Foreign Market Entry

Assignment # 4: Foreign Market Entry and Diversification

1. Discuss trends in the steel industry and how it may impact Nucor’s strategy.

The steel industry is a volatile and unpredictable market that is reaching its maturity level. The unpredictability and volatility of the steel market depends on the status of the global economy. Many American steel industries have disappeared in the last quarter of a century due to new foreign steel competitors penetrating the American market. Nucor evolved from an electronic and nuclear business which were not profitable and focus on its profitable subsidiary from South Carolina, Vulcraft. In the mid 1960’s Vulcraft was involved in the joist business. Nucor’s cost cutting strategies and innovative managerial skills in technology and human resources have given them a competitive advantage among other American steel industries. Nucor Corporation focus on having the latest technology on its steel plants and ability to increase efficiency with its plant managers with performance based compesation; Performance Based Compensation is a financial reward by providing for increased production at each of the decentralized plants. One example of Nucor being a technological leader in the steel industry, was when it became one the first steel companies to use Nucor was among the first steel companies in the United States to use electric arc furnaces to melt recycled steel.

After the 9/11 terrorist attacks on the United States, the global demand and specifically the American demand took a downturn. Nucor has survived the alleged “dumping” strategy of its Asian steel competitors. Nucor claims the Asian steel markets due to low labor costs have purposely flow the American market with steel at an extremely low price. This strategy of filling the American market with cheap steel has led to many American steel industries to go bankrupt. Nucor with its emphasis on technology and productivity has been able to capitalize by...