Additionally, Kappmeyer should have a more clear direction of the company for the long term in terms of potential growth opportunities before signing the proposal, such that any decisions now are assured to support the long term mission of USX. For example, Kappmeyer knows that this was the last continuous casting investment which would be made at USX for at least a decade.
Kappmeyer needs to be certain that a modification of the current continuous casting proposal may not be better in order to ensure potential growth over the next decade. USX was aware of the need to further reduce costs and increase efficiency in order to remain competitive in the market.
It is better for USX to look ahead and ensure that any decisions today support that vision. Although USX was proactive in researching and engineering the potential for the traditional continuous casting system at Mon Valley, the ability to gain a competitive advantage would still be limited.
It was becoming harder and harder for USX to find growth markets, with the increasingly competitive minimills. Unfortunately for USS, there is no silver bullet.
Pursuing more conservative growth opportunities may be in the best interest of USX. First, USX was challenged with how to continue growth as a competitor in a mature steel market. USX had been perhaps the earliest leader in developing a new thin slab casting, which would become known as CSP.
Nonetheless, the Company was in a mature market and competition was increasing. Not only that, but Kappmeyer is only looking years into the future. The challenges described above by USX including finding low risk growth opportunities in a mature market, responding to market changes and new competition, and meeting the growth expectations of consumers, investors and shareholders are all illustrative of the challenges faced by nearly all companies in mature markets.
There is no doubt that USX must assume sufficient quantity and quality to those customers. For example, would it be possible for Mon Valley to implement the conventional continuous casting system at Mon Valley but create an expansion that could involve use of the CSP technology at low costs and serve customers who demand lesser quality?
Because a cooling step was eliminated, energy consumption could be cut in half. By focusing on the CSP process as an alternative, USX was addressing the growth challenge aggressively, but would be faced with additional challenges as it further explored this opportunity.
What pushed USS to stay with conventional technology? Works and the other the Irvin Mill. Did the USS team get the right answer to the wrong question? If the traditional continuous casting system, as described above, were implemented, the company would certainly reduce costs and increase efficiency over the previous process.
However, based on the information presented in the case, Management i. Companies can take any number of risks.
Even though all analysis of the CSP project, as mentioned several times above, has made it clear that the conventional casting technology was the correct investment for Mon Valley, Kappmeyer should not sign the proposal without further considering other investment options outside of the two described in the case.
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The main reason for that is USS is tying itself to an existing, but dying business model and technology. Although the high dollar amount of capital investment required to participate in the flat-rolled steel market created a barrier for the minimills, many minimills had entered other product segments where the amount of necessary capital investment was much lower.
How does it continue to grow or to gain a competitive advantage when implementing a new state of the art technology is not a cost effective option? USX was a leader in exploring opportunities that could potentially increase its efficiency and capacity as well as decrease operating and capital costs.
Additionally, they were tying themselves to the requirements of the current customers, and ignoring potentially new users for the future.
Kappmeyer has not considered other options to grow the business beyond the conventional continuous casting and CSP technology at Mon Valley.Focuses on the difficulty established companies face when confronted with disruptive technological innovations.
The power that their prior asset investments, their cost structures, and their customers have in constraining their investment and innovation decisions are clearly illustrated. Rewritten version of an earlier case.
This number may be reduced if some of the workers could be relocated to an existing or a new Greenfield plant. Since USS is committed to invest in a continuous casting capacity at Mon Valley, this may be the only way to save $MM investment, unless USS can renegotiate with the union.
of the continuous casting process, contrasts the rate of adoption of this technol- ogy in the U.S. steel industry with that in foreign steel industries, and examines the levels of continuous casting that the United States might reach in A security code is added protection against credit card fraud.
It is a 3 or 4 digit number appearing on the front or back of your credit card. Disruptive Innovation Essay Sample. Continuous Casting Investments at USX Corporation is a case involving a large, established mining and steelmaking company that after almost 80 years of existence is deciding whether to go forward with a $ million dollar investment to upgrade its Mon Valley steel facility.
Continuous Casting Investment. at USX Corp.
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