The document discusses Nucor Corporation, a major American steel producer. It outlines Nucor's strategy of maintaining low costs through flexible minimill production and a decentralized organizational structure. This allows it to compete effectively on price while still ensuring product quality. Tables show Nucor's strong financial performance over time compared to competitors. The organizational structure employs a decentralized model with divisional autonomy to promote efficiencies.

1. Dandalina – Erlis
Nia – Satrio
MBA Shariah 2, SBM ITB

2. Steel is a
cornerstone and
key driver for the
world’s economy

6.  Financial Strength
 Cost Structure
Low & Highly Variable
 Highly Flexible Production
Capabilities
 Product Diversification &
Market Leadership
 Nucor’s People = THE RIGHT PEOPLE
for our culture!!!

7. LONG-TERM PROFITABLE GROWTH
Net Income 2000-2008 (millions of dollars)
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
2000 2001 2002 2003 2004 2005 2006 2007 2008

8. 33.6%
35 32.2% 32.5%
30
26.8%
25
21.1%
20
15
10
5
0
Gerdau Commercial U.S. Steel Steel Dynamics NUCOR
Ameristeel Metals
8

9. 61.9%
60
51.1%
50 44.7%
39.0%
40
28.3%
30
20
10
0
Steel Dynamics Gerdau Commercial U.S. Steel NUCOR
Ameristeel Metals
9

10. Diversified Product Mix
2008 Sales Tons
Nucor is North America’s Most Diversified Steel Producer
Sheet - 30%
Bars - 21%
Structural - 11%
Plate - 10%
Downstream Products - 14%
Raw M aterials - 14%
PRODUCT DIVERSIFICATION REDUCES EARNINGS VOLATILITY!!!
10

11. Highly flexible
production process
utilizing electric arc
furnaces and highly
productive labor
allow Nucor to
almost
instantaneously
adjust output to
match market
demand
11

13. The Business Week 50: The Best Performers
April 6, 2009
Top Stories
The BusinessWeek
50: The Best
Performers
From 3D software
designer Autodesk
to steelmaker
Nucor, our annual
list of top
performers shows
innovation remains
the engine of
success
13

14. LONG-TERM PROFITABLE GROWTH
Net Income 2000-2008 (millions of dollars)
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
2000 2001 2002 2003 2004 2005 2006 2007 2008

15. Krisis Ekonomi 2008 telah membuat demand
untuk baja berkurang sangat
signifikan, demikian juga laba bersih perseroan

16.  Slowdown was
occurring
already before
the financial
shock
 The financial
shock reduced
capital
availability
 Causing a
contraction in
fixed asset
investment
(OECD)

17.  The challenges :
1. To asses the threats & opportunities
2. To select the best strategies & structure
 Key succes factor : established organization
design, management philosophy, incentive
system.

18.  3 Divisions : joist plants, steel mills, &
miscellaneous plants.
 Decentralized operation with own
manufacturing, selling, accounting, engineering,
& personnel management. 4 levels from top to
bottom
 expect to earn 25% of ROA
 Efficiencies : scrap steel from independent
broker, actual shipping cost, no volume
discount, just in time.
 Organizational style : not constrained, “Stripped
down” & “No nonsense”. Informal, trusting, not
bureaucratic.

19.  Informal, trusting, not bereaucratic. Each month :
financial consolidation, sharing
information, corporate mgt examination
 High Competition for many small customer : Cost
Leadership.
1. Vulcraft The Joist Divisions : steel joist & joist
girders, high competion, the largest supplier in
1975, price & delivery performance
2. Steel Divisions : Provide raw material for the
vulcraft plants 75%, other customer 25%, the first
that build a mini mill to manufacture steel
3. The Steelmaking Processing

22.  The first is industry competitors, which is the intensity of
rivalry among firms in the industry. There are two basic types
of competition; price and quality. Nucor focused on the
manufacturing segment know as minimills and thus saved on
costly labor, raw materials, and the capital-intensive
machinery necessary to produce steel from iron ore. “Nucor
was able to expand sales from the minimills by keeping costs
below its competitors.” Also, another means of maintaining
quality control and costs was a “highly decentralized
organizational structure.” Corporate staff was kept to a
minimum and individual plant-level mangers were given
authority on decisions. By using the minimills and keeping
the corporate staff to a minimum, costs would be kept at a
minimum and quality would still be maintained; thus keeping
the industry competitors in a need to keep up.

23.  The second is new entrants which were threats of
new competitors entering the market. As was
said before; the minimills and minimum
corporate staff helped keep prices below
competitors. In addition, the risk of adapting an
untested German process for manufacturing flat
steel also paid off and helped get the company
ahead of the competitors. This process was quite
a risk for the Nucor Company but Ken
Iverson, CEO, made the decision and luckily it
paid off. Again by keeping price down and quality
up, new entrants were kept from coming in and if
they did decide to enter it would take them a lot
to get up to Nucor’s level.

24. Porter 5 Forces of Nucor
Strategy
 The third and fourth are the bargaining power of
consumer and buyers and these two are
controlled by also keeping the costs down and
the quality up. As long as Nucor carefully
monitored costs and paid attention to the needs
of its markets, then it had the upper hand in the
decisions of the company because as long as
they keep the top standing as cheapest and best
quality production, then the consumer and
buyers have no where else to go and thus can
only follow what Nucor decides and therefore
gives it the upper-hand.

25. Porter 5 Forces of Nucor
Strategy
 The fifth force is substitutes which is the
threats of substitute products or services.
This also is answered with; as long as prices
are kept at a low and quality kept at a high
then Nucor has the upper hand and people
would have no need to go and find other
substitutes elsewhere.

26. Several structure forms are used to implement
strategies, including:
 1. Simple
 2. Functional
 3. Multidivisional

29. FK Iverson
HD Aycock
Chairman
President/COO
President/CEO
Samuel Seigel
Personnel Planning
VP Finance
Research Chemicals
VP & GM Nucor VP & GM Vulcraft
Steel 4 steel mills 6 jist plants Machined Products
Fastener
Grinding Balls
Cold Finish
VP & GM

31. Dan DiMicco
Vice Chairman President/CEO
Jim Coblin Jeff Kemp
Rae Eagle GM GM
Terry Lisenby VP Human GM Strategic
GM Secretary Construction Environment
EVP CEO, Resources Planning
Treasurer
Eliz Bowers
GM Taxes
James Fries Joseph Rutkowski
GM Controller Ham Lott EVP International
Mike Parrish John Ferriola
EVP Div.
EVP EVP
6 joist plants
9 bar mills 3 sheet mils
3 cold finish
1 fastener mill Nucor/Yamato
1 grinding ball
Robert Johns
Director Marketing
Sheet mils