Erum Syed Mirza Ehtesham Napacha Suttitum Santid Panichapong Safety First. No one gets hurt on our shift today. Presented by: Erum Syed Mirza Ehtesham Napacha Suttitum Santid Panichapong

Overview External Analysis Internal Analysis Safety First. No one gets hurt on our shift today. External Analysis General Environment Analysis Driving Forces Porter’s Five Forces Key Success Factors Internal Analysis Organization Analysis Financial Analysis Strategic Analysis Core Competencies SWOT Analysis Recommendations

External Analysis External Analysis Safety First. No one gets hurt on our shift today. External Analysis General Environment Analysis Driving Forces Porter’s Five Forces Key Success Factors

General Environment Analysis External Analysis Safety First. No one gets hurt on our shift today. General Environment Analysis General Environment TREND Demographic POSITIVE Political Socio-Cultural Technological Economic Global

Driving Forces External Analysis Technology Economic Climate Safety First. No one gets hurt on our shift today. Driving Forces Technology Cost reduction Innovative processes Economic Climate low interest rates Increasing Steel demand

Five Forces Competitive Analysis External Analysis Safety First. No one gets hurt on our shift today. Five Forces Competitive Analysis Threat of New Entrants LOW Power of Suppliers Power of Buyers Rivalry Among Competitors HIGH HIGH HIGH Threat of Substitutes LOW

External Analysis Key Success Factors Safety First. No one gets hurt on our shift today. Key Success Factors Lowering Operation Cost Increase Market Share Innovative Techno logies Environ mental Friendly

Internal Analysis Internal Analysis Organizational Analysis Safety First. No one gets hurt on our shift today. Internal Analysis Organizational Analysis Financial Analysis Strategic Analysis Core Competencies

Organizational Analysis Internal Analysis Safety First. No one gets hurt on our shift today. Organizational Analysis Daniel R. DiMicco since Sep 2000 Organization NUCOR Mission / Goal “Take Care of Our Customers.” Leadership CEO: Daniel R. DiMicco (55) Organization Culture Zero lay off / Innovative Structure Decentralized

Products Internal Analysis Safety First. No one gets hurt on our shift today. Products

Financial Analysis Internal Analysis P / E Ratio Revenue Growth Safety First. No one gets hurt on our shift today. Financial Analysis P / E Ratio Revenue Growth Net Margin

Financial Analysis Internal Analysis ROE ROA Safety First. No one gets hurt on our shift today. Financial Analysis ROE ROA

NYSE Internal Analysis Safety First. No one gets hurt on our shift today. NYSE EPS Dividend Yield Price : 58.64 (12/1/06)  52 Wk High 61.70 52 Wk Low 32.18 NUE

Core Competencies and Sustainable Advantages Internal Analysis Safety First. No one gets hurt on our shift today. Core Competencies and Sustainable Advantages Valuable Capabilities ? Yes Costly-to-imitate ? Rare Capabilities ? Non-substitutable ? Result: Nucor has sustainable competitive advantage and its performance implications rated in above average returns

Strategic Analysis Internal Analysis Corporate Level Business-Level Safety First. No one gets hurt on our shift today. Strategic Analysis Corporate Level Optimize existing operations Use Greenfield technology Acquisitions Go Global Business-Level Low-end products Highest quality mini milled steel Offer low and competitive prices Lean management style

SWOT Analysis SWOT Analysis Safety First. No one gets hurt on our shift today. SWOT Analysis

SWOT Analysis SWOT Analysis Strengths Financial Strength Safety First. No one gets hurt on our shift today. SWOT Analysis Strengths Financial Strength Technology innovator Decentralized business units, high employee empowerment Opportunities Acquisition strategies Leverage, extend technology advantage High Demand Weaknesses High cost of Mini mill operation Exposure to economic, business cycles of customers Lack of international presence Threats High price of raw material Increasing consolidation /Oversea competitors Changes in the cost of electricity and natural gas

CURRENT PRODUCTS/SERVICES NEW PRODUCTS/SERVICES SWOT Analysis Safety First. No one gets hurt on our shift today. Alternatives CURRENT PRODUCTS/SERVICES NEW PRODUCTS/SERVICES CURRENT MARKET MARKET PENETRATION New processes to reduce energy costs Acquire existing steel firms in US Low-cost productivity PRODUCT DEVELOPMENT Technology initiatives in Hismelt, Strip casting Modification in steel making process NEW MARKET MARKET DEVELOPMENT Acquisition in India investment in China Joint venture with foreign companies Acquisition of a current supplier DIVERSIFICATION R & D initiatives

Recommendations Recommendations Reduce energy cost by Wind Turbine Safety First. No one gets hurt on our shift today. Recommendations Internal Strategy Recommendation Reduce energy cost by Wind Turbine External Strategy Recommendation Acquisition in India

Recommendation 1 Recommendations Reduce energy cost by Wind Turbine Safety First. No one gets hurt on our shift today. Recommendation 1 Internal Strategy Recommendation Reduce energy cost by Wind Turbine

Internal Strategy Recommendation Safety First. No one gets hurt on our shift today. Objectives Implementation of wind turbines at five of its existing plants Locations: Auburn, Chemung, Denton, Norfolk, Seattle 12 month project $2.5 million per turbine Total budget of $13.5 million

Internal Strategy Recommendation Safety First. No one gets hurt on our shift today. Locations Auburn, NY Chemung, NY Denton, TX Norfolk, NE Seattle, WA

Justification Internal Strategy Recommendation Reduce energy costs Safety First. No one gets hurt on our shift today. Justification Regular Electricity Consumption Average cost of electricity per Kilowatt (cents) 9.015 Average production of steel at five plants (tons) 2,000,000 Average electricity consumed by five plants (KW) 1,133,000,000 Total Electricity Cost $1,018,751,831 Electricity Consumption with Wind Turbines Electricity Production with five wind turbines (KW) 23,470,000 Cost of purchasing 23,470,000 KW from Electric company $ 2,115,821 Reduce energy costs Reduce production costs Environmentally friendly Payback period of 6.2 years $4.48 million NPV

Internal Strategy Recommendation Safety First. No one gets hurt on our shift today. Deliverables Five wind turbines will be purchased from G.E Co. Five plants with one 1.5 Megawatt/hr. wind turbine each The total capacity will be 13,140 Megawatts

Implementation and Milestones Internal Strategy Recommendation Safety First. No one gets hurt on our shift today. Implementation and Milestones Initiate immediately for all five locations 12 month of installation and conversion Wind turbines will generate portion of mini mills electrical demand

Internal Strategy Recommendation Safety First. No one gets hurt on our shift today. Risk Analysis Purchasing/Installation costs may rise Actual savings less than expected savings

Internal Strategy Recommendation Safety First. No one gets hurt on our shift today. Long Term Effects Financial Implications (12 month project) Saving of $2 million in electrical expense per year Recovery of initial investments in 6.2 years Promote “going green” image Base for future expansion of this project

Recommendations 2 Recommendations External Strategy Recommendation Safety First. No one gets hurt on our shift today. Recommendations 2 External Strategy Recommendation Acquisition in India

External Strategy Recommendation Safety First. No one gets hurt on our shift today. Objective Acquisition in India Global presence of Nucor outside of the United States Acquire small companies in India such as MSP Steel and Power Ltd. 12 Month Period Budget of $20 million Lower production costs

External Strategy Recommendation Safety First. No one gets hurt on our shift today. Justification Steel consumption is on the rise globally Explore international markets Shift production to low-cost countries INCOME MSPL : National Stock Exchange of India

External Strategy Recommendation Safety First. No one gets hurt on our shift today. Deliverables Acquisition of MSP Steel in India within 12 month period Nucor will invest $15.33 Million Incorporate new and advanced technologies

Implementation and Milestones External Strategy Recommendation Safety First. No one gets hurt on our shift today. Implementation and Milestones Acquisition in India should be initiated immediately Follow the acquisition steps Implement modifications to the existing steel company

External Strategy Recommendation Safety First. No one gets hurt on our shift today. Risk Analysis Not enough return back on investments Sudden decrease in the demand for steel Uncertainty of raw material supply

External Strategy Recommendation Safety First. No one gets hurt on our shift today. Long Term Effects Gain competitiveness Cut production costs Strong domestic growth in India

Conclusion Conclusion Driving Forces Key Success Factors SWOT Safety First. No one gets hurt on our shift today. Conclusion Driving Forces Key Success Factors SWOT Action Plans Success

Thank You For Your Time & Attention External Strategy Recommendation Safety First. No one gets hurt on our shift today. Thank You For Your Time & Attention