Businessmodel of Nucor

Customer Segments

Nucor has a niche market business model, with a specialized customer segment. The company targets its offerings at steel service centers, fabricators, manufacturers, and general contractors.

Value Proposition

Nucor offers three primary value propositions: innovation, performance, and brand/status.

The company has embraced innovation from the beginning. It has been groundbreaking as follows:

• The first mini mill for producing flat-rolled steel
• The introduction of thin-slab casting, which accounts for a large portion of flat-rolled steel
• The creation of Castrip, a thin-strip casting technology that converts molten steel directly into solid sheets, reducing energy use and maximizing manpower The company has demonstrated strong performance through tangible results. Its Electric Arc Furnace, which operates at 90-to-150 megawatts, drives the mini mill process. It can transform 130 – 170 tons of scrap and iron into liquid steel in a matter of hours. It can also recycle an average of 1,200 pounds of steel every second of every hour daily.

The company has established a strong brand due to its success. It is the largest mini-mill steelmaker, and the largest producer of steel in the U.S., with a production capacity that exceeds 27 million tons. It is the largest recycler in North America, and recycled 16.9 million tons of scrap steel in 2015 alone.

Channels

Nucor’s main channel is its direct sales team. The company promotes its offering through its website, social media pages, and sponsorship of sports teams such as the Latitude 35 rowing team.

Customer Relationships

Nucor’s customer relationship is primarily of a self-service nature. Customers utilize its products while having limited interaction with employees.

Key Activities

Nucor’s business model entails designing, developing, and manufacturing its products.

Key Partners

Nucor’s key partners are the suppliers that provide the raw materials and equipment it uses to manufacture its products. It also depends on truck transportation vendors and operators of transload facilities.

Key Resources

Nucor’s main resources are its physical resources, which include the following:

• Steel Mills segment - Eight manufacturing facilities in the United States and Canada and one distribution center in Veracruz, Mexico
• Steel Products segment - 80 operating facilities in 37 states and 27 operating facilities in Canada
• Raw Materials segment - 70 operating facilities in 16 states along with multiple brokerage offices in the United States and other locations ### Cost Structure

Nucor has a cost-driven structure, aiming to minimize expenses through significant automation. Its biggest cost driver is cost of products sold, a variable expense. Other major drivers are in the areas of sales/marketing and administration, both fixed expenses.

Revenue Streams

Nucor has one revenue stream:  revenues generated from sales of its products to its customers. The sales typically occur through the formation of fixed-price contracts.