Nucor at a Crossroads (Canada, US; railroad equipment)

Introduction

At the end of 1986, Nucor, as one of the most important sham in the U.S. steel market, had to make a critical ending on whether to invest in the new thin-slab casting technology, with the fortune of loosing everything. We concluded that the investment is worthwhile, and the following ar the strategies for Nucor upon the commitment to commercialization of the new technology. Finally is the projected financials for the Nucor after making a To-Go decision.

Question

Formulate a strategy for Nucor and provide a rigorous pay for it.

Technology Innovation Strategy

Nucor Corporation was planning to purchase an untried technology, federation Strip Production (CSP), from SMS, an international steel equipment supplier. Based on this technological advance, new scrap-based slab producers would now be able to act upon at a substantially smaller scale. Traditional compound mills normally cast steel slabs to a weightiness of 8-12 inches, while CSP allowed slabs to be cast as small as 2 inches thick.

By adopting this new technology, Nucor could gain the first mover emolument against its competitors. First-mover would be better-off in the competition by initially occupying the market.



This usefulness may stem from the fact that the market lead up chamberpot establish its reputation, earlier than the competitors, among suppliers, distributors and customers who become familiar with and even liege to its products. Also the profit earned during this monopoly stage can be re-invested in improving the resource base [1].

Nevertheless, at that place are two obvious drawbacks for being the first mover: the price and the risk. Not only is it expensive to be a pioneer due to the immature technology, but also it is risky since there are no previous experience to learn from. In Nucors case, despite the high initial investment, the technology can importantly reduce future production cost which contributes...

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