Nucor Corporation is a successful "mini-mill" steel company with a reputation for cost efficiency and streamlined management. CEO, Dan DiMicco operates the firm with a minimum of staff. He uses the philosophy of putting daily decision making into the hands of his operating people. While many larger steel companies have typically eight or nine management levels, Nucor only operates with half as many with about 7,000 employees. DiMicco feels that by eliminating any differences between management and the rest of his employees, the employees will feel that they are a real part of the company, which will add to the overall success of the company. .
Cost and quality are key factors and are major opportunities for a business to gain a competitive advantage. An emphasis must be put on operating efficiency and product quality. Porter's model of competitive strategy identifies three major generic strategies, which include differentiation, cost leadership, and focus. Organizations pursuing a deferential strategy seek to gain competitive advantage through a uniqueness of goods and services from other competitors. Because Nucor uses scrap steel that contains a variety of alloys and impurities in the production of their steel, Nucor pays careful attention to maintaining quality of the steel it produces. Nucor was the first company to use "mini-mills" to focus on their manufacturing of steel. Nucor also began concentrating on the production of sheet-flat-rolled steel used primarily by automotive and appliance manufactures. Nucor was the first to demonstrate that the mini-mills could be used to produce the flat-rolled steel. Nucor was also the first company to apply thin-slab casting, a technology that the Big Steel companies had written off as impractical. .
The purpose of the cost leadership strategy is to continuously improve the efficiency of the production and distribution of a product. Offering lower costs and maintaining a competitive advantage can achieve a higher profit.