Secretary o Will joined Reliance as Vice President, General Counsel and Corporate Secretary following Reliance's acquisition of Metals USA in 2013. o As Senior Vice President, Chief Legal Officer and Corporate Secretary of Metals USA, Will managed the company's 2010 initial public offering and other corporate and transactional matters. o Mr. Smith's knowledge and expertise definitely served as an asset when he was chosen to join the Reliance team as VP. o William Smith earned his J.D. from Georgetown University Law Center and his A.B. from Georgetown University. 7. Corporate Governance Stock Ownership Requirements Every director that is associated with Reliance is required to own shares of the corporation's common stock. The directors have to own the equivalent of $400,000 of common stock and have five years to acquire and maintain that amount of the corporation's common stock. Committees Reliance's Board currently has three standing committees consisting of the Audit Committee, the Compensation Committee, and the Nominating & Governance Committee: 1. Audit Committee The Audit Committee is in charge of appointing, \"the independent registered public accountants, approves the engagement of the independent registered public accountants for all non-audit services, and pre-approves all fees for the independent registered public accountants\" (Reliance). The Audit Committee also monitors and provides, \"oversight to the internal audit function, monitors the effectiveness of the Corporation's internal financial controls and oversees the integrity of the Corporation's financial reporting, and monitors the Corporation's compliance with legal and regulatory requirements\"(Reliance). The reviews and discussions outlined in the company audited financial statements are included in the Reliance Annual Report on Form 10-K for filing with the Securities and Exchange Commission. The Audit Committee also evaluates and selects the Reliance independent registered public accounting firms for the upcoming year. 2. Compensation Committee The Compensation Committee, \"approves and recommends, for approval by the independent directors, salaries, performance bonuses, equity awards and other matters relating to compensation of the senior management of the Corporation,\" following the annual review of the CEO and the management team by the non-management directors. The Compensation Committee also administers and reviews the Corporation's equity award plans. 3. Nominating and Governance The Nominating and Governance Committee ensures that the Board and each of its standing committees are appropriately constituted by examining corporate governance matters, assessing Board membership needs, and recommending candidates for Board membership. The Nominating and Governance Committee also monitors compliance with the Corporation's code of conduct and applicable regulations regarding ethics, conflicts of interest and independence. Annual Evaluation Reliance board members have an annual review of their performance, which is conducted by the entire board. Not only does the board get an annual review, each committee is reviewed by the members of each committee. After the committee review has been conducted, the results are reported to the board. Reliance is a company that takes their leadership roles seriously, which is why the annual evaluations are extremely important. 8. External Environment A. Natural Environment 1. Aluminum was once a once-scarce source that became affordable and plentiful thanks to technological advances. This has been a positive effect on the company because it has allowed the development of the material to become more accessible. (IM) 2. Aluminum's rarity comes down to chemistry. Technically, behind oxygen and silicon, it's the third most abundant element in the Earth's crust, making up 8.3 percent of the weight of the world. Today it's cheap, ubiquitous, and used with a throwaway mindset. (IM) B. Societal Environment 1. Economic a) According to the Financial Post, oil and gas activity shrunken followed by job losses in the energy sector (business.financialpost.com). (T) According to the company's quarterly earnings, energy (oil and gas) demand for the products Reliance sells had remained weak. b) According to Chicago Fed Letter, nonresidential construction, the largest market for steel, grew quite modestly (chicagofed.org). (O) Non-residential construction demand remains relatively steady for Reliance. This important end market will continue to experience gradual, positive growth in the coming quarters and that Reliance is well positioned to absorb increased volume into its existing cost structure as this market improves over time. 2. Technological a) According to NWI Times, industries foresee high-tech future with fewer workers (Joseph S. Pete, nwitimes.com). (T) At Reliance, they're all about treating their employees like family. If Reliance participates with this trend, they could lose the trust of their employees and create no longer a safe workplace for their employees. 3. Political-Legal a) The Employment Law Guide describes the major statutes and regulations by U.S. Department of Labor (DOL) that affect business and workers (dol.gov). (O) These developed wage, benefit, safety and health, and nondiscrimination policies can ensure their employees are treated fairly. 4. Sociocultural a. Two-thirds of consumers agree, \"Being trapped in a two-year contract is annoying.\" Thus, car leasing is on the rise (mindshareintheloop.com). (O) Automotive demand remains strong for Reliance. They support the automotive market mainly through the Company's toll processing operations in the U.S. and Mexico and continue to increase its toll processing volume through investments in new facilities and processing equipment primarily to support incremental demand from the increased usage of aluminum by the automotive industry. b) According to the Pew Research Center, Americans are more racially and ethnically diverse that in the past, and the U.S. is projected to be even more diverse in the coming decades (pewresearch.org). (O) One of Reliance's core values that their culture draws on is diversity. 5. Ecological a. Pollution Prevention (P2) waste prevention is becoming a business strategy for any company (epa.gov). (O) Reliance encourages innovation in the company's processes and products to minimize or prevent the creation of waste and the discharge of contaminants to the air, land or water (siskin.com). C. Task Environment 9. Internal Environment Corporate Structure Generally, Reliance Steel and Aluminum's corporate structure is comprised of a board of directors and top executive managers. The directors are comprised of experienced and top professionals from various backgrounds and help to maintain accountability of the company's executives. The board of directors is comprised of three standing committees, which include the audit committee, compensation committee and the Nominating and Governance committee. The top executive managers led by the Chief Executive Officer are in charge of various operational functions of the company. In my view, the corporate structure of Reliance Steel and Aluminum helps to put in place a system of controls that guides the corporate leaders. However, the system is not appropriate for speedier decision making since the top management has to consult with the directors before making any important decision that affects the organization. Corporate Culture Reliance Steel and Aluminum corporate culture is one that encourages decentralization of management to its main subsidiaries. This allows the subsidiaries to become experts in their core areas. Also, the company's employees come from the local communities to enable them provide excellent and customized services to the consumers since local employees understand their markets better. The corporate culture of empowering local communities, local employees and decentralization of management enables the company to achieve and maintain competitiveness of the company since the subsidiaries are able to interact more with the local communities and understand their needs better. Corporate Resources Marketing plan is one of the important tools of Reliance Steel and Aluminum. It specifies what Reliance Steel and Aluminum offers and how it markets its products and services. The four P's of the company's marketing plan include product, price, promotion and place. The company provides value added processing services and distributes 100,000 metal products to more than 125,000 customers. Also, the company provides their customers with readily available inventory, reliable and timely delivery, flexible minimum order size and quality control. In terms of distribution, the company uses a decentralized management business model that empowers subsidiaries to provide products and services at their convenient locations. Reliance Steel & Aluminum Co. does not currently have an R&D section listed on their website. Other important resources of Reliance Steel and Aluminum include a strong financial profile and human resources. Being the largest metal service company in North America, Reliance Steel and Aluminum is able to use its financial might to acquire and establish new subsidiaries. The company boasts of its skilled human resources and expertise that is able to adapt and respond quickly to their regional and industry conditions in the local communities. Strengths and Weaknesses - A strong system of internal controls comprising of directors and top executives (S) -This observes decision-making process to check against the excesses of the management. - Length decision-making (W) - Directors and top executives have to consult while making critical decisions in the firm. - A decentralized culture of decision-making (S) - Allows subsidiaries to become experts in their local communities and offer services valued by customers. - Skilled human resources and expertise (S) - The human resources are able to adapt and respond quickly to their regional and industry conditions in the local communities. - A decentralized form of control (W) - leads to pursuance of conflicting sub-optimal goals by the subsidiaries. - A strong financial position (S) - This is indicated by a strong liquidity position, gross profit margins, net margins and returns on investment. - Too many days of inventory (W) - Much capital is tied up in holding inventory. Financial Section Liquidity Ratio Current Ratio 201 2014 2013 5 Reliance Steel and Aluminum 2.58 4.7 4.78 Ryerson Holding Corp RYI 2.69 2.47 3.04 Worthington Industries, Inc. 1.93 2.03 1.89 The current ratio measures the ability of the firm to meet its short term maturing obligations as they fall due using its current amounts of current assets. In relation to the calculation above, Reliance Steel and Aluminum's current ratio for the year 2015 was 2.58. This indicates that the company's amount of current assets are more than the current liabilities and thus, the firm is highly liquid and can settle its short term obligations as they fall due. A strong current ratio is important since it means that the firm has adequate cash and other assets that can be quickly converted to cash to pay any maturing obligations. A current ratio of 2.5 is favorable to the company and it's a strong indicator of liquidity level. However, the current ratio of Reliance Steel and Aluminum declined in the year 2015 from a current ratio of 4.7 in the previous year, which shows a declining liquidity position of the company. Generally, Reliance Steel and Aluminum had better liquidity ratios than its competitors except in 2015, when its liquidity ratio fell below that of Ryerson Holding Corp RYI. This means that Reliance Steel and Aluminum was better to positioned to settle its maturing obligations better than the competitors. Profitability ratios a. Gross profit margin Gross Profit Margin 2015 2014 2013 Reliance Steel and Aluminum 0.272 0.25 0.26 Ryerson Holding Corp RYI 0.1792 0.163 9 0.1782 Worthington Industries, Inc. 0.14 0.16 0.15 2015 2014 2013 Reliance Steel and Aluminum 0.03 0.04 0.03 Ryerson Holding Corp RYI -0.02 -0.71 3.68 Worthington Industries, Inc. 0.02 0.05 0.05 b. Net profit margin Net Profit Margin In relation to the profitability ratios, Reliance Steel and Aluminum made positive margins as indicated by the net profit margin. Ideally, net profit margin calculates the returns of an organization, which is the net profit after deduction of all expenses divided by the total amount of sales. A net profit margin of 3.33 percent means that the company was making positive earnings and was profitable in the period of operation. This implies that the company's expenses and total costs of goods sold were actually less than the total amount of sales made during the period. On the other hand, a gross profit margin of 27.2 percent means that Reliance Steel and Aluminum was making positive margins from its sales after deducting the costs of all goods sold. Gross profit margin is a measure of profitability and shows the returns of the organization after deducting costs of goods sold but before the expenses incurred during the period. A positive gross profit margin indicates that the firm is actually making earnings from its sales but may not actually indicate the amount of expenses incurred during the period. Generally, the gross profit margin of Reliance Steel and Aluminum improved in the year 2015 compared to the previous year 2014. However, the net profit margin declined slightly in 2015 compared to the year 2014 which implies that the expenses of the company increased that lowered the net profit. The decline in the net profit margin of the company shows slowing profit levels of the company. Compared to its major competitors, Reliance Steel and Aluminum had better gross profit margins. However, the net profit margin of the company was the lowest in 2013 but then improved to surpass the competitors in 2015 in which the company recorded the highest net profit margin. This means that Reliance Steel and Aluminum was the most profitable company in 2015 compared to its major rivals. c. Return on investment Return on Investment 2015 2014 2013 Reliance Steel and Aluminum 0.0666 0.074 7 0.0755 Ryerson Holding Corp RYI 0.0146 0.018 3 0.018 Worthington Industries, Inc. 0.0711 0.1192 0.1182 In terms of return on investment, Worthington Industries, Inc. has the highest returns followed by Reliance Steel and Aluminum. Based on the calculation above, it is evident that Reliance Steel and Aluminum made 6.66 percent, which is the return of its invested capital over the entire year of 2015. Return on investments shows each dollar earned by a company from its total invested assets in the business. A return on investment of 6.66 mean that the company made at least 0.0666 dollars from each dollar of asset invested in the business. This implies that the firm was actually generating incomes from its composition of both current and non-current assets. 1. Asset Management Ratios a. Days of inventory Days of inventory 2015 201 4 2013 Reliance Steel and Aluminum 85 77 75 Ryerson Holding Corp RYI 91 89 93 Worthington Industries, Inc. 49 53 63 In terms of the calculation above, the days of inventory which shows the number of days inventory is sold increased in the year 2015 to 85 days compared to an average of 77 days in 2014 and 75 days in 2013. The increase in date of inventory is unfavorable since it indicates that the company was selling its inventory slower to get cash in the year 2015 compared to the previous year of 2014 and 2013. The days in inventory in both years were extremely high which means that the company was taking over two and half months to convert its inventory into cash. Therefore, a lot of cash is trapped in holding inventory, which is not favorable for the company. The high number of inventory days may also signify increased risks of obsolescence of the company inventory, which is an unfavorable outcome for the organization. Generally, Worthington Industries Inc. performed better than Reliance Steel and Aluminum in converting its inventory into cash as shown by fewer days of inventory. b. Average collection period Average Collection Period 2015 201 4 2013 Reliance Steel and Aluminum 37 42 43 Ryerson Holding Corp RYI 41 42 41 Worthington Industries, Inc. 59 59 61 In regard to the calculation above, the average collection period declined in the year 2015 to 37 days compared to 42 days in 2014. The decline in the average collection period is positive since the collection period shows the number of days taken to collect all outstanding accounts from sales made on credit. The decline in the average collection period indicates that debtors were taking lesser time to settle their outstanding accounts thus enabling the company to have higher cash reserves that could be used to finance its operations. When accounts are settled on time, the organization can utilize the receipts to finance its operations and projects, which is good for the company. Generally, Reliance Steel and Aluminum had the lowest average collection period in 2015, which mean that it was collection its accounts much faster compared to its rivals. Worthington Industries, Inc. recorded the worst average collection period over the three years compared to its major competitors. 4. Leverage Ratios a. Debt to asset Debt to asset 2015 201 4 2013 Reliance Steel and Aluminum 0.45 0.48 0.47 Ryerson Holding Corp RYI 1.09 1.06 1.06 Worthington Industries, Inc. 0.62 0.64 0.63 Generally, the debt to total asset ratio of Reliance Steel and Aluminum Company fell from 0.48 in the year 2014 to 0.45 in the year 2015. The decline in the debt to total asset ratio implies that the company was using less debt to finance its operations in the year 2015 compared to 2014. A decline in debt to total asset ratio is good for the company especially because high levels of debt are associated with increase in financial distress of the company. As indicated in the calculation above, it is evident that Reliance Steel and Aluminum had the lowest debt to asset levels, which means that it has a very favorable leverage compared to its rivals. b. Times interest earned Times interest earned 2015 2014 2013 Reliance Steel and Aluminum 4.24 5.06 4.82 Ryerson Holding Corp RYI 1.02 0.75 1.13 Worthington Industries, Inc. 4.16 9.15 9.42 The times interest earned ratio declined in the year 2015 to reach 4.24 from the previous year's ratio of 5.06. Essentially, times interest earned ratio measures the company's ability to pay off its interest expenses using its available earnings. The decline in the times interest earned ratio suggests that the company's ability to pay off its interest expenses using its available earnings declined in the year 2015 compared to the previous year of 2014. This is not a favorable outcome for the company since it means increased costs of obtaining and servicing short-term debts by the company. In terms of times interest earned, Reliance Steel and Aluminum performed better than its main rivals in the year 2015. However, Worthington Industries, Inc. had better times interest earned ratios in the year 2014 and 2013. 10. Strategic Issues 1. Strengths A strong financial position (S) Reliance Steel & Aluminum Co. has a strong financial position due to their successful acquisitions, providing what the customer wants and being a leader in innovation. The company maintains a strong liquidity position, gross profit margins and return on investment. A decentralized culture of decision making (S) One of the company's top strengths is their decentralized decision making system throughout their facilities in different countries and locations. This allows each facility to become experts in the specific field they are pertaining to. 2. Weaknesses Long inventory (W) The company has too many days of inventory, which can be hard to avoid with the type of industry, it operates in but there could be improvements made. There is a lot of capital tied up in holding inventory. Length decision making (W) Reliance Steel & Aluminum Co. tends to have a long decision making process that involves consulting with all directors and top executives for most decisions. This can be considered a strength but because the company is more spread out globally, it can delay big decisions. 3. Opportunities Automotive demand remains strong (O) The automotive industry is one of RSAC's largest customers. Cars are made of a variety of metals and the fact that American's are wanting to lease cars more than purchase, means more manufacturing of newer cars on a regular basis. This is extremely important to the continued success of Reliance Steel & Aluminum Co. in the U.S. and globally. Environmental protection laws (O) One of Reliance Steel & Aluminum Co.'s biggest opportunities is through continued prevention of waste and discharge of contaminants from manufacturing to the land, air and water surrounding the facilities. With a focus on continued research and innovation, RSAC can continue being a leader in this industry as social responsibility to the environment is becoming more important to people. 4. Threats Trending - more robots, fewer workers (T) With the current and continuing trend of implementing more machines and robots, job loss could be at stake. Not potentially in the near future but eventually, it may become more cost effective for the company to eliminate some workers and implement a robot to do the work. Energy sector (T) The oil and gas industry has experienced shrinkage due to job cuts and job losses. A large part of the metals industry's business comes from that sector. With smaller demand and less people expanding into that industry, the need for building and metals is lessened. If the energy sector continues to not expand, continued loss of revenue from that industry will be expected. 11. Recommended Strategy Reliance Steel & Aluminum Co. has a generic strategy of differentiation. Differentiation is defined as \"the ability of a company to provide unique and superior value to the buyer in terms of product quality, special features, or after-sale service.\" (Wheelen, Hunger, Hoffman, Bamford. 2015) The company participates in a unique market and has gone through over 55 acquisitions to become the largest metals service center in North America. RSAC has developed a competitive differentiation strategy by responding to a niche market in the metals industry. By providing readily made metals, timely delivery, flexible minimum orders and customization, RSAC has produced an outstanding service with superior quality metals. The company's current corporate strategy is to focus on just-in-time inventory management and materials management to be outsourced in the capital goods and related industries. (Wheelen, Hunger, Hoffman, Bamford. 2015) Additionally, RSAC's focus is to continue to keep up with the industry trend by consolidating the metal service centers they operate within. The reason for the current trend in consolidating is based on the high costs of maintenance for the state-of-the-art processing equipment, increased information systems, economies of scale in purchasing and general turnover in ownership. The company focuses on being different from their competitors by performing value added processing techniques in the same facilities so that the products are ready to use. The have implemented a decentralized management model so that each area is able to focus on their expertise which leads to a more seamless end product and service. A.) The strategic alternatives for Reliance Steel & Aluminum Co. are a growth strategy, pause strategy or a retrenchment strategy. 1. Growth Strategy: Continue with acquisitions in the U.S. and globally by expanding into new foreign markets. Pros: More efficient product and manufacturing synergy, cost savings in manufacturing and global presence. Cons: Extensive financial costs in continued acquisitions into unknown markets. 2. Pause Strategy: Continue consolidating already acquired companies. Pros: No financial losses in possible new acquisitions and allows for continued stability in markets. Cons: No additional growth and loss of potential customers in new markets from competition. 3. Retrenchment Strategy: Sell locations in foreign markets and focus on one market to expand growth. Pros: Enables RSAC to continue being the dominating force in just the U.S. market. Cons: Losing out on becoming the industry leader globally. B.) The recommended corporate strategy for Reliance Steel & Aluminum Co. is a growth strategy with a focus on concentration in vertical growth. Because of RSAC's already stable performance in their industry, the company should move forward with continued work towards external growth. With the company already being the dominant force in North America, they should continue with additional smart acquisitions and possible strategic alliances globally. Continued vertical growth through acquisitions that eliminate middlemen and assist in continuing to streamline methods will draw new customers looking to cut costs on manufacturing, processing and delivery. Reliance Steel & Aluminum Co. can then turn their focus to continue their horizontal growth by moving into new global markets. Despite their presence in 40 states and 12 countries, RSAC has the potential to be the global leader in the industry and should continue to expand their growth in the countries outside of the United States. Steel will always be necessary to the world's infrastructure and ability to construct nearly everything so there is always room for opportunity and growth in this industry. The industry that Reliance Steel & Aluminum Co. competes in is a specialized industry so they compete by charging higher prices but with added value. The added value to their products is that their processes are more vertically integrated so they manufacture the metals, cut the metals, add processing techniques and do their own shipping and delivery to streamline costs. In comparison to some competitors, RSAC is more cost effective in the long run because they eliminate so many added costs by being partially vertically integrated but because of the specialized products, it is still considered a higher price, value added competitive strategy. 12. Strategy Implementation Our strategy would be implemented by focusing on the continued effort on: new product development, brand decisions and product life cycle. We are in a specialized product market, meaning that our organization's main focus is to create a certain product and sell it into several markets. There is a large number of competition in regards to our specializations which is the top issue facing the firm. Another issue is the increase of new development in regards to the way materials and resources are now being used. In order to stay on top, we are going to use our high-performance work practices such as comprehensive employee recruitment, incentive compensation and performance management systems and extensive involvement and training. Reliance Steel and Aluminum Co. continues to increase profitability and continues to be successful by hiring experiences board members and investors that have an eye to reach higher success. (Reliance Steel and Aluminum) 13. Evaluation and Control Just like every company, Reliance Steel & Aluminum Co. must have an appropriate strategy for measuring and evaluating performance. There are five steps in the evaluation and control process: Step 1: Determine what to measure based on strategy & implementation Step 2: Establish predetermined standards Step 3: Measure performance Step 4: Does performance match standards? Step 5: Depending on answer to step 4: Yes - Stop or No - Take corrective action Determining if the different processes throughout the company are working well and how they aren't is key to maintaining success and benefiting from the company's strategy. RSAC's strategy is differentiation and so evaluating and measuring performance based on Return on Investment (ROI) and Earnings Per Share (EPS) should be used. These measurements will help determine whether Reliance's strategy is effective and if customers are continuing to be willing to pay a higher cost for a premium product. In 2015, RSAC's net profit margin was 3.33%, which indicates that the company was profitable during that year. The company's total expenses and cost of goods sold was less than the total sales during the year. This shows that during 2015, their strategies were successful. Reliance Steel & Aluminum Co. is ISO 9001:2008 certified in 60% of their locations and additionally has certifications in different locations specific to the company's industries they serve, such as aerospace, nuclear and auto industries. Depending on what country, RSAC also maintains certifications based on international business. ISE 9001:2008 is a generic system that can accommodate all sizes of organizations and is applicable to all organizations. (ISO) It specifies requirements for a quality management system where an organization: Needs to demonstrate its ability to consistently provide product that meets customer and applicable statutory and regulatory requirements, and Aims to enhance customer satisfaction through the effective application of the system, including processes for continual improvement of the system and the assurance of conformity to customer and applicable statutory and regulatory requirements. (ISO) Despite Reliance Steel & Aluminum's continued positive results, the company should make investing into additional control systems a priority to ensure continued success. 60% is better than many companies performing nationally and internationally but to continue being the most innovative and dominant presence, certification in all locations would be ideal. 14. References "Reliance Steel & Aluminum Co." Reliance Steel & Aluminum Co. Web. 14 Feb. 2017. "Reliance Steel & Aluminum Co. | SEC Filings." Reliance Steel & Aluminum Co. 26 Feb. 2016. Web. 13 Feb. 2017. "ISO 9001:2008." ISO. Nov. 2008. Web. 13 Feb. 2017. Wheelen, Thomas L., J. David Hunger, Alan N. Hoffman, and Charles E. Bamford. Concepts in Strategic Management and Business Policy Globalization, Innovation, and Sustainability. 14th ed. Upper Saddle River: Pearson, 2015. Print. "Culture Vulture: 2016 Trends Report." Mindshare In The Loop. Web. 12 Feb. 2017. Cohn, D'Vera, and Andrea Caumont. "10 Demographic Trends That Are Shaping the U.S. and the World." Pew Research Center. 31 Mar. 2016. Web. 12 Feb. 2017. "Economic Outlook Symposium: Summary of 2016 Results and 2017 Forecasts - Federal Reserve Bank of Chicago." Economic Outlook Symposium: Summary of 2016 Results and 2017 Forecasts - Federal Reserve Bank of Chicago.Web. 12 Feb. 2017. Joseph S. Pete. "Steel Industry Foresees High-tech Future with Fewer Workers." Nwitimes.com. 09 Jan. 2017. Web. 12 Feb. 2017. "Employment Law Guide - A Companion to the FirstStep Employment Law Advisor." Employment Law Guide - A Companion to the FirstStep Employment Law Advisor. Web. 12 Feb. 2017. Cattaneo, Claudia. "Oil and Gas Sector to Shed 24,400 More Jobs in 2016, Says New Report." Financial Post. Web. 12 Feb. 2017. Fashion Institute of Design and Merchandising A Strategic Audit of Reliance Steel & Aluminum Company ROUGH DRAFT Winter 2017 BUMT 4450: Strategic Management Policies By: Neha Modha, Elisa Maglaqui, Dreaming Li, Serena Low, Roberta Nunez Date: 2.14.17 Table of Contents 1) Company Overview 2) Business Model a.) Five Steps of a Business Model b.) Analysis: Is Reliance Sustainable? Weaknesses? 3) Value Chain 4) Historical Performance 5) Current Situation 6) Strategic Managers a.) Board of Directors b.) Top Management 7) Corporate Governance a.) Stock Ownership b.) Committees c.) Evaluations 8) External Environment 9) Internal Environment 10) Important Issues Facing the Firm 11) Recommended Strategy 12) Implementation 13) Evaluation and Control 14) References 1. Company Overview Reliance Steel and Aluminum Co. was founded in 1939 in Los Angeles, California by Thomas Neilan. The company began as a small steel reinforcing distributor, and after 10 short years of being in business, Reliance added magnesium and aluminum to their line of products. 75 years after the beginning, Reliance Steel and Aluminum Co. continues to celebrate, affirm, and encourage the core values, both in the business practices and the company's local communities, by keeping the family of companies successful. Reliance Steel & Aluminum Co. became a Fortune 500 company in 2007 and has remained on that list ever since. Reliance believes that although one person can make a huge impact, keeping that movement going requires a team of people who are dedicated to making a different. The company believes they have that team. Reliance is proud of having a team who works hard to improve themselves by learning from one another. According to Reliance, \"Living out our core beliefs in each interaction with one another as well as with our customers and suppliers - in short, working towards something bigger than us - is one of the secrets of Reliance's longstanding success in the metals industry.\" The company believes that it is both the individual and combined strength of Reliance's Family of Companies that make them the industry leader. Reliance Steel and Aluminum Co.'s Vision Statement: Our history is the key to writing the story of our future. We strive to be a market leader, committed to setting industry leading standards in all measures of business performance and customer service. We expect all of our employees to exhibit the highest levels of personal integrity, teamwork, and appreciation for our diverse individual and company cultures. We believe in always treating people fairly, whether employee, supplier, or customer, while always looking for ways to improve our service and contribution to the communities in which we live and work. Reliance Steel and Aluminum Co.'s Values Our values reflect who we are; they are the pillars of our culture. Reliance's culture draws on our core values of leadership, people, service, diversity, accountability, and partnerships. 2. Business Model Five Elements Who Reliance serves Reliance Steel & Aluminum Co. serves over 125,000 customers by providing metals processing, inventory management services, and quick delivery. Reliance is capable of serving their customers by having over 300 locations in 40 states and 12 countries all based outside of the United States. By going global, Reliance is able to provide, \"value-added metals processing services and distributes a full line of over 100,000 metal products to more than 125,000 customers in a broad range of industries\" (RSAC). What Reliance provides Reliance provides metals that perform such value added processing as cutting to length; blanking; slitting; burning; plasma burning; precision plate sawing; sawing; shearing; and more before distributing metals products to manufacturers and other end- users (RSAC). Reliance offers a full line of more than 100,000 metal products. The orders are often fulfilled and delivered within 24 hours of receipt. Just a few of the products Reliance offers are galvanized, hot-rolled and cold-finished steel, stainless steel, aluminum, brass, copper, titanium, alloy steel and much more. Reliance Steel & Aluminum Co. also provides their customers with, \"readily available inventory, valueadded metals processing, reliable and timely delivery, flexible minimum order size and quality control\"(Reliance). How Reliance makes money Reliance's primary business strategy is to increase their operating results by expanding their existing operations and penetrating new markets through strategic acquisitions. Reliance pursues businesses that will increase their customer base, product breadth, and geographic presence. Reliance Steel & Aluminum Co. is known in the metals service center industry as the \"Acquirer of Choice.\" Reason being, Reliance offers their customers top quality metal and steel for affordable prices. How Reliance differentiates and sustains competitive advantage Reliance Steel & Aluminum Co. differentiates and sustains competitive advantage by being a strong competitor in such a niche market. Reliance is able to maintain their competitive advantage by focusing on just-in-time inventory management and materials management outsourcing in the capital goods and related industries. According to Reliance Steel & Aluminum Co.'s website, \"As the largest metals service center company in North America, Reliance will continue to be an active and strategic acquirer, at the forefront of consolidation in our large and still fragmented industry.\" Reliance has an incredibly strong financial profile, management philosophy, and acquisition expertise that allow them to have continued growth and profitability How Reliance provides its product/service Reliance provides its product/service by using a decentralized management business model, which allows them to empower their subsidiaries. By doing so, Reliance enables their subsidiaries to excel in n their areas of expertise which include: \"executives and employees at all levels are able to adapt and respond quickly to their specific regional, market, and industry conditions.\" Reliance is proud to have employees who provide excellent customer service to their consumers, who consist of local community members and neighbors. Reliance ensures high quality, quick turnaround, labor, and expense for their customers, which results in having over 90% of them return to do business with them. Reliance also aims to reduce their overall manufacturing costs while increasing profitability across their industry. Analysis: Is it sustainable? Any weaknesses? As a multinational company, Reliance Steel and Aluminum Co. has proven to be a sustainable company. After being in business for over 75 years, the company has grown to become one of the most reliable metal manufacturers in the world. Their business strategy and the size of the company allows for the company to stay competitive in their niche industry. Although Reliance Steel and Aluminum Co. is a sustainable company, just like any other company, it does have a few weaknesses to overcome. Some of their weaknesses include inappropriate handling of the environmental interest groups, high gearing, and capital blocked in-group company investments. Reliance needs to understand the environmental concerns that come along with being a manufacturing metal company. As long as Reliance does not add on to their list of weaknesses, it is safe to say that the company will remain sustainable. More of the weaknesses will be discussed in the external and internal parts. 3. Value chains Esteem Chain is the procedure or exercises by which an organization increases the value of an article, including generation, showcasing, and the arrangement of after-deals benefit. Fabricating organizations normally make esteem chain by gaining crude material and utilizing it to deliver something valuable. For this situation steel and aluminum is being delivered. Dependence Steel and Aluminum Co. produce six unique sorts of materials and in an assortment of various structures. This is a solid trademark since it draws in every diverse sort of clients that need an assortment of things created. What's more, they proceed with their solid esteem chain by keeping and picking up financial specialists, advancing by h