Nucor Case Study

522 Words3 Pages
The possible competitive forces that could have a tremendous impact on the steel industry are the threat of new entrants, bargaining power of suppliers, bargaining power of buyers, level of rivalry and the threat of substitutes Competitive pressure created by the Rivalry among Steel Producers Competition within the steel industry, both domestic and worldwide is intense and is expected to remain so in the future. Producing steel of satisfactory quality is something most producers have mastered. In a commodity market like steel where it is hard to tell the steel products of one steel-maker from those of another, buyers shop heavily for the lowest price. However, given the recent strong demand for steel in the U.S. and other market, meeting customers’ delivery schedule requirements is also a competitively relevant consideration for buyers when it comes to selecting whose steel to purchase. Competitive pressures from the sellers of substitute products There are many substitutes product such as Aluminum, plastics and other material can be used in place of steel. Although usage of aluminum and plastics has been rising continuously in the automobile and consumer durables sectors, it still does not pose any significant threat to steel as the latter cannot be replaced completely and the cost differential is also very high. Competitive pressure associated with the Threat of new entrants It is unlikely that new firm will enter in the industry. It is very difficult for new firm to operate and seek out customers in the geographic markets where they do not currently have a firm. Moreover, it is clear that “new entry” is occurring when companies like Nucor and Mittal Steel acquire less successful steel producers and try to turn the operations of the newly-acquired companies into strong contenders in the marketplace. Nucor’s recent acquisitions, for
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