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Hrm Issues/Diversification Strategies

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HRM Issues/Diversification Strategies

Global demand for steel expanded continuously throughout the 1960s, a demand domestic producers elected to not meet, choosing only to match domestic consumption requirements. This presented an opportunity for up-start foreign producers to strengthen themselves without directly competing against producers in the United States. Throughout this expansion, the relationship between management and labor soured. The Nucor Corporation broke into the industry with a workforce that consisted of farmers, mechanics, and other motivated workers. The company experienced various pains, eventually won community trust and respect within the industry.
Trends in Steel Industry and how it may Impact Nucor’s Strategy

“Due to growing demand for scrap metal, its cost has become increasingly volatile in the

1990s. In 1994, for example, prices climbed as much as $50/ton to $165-170/ton while 10 million tons of American scrap were exported to offshore customers. In 1996 prices reached $200/ton, and were expected to climb, but instead declined to $170-180/ton by the end of 1997” (Boyd & Grove, p. 6, 2000). Like many industries, the slumping global economy has significantly impacted demand in the steel industry as well. As the automotive and construction industries recover, the steel industry should begin to see a gradual upswing in demand. However, the steel industry will encounter difficulty trying to maintain growth revenues greater than 15% until other industries recognize major recoveries. Nucor faces challenges of low demand, foreign competitors, strained labor relations, and union issues. Any attempt to place trade barriers on steel imports could have global repercussions. Nucor may be compelled to reduce costs, increase controls over its manufacturing strategy, and compete on the basis of price. The increasing competitive pressures on

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