Nucor Corporation is a successful "mini-mill" steel company with a reputation for cost efficiency and streamlined management. CEO, Ken Iverson, operates the firm with a minimum of staff. This helps the company achieving a low cost position. 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 9,800 employees. Iverson 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. The goal of most companies is a sustainable competitive advantage. In order to obtain this advantage, a company must develop long-term strategies. These strategies should cover low switching costs, continuing growth and diversity, exit barriers, and product differences. For a business to remain successful, it must be able to formulate strategies to compete with larger, more profitable organizations in the same industry and it must also formulate strategies in which to adapt to changes in their external environment while maintaining an entrepreneurial spirit.
A company must be able to compete with other corporations in the same industry if it is to stay in business. 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.
