Nucor Steel Corp. case study

Porter five forces analysis, Steelmaking, Globalization

For the purposes of this case analysis of Nucor Corporation, the steel industry is composed of all steel making companies in the United States (US). Although the case study did not give much information on global steel competition, this group would also include foreign-owned steel companies operating in the US. It is important to note, that to narrow this category the analysis could also be limited to address only the fourteen companies tracked by Standard & Poor. It is apparent from the case study that larger steel corporations are the issue of concern. Therefore, this industry includes the giant, fully- integrated steel mills of U.S. Steel and Bethlehem Steel and the smaller mini-mills that produce an increasingly significant niche product. Information on the global steel industry will be included in the recommendations portion of this case study.

The analysis supports the conclusion that the US steel industry reached maturity in the 1990's but new technology allowed the industry to begin an era of new growth. The global steel industry was much younger. As lesser developed nations began to enter the global market, they were better equipped with newer manufacturing facilities. US steel companies were still using technology that was designed in the early 1900's. The technological disadvantage almost forced US steel makers out of business. Steel producers in other countries were using new technology that allowed unit prices to be significantly reduced. There is also evidence of foreign governments subsidizing their steel companies. This allowed foreign companies to sell steel in the US at below production costs.

The industrialized world will always have a need for steel. Steel is used in bridges, skyscrapers, automobiles, eyeglasses, spacecraft and medical instruments, just to name a few products. In the foreseeable future it is very unlikely that steel will be replaced by another material. However, the steel industry depends on operations at near max...
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