Ncor Corp. PPT
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Transcript of Ncor Corp. PPT
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CASE-1
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COMPANY OVERVIEW
1950-60 Nuclear Instrument & Electronics Business
1964 Bankruptcy Appointment of new CEO: K. Iverson
1966 Expansion of Steel Joist Business
1968 Backward Integration into Steel Making
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1972 Adopted the name Nucor Corporation
1985 Became the 7th largest Steel Manufacturer in North America
2000 New CEO & President D. DiMicco
2005 Became the 2nd largest Steel Manufactures in North America
2006 Surpassed US Steel in terms of Sales Revenue & Output
2006 - Largest Steel Producer in North America & 3rd largest in the world
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ORGANIZATIONAL STRUCTURE
Chairman
Plant Manager
Department Manager
Supervisor
Fixed / Hourly Workers
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PORTER’S FIVE FORCES ANALYSIS
Bargaining Power of Buyers
Bargaining Power of Suppliers
Threat of Substitutes
Threat of New
Entrants
Internal Rivalry
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BARGAINING POWER OF BUYERS
• Increasing Competition in the Domestic market increased the options for Buyers
• Low Product Differentiation
• Buyers Buying in large scale posses strong negotiating power
• Switching Cost is low
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BARGAINING POWER OF SUPPLIERS
• Few Suppliers• Scarcity of Raw Materials• Most of the Raw Materials are imported
THREAT OF SUBSTITUTES• No Primary Substitutes• Secondary Substitutes: Aluminum, Plastic and
wood
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THREAT OF NEW ENTRANTS
• Huge Capital Requirement• Low access to Raw Materials• Lack of Product Differentiation
INTERNAL RIVALRY• Domestic Market – more than 20 players• Intense Rivalry – Price Wars• No Competitive Advantage
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• High Productivity
• Low Cost Leader in North America
• Technological Innovation
Strengths
• Market Price dependent on Demand-Supply
• Too Much dependence on US Economy
Weaknesses
• Expansion of Operations
• Innovative Joint Ventures
• Patent Technologies
Opportunities
• Foreign Imports
• Increasing Energy Prices & Labor Costs
• Environmental Issues
Threats
SWOT
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PRODUCT LINE
Structural Steel Structural Carbon Angles Alloy Steel
Steel Bars Steel Wires Wide Frame Beams Steel Sheets
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RECENT PRODUCT PRICESPeriod Steel Sheet Steel Bars Structural
SteelSteel Plates
2014 (in $) (in $) (in $) (in $)Q1 1350 1028 1210 1526
Q2 1218 998 1148 1416
Q3 1046 992 1122 1250
Q4 1166 1082 1268 1368
2013 (in $) (in $) (in $) (in $)Q1 1188 1086 1298 1396
Q2 1250 1134 1162 1526
Q3 1346 1202 1406 1492
Q4 1248 1152 1454 1464
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STRATEGIES ADOPTED BY NUCOR
Managerial Strategy (K. Iverson)
Growth Strategies (D. DiMicco)
Operational Strategies (D. DiMicco)
HR Strategies (D. Aycock)
Marketing & Sales Strategies (J. Correnti)
Financial Strategies (D. DiMicco)
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MANAGERIAL STRATEGY
Low Cost Leadership Strategy
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GROWTH STRATEGIES
New Acquisitions
Continuous Plant
Upgradation & New Plant Construction
Low Cost Production
Joint Ventures
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OPERATIONAL STRATEGY
Fewer Production
Steps
Less Labor
JIT
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Major Incentive Plans
Production Incentive Plan
Dept. Manager
Incentive Plan
Professional & Clerical
Bonus Plan
Senior Officers
Incentive Plan
Other Incentive Plans
Profit Sharing
ESOPs
Fringe Benefits
401(k) Plan
Medical & Dental Plans
Scholarships
Service Awards
HR INCENTIVE STRATEGIES
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MARKETING & SALES STRATEGY
Sales to Proximity
Customers Contract Selling Cross Media
Story
Getting Employees Involved in Marketing
Collaborating With Influences
Marketing Partnerships
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FINANCIAL STRATEGIES
1 Price Hedging
2Licensing of Technology
3 Cost Minimization
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CRITICAL SUCCESS FACTORS
Low Cost Production Capability
Process Innovation Capability
Flexibility on Work Force
Strong Industrial
Collaboration
Better Technology
High Profit Margin
Leader in Environmental Performance
Increased market Share
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CURRENT STATUS OF NUCOR
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NET WORTH (in Billions $)
Year Nucor US Steel
2015 778 645
2014 538 521
2013 424 467
2012 628 368
2011 443 656
2010 367 559
2009 389 382
2008 297 427
2007 133 262
2006 486 345
2005 398 323
2004 221 142
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RATIO ANALYSIS2014 2013 2012 2011 2010
Nucor (EPS) $4.96 $5.99 $7.99 $5.64 $3.14
USS (EPS) $7.44 $18.04 $10.42 $7.99 $4.86
Nucor (ROE) 29.4% 28.1% 13.45% 7.23% 4.22%
USS (ROE) 15.9% 23.1% 11.46% 5.03% 3.70%
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CONCLUSION
• Nucor has a consistent activity system
• Nucor has shown great commitment towards its strategies by strengthening around its core elements
• Nucor has extraordinary strong relationships with workers and its customers
• Nucor never shied away from taking Risks
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RECOMMENDATIONS
• Reduce impact of Cyclical Demand
• Determine Products to be Eliminated
• Expand Global presence through M&A in Europe and Asia
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THANK YOU !!
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Case-2
EMERGING GIANTSBuilding World Class Companies in
Emerging Markets
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INTRODUCTIONWhat are Emerging Economies ?
Emerging economies/markets are countries that are restructuring their economies along market oriented lines and offer a wealth of opportunities in trade, technology transfers and FDIEmerging Market Economies - “BRIC” Economies
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TRADITIONAL VIEW ON EMERGING GIANTS
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What are Emerging Giants ?
An Emerging Giant must satisfy the following criteria:-
• It must be able to create value for its customers or producers of factor inputs by providing a product/service in the face of global competition.
• It must be able to generate adequate returns to its investors so that it can continue to attract the capital necessary to expand and grow.
• The company must be able to attain a critical size in terms of employees or assets, indicating that its business model is scalable and sustainable.
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Point of Difference Multinationals Emerging Companies
Goodwill
Access to Capital
Ideal Physical Domestic Infrastructure
Access to desired Talent Pool
Reliable Suppliers & Distributors
Access to Leading-Edge Technology
Stable Domestic Market Demand
Experienced Management & Leadership
Contribution towards GDP High Low
Product Maturity & Innovation High Low
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Is it even possible to achieve Competitive Advantage against Multinationals ??
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# Reason 1
Multinationals are faced with some of the same Intuitional Voids that Emerging Market
Companies have to contend with
Example - IKEA
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# Reason 2
Multinationals are often reluctant, to tailor their products and processes to each country that
they operate in
Example – McDonald’s & KFC
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# Reason 3
Due to Globalization, Emerging Market Companies are increasingly able to access
advanced markets institutions to offset some of the advantages multinationals have
Example – Tata Motors
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# Reason 4
Emerging Market Companies have attempted to cope with local Intuitional Voids by developing their own internal organizational mechanisms
Example - Samsung
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Generic Business Opportunities For Emerging Market Business To Build Competitive Advantage !!
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# Generic Opportunity 1
The emerging companies capitalize on their unique knowledge of the local product markets
Uniqueness may arise out of two reasons:• Unique local taste & customer’s need
• Unique local market infrastructure
They look towards other similar geographical markets while planning to go global
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Cont…
The emerging companies focus on niche opportunities, allowing them to stretch their
capabilities
Example – Nokia (Finland) Haier Group (China)
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# Generic Opportunity 2
The emerging companies capitalize on their superior ability to identify and manage local
talent & local supply chain to serve either local or global customers
Businesses built around this ideology are globally right from their inception as they are a
part of the global value chain
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Cont…These businesses expand their global footprint
in three ways:1. They look for customers in wider set of
advanced markets and try to serve them using their home country factor market base
2. As their home country factor markets begins saturating, they start looking for similar factor market opportunities in other markets
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Cont…
3. They try to go up the value chain
Examples – Infosys (India) Le & Fung (Hong Kong)
Inventec (Taiwan)
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# Generic Opportunities 3
Creating private sector businesses/market institutions to fill local intuitional voids in the
market infrastructure
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Cont…
These institutions can be classified into two:
1. Involves market institutions that facilitate information flow in the market
Subset 1- Enhances the credibility of claims made by producer of goods/services
Subset 2 - Analyzes information & provides recommendations to market participants
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Cont…
2. Involves market institutions creating forums where buyers and sellers can transact with each other directly
Examples – Agora (Poland) Emerge Logistics (China)
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Advantages to EMCs in developing such Market Institutions
• Many of the Market Institutions are highly Human Capital intensive
• Many of the Market Institutions are highly Information intensive
• Government interventions
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Advantages to be derived from these Opportunities !!
• Preparing a launchpad for going global
• Segregating “Global Piece”/ “Local Piece”
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Accessing International Specialized Intermediaries to Circumvent Local Institutional
Voids
Examples – South African Breweries (S.A.) Cemex (Mexico)
Ispat Steel (South East Aisa)
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Is Going Global Better ?? • Affirmative !!• However, there are world class companies
that do not indulge in global operationsExample – Tata Group (India) Petrobras (Brazil)
• Depends upon the business model adopted by the company
CONCLUSION
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Thank You !!