In the steel production industry, globalization is the driving force that affects competition. Since the modern day steel Industry is off global scope, Including the United States, Europe, Canada, Mexico, Japan, Brazil, China, and many other foreign countries, Incur has made moves to counteract the impacts of globalization. In the mid-sass’s, the steel industry was plagued by overcapacity of foreign material due to the “dumping” of foreign steel Into the united States at cut- rate prices.
As many domestic steel firms did not have the resources to compete with these foreign giants, Incur was in the best position to defend against foreign competition with their low-cost German technology, and in 1955 they started their iris international venture with a Brazilian steel production company, and built their first International steel mill In the state of Care. Incur was also threatened by the leader in foreign imports to the united States, so they bought a Japanese-owned mill in New York.
Today, Incur Corporation is continuously attempting to meet the challenges of a globalizes market by expanding through acquisition in hopes that this will strengthen their market position and become a more globally competitive organization. Steel is the modern technology of the building, automotive, and several other industries. Advances in steel production technologies can drastically change the Industry make-up, helping mills to produce material at lower costs.
Incur Corporation has been and continues to be a pioneer of new production technologies that helps them to produce material competitive in quality and cost to that of foreign producers. Traditionally, steel mills were/are using energy-intensive blast furnaces to make material. In 1969, through the use of advanced technologies, Incur was able to produce the first mall-mall which relies primarily on scrap metals Instead of Iron- ore and coke.
With the introduction of electric arc furnaces instead of the traditional blast furnaces, Incur has been able to increase market share through the more efficient, lower-cost production that has helped them to triple their output since the 1 ass’s. Apply the Industrial organization model and the resource-based model to determine how your corporation could earn above-average returns. The External Environment I General Environment I I Industry Environment I I Competitor Environment I Global slow economic growth. I I * Oversupply of foreign lower-cost material, leading to a fall in domestic market price.
I I Exporters of steel In foreign markets are competing to sell over-supply in the united States. I * Constant FIFO Introduction of government regulations causing new taxes on fuel and laws regarding environmental responsibilities in the production of steel. I * Customers buying through service centers instead of direct from the mills. * Slow demand I * Unstable pricing causing price leaders to raise and lower prices to gain competitive advantage. I I * Constantly fluctuating scrap prices leading to unstable industry prices.
I I I * Slow demand forcing high competition and price under-cutting among domestic producers. I I An Attractive Industry I The Steel Service Center Industry I Strategy Formulation I Expansion through growth and acquisition into UN-penetrated markets both domestically and abroad. I Assets and Skills I Bring in managers that are knowledgeable of market conditions both domestically and abroad I Capital to invest in the production of new facilities I Strategy Implementation I Investment and formulation off R&D department I Restructuring of current operations to raise capital to penetrate foreign markets.
I Superior Returns I Resources I 1. Incur is known as a price leader in the steel production industry. I I Incur is constantly adding new product offerings and advancements in technology to lower the costs of production. | 3. $1. 1 billion in capital expenditures budgeted for 2013 (www. Incur. Com). I I | 4. Managers that are knowledgeable about the current trends in the global market which helps them maintain the ability to overcome the negative effects of slow economic growth. | 5. Incur has strong relationships with its suppliers and buyers. I I | 6.
Incur has its own fleet of 150 trucks to ensure on-time delivery and reduce transportation costs. I Capability I 1. Incur follows a low cost provider strategy, as it aims to provide a product that meets industry standards at the lowest available price in the industry. | 2. Incur maintains an expertise in the implementation of technology that will help them lower production costs while increasing profit margins. | 3. Incur steel production mills are located strategically near customers all over the United States to cut down on transportation costs. | 4.
Incur has limited long-term debt that places them in a position to grow through acquisitions. I Competitive Advantage I While the rest of the steel production industry focuses on the import material that is loading the market and causing domestic pricing to slip rapidly, Incur is in a strong financial situation to gain an advantage over their competitors by spending their available capital on growth and technology. I An Attractive Industry I and Implementation I Incur can use their resources and capabilities to exploit them through a foreign import trade firm.
Being known as a price leader in the steel production industry, Incur can take advantage of the acquisition of a trade firm to bring foreign material into the United States without setting prices so low that they disrupt domestic pricing. This will allow them to buy steel from foreign producers at a low price and sell it to domestic consumers at a price high enough that it will not cause a decrease in domestic material, eventually increasing profit margins for Incur Corporation.
Assess how the vision statement and mission statement of the corporation influence its overall success. Incur Corporation is focused on their customers: their employees, shareholders, and the people that buy and use their products. Nuncio’s vision is to be the safest, highest quality, lowest cost, most productive, and most profitable steel and steel products company in the world. This vision is the foundation of their mission: “Take care of our customers” (www. Incur. Com).
Incur has established an internal “fit” with their employees and managers which include those that strive to improve efficiency while establishing strong relationships among employees, based on the Incur values such as honesty, autonomy, trust, communication, and self-motivation. This type of value-added employment undeniably leads to short-term growth and long-term success. Those that do not uphold this “fit” will eventually leave on their own terms. This shows Nuncio’s strength n management values, and provides a competitive advantage.
Incur Corporation also takes care of the people that buy their steel by constantly rising to the challenges of advancing technology to be able to produce quality material at a low cost. This type of value-added service paves the way for customer loyalty, eventually leading to long-term success in the industry. Evaluate how each category of stakeholder impacts the overall success of this company. Stakeholders are the individuals, groups, and organizations who can affect the firm’s vision and mission, and whom are affected by the strategic outcomes achieved, ND have enforceable claims on the firm’s performance (Smith, Ireland, Hosking’s, 2013).
These stakeholders are classified into three different groups: Capital Market, Product Market, and Organizational. Capital Market Stakeholders are comprised of the shareholders and the lenders. Shareholders can use tactics to pressure management into making certain decision for the corporation, and if they become dissatisfied they can sell their stock in the company. In the case of Incur, the major lenders approved the risks of developing and implementing the electric-arc furnace genealogy through financing.
In turn, being able to produce lower cost material has helped Incur Corporation to have higher profit margin, thus producing a higher dividend for investors. Product Market Stakeholders include the customers, suppliers, host communities, and unions. Incur has the ability to produce low-cost, high-quality steel that keeps customers loyal to their brand, even if the price rises. Being able to sell lower cost products at a higher price helps Incur to maintain supplier loyalty as well because they are able to pay their scrap suppliers a higher price.
