MGMT 499 NUCOR CASE ANALYSIS
Nuredin Abdulahi
Course: MGMT 499
Assignment: Nucor Case
November 15, 2014
Nucor Corporation Case Analysis
1. What are the primary competitive forces impacting U.S. steel producers in general and the producers like Nucor that make new steel products via recycling scrap steel in particular? Please do a five-forces analysis
Rivalry among Steel Producers
There is a fierce competitive force in this industry. Rivalry revolves heavily around price competition because most steel products are commodities. Producing steel of satisfactory quality is most producers are familiar with. In a commodity market like steel, it is hard to distinguish products of one steel producer from another. I this type of market condition, buyers make a choice among lowest/best price sellers. Moreover, competitively, meeting customers’ delivery schedule requirements is also a relevant consideration for the buyers. This particularly holds true when rival sellers are charging fierce competitive prices. Nucor is figuring out how to use low-cost scrap steel recycling technology to make a wider and wider range of steel products. Nucor is using its newly developed technological capabilities to enter a fierce battle for market share in the new product categories.
Competition from Substitutes
A moderately strong competitive force: there are substitute products that compete with steel. For instance, aluminum, plastics and other materials can be used in place of steel in some products.
The Threat of Entry
A moderately strong competitive force: it is less likely that new start-up firms will enter the steel industry. According to this case, existing steel producers are anxious to operate their plant at their full capacity. It is more likely to seek out customers in geographic markets where they do not currently have a presence. Moreover, it is clear that new entry may occur when companies like Nucor and Mittal Steel acquire less successful steel producers and try to turn the operations of the newly
Course: MGMT 499
Assignment: Nucor Case
November 15, 2014
Nucor Corporation Case Analysis
1. What are the primary competitive forces impacting U.S. steel producers in general and the producers like Nucor that make new steel products via recycling scrap steel in particular? Please do a five-forces analysis
Rivalry among Steel Producers
There is a fierce competitive force in this industry. Rivalry revolves heavily around price competition because most steel products are commodities. Producing steel of satisfactory quality is most producers are familiar with. In a commodity market like steel, it is hard to distinguish products of one steel producer from another. I this type of market condition, buyers make a choice among lowest/best price sellers. Moreover, competitively, meeting customers’ delivery schedule requirements is also a relevant consideration for the buyers. This particularly holds true when rival sellers are charging fierce competitive prices. Nucor is figuring out how to use low-cost scrap steel recycling technology to make a wider and wider range of steel products. Nucor is using its newly developed technological capabilities to enter a fierce battle for market share in the new product categories.
Competition from Substitutes
A moderately strong competitive force: there are substitute products that compete with steel. For instance, aluminum, plastics and other materials can be used in place of steel in some products.
The Threat of Entry
A moderately strong competitive force: it is less likely that new start-up firms will enter the steel industry. According to this case, existing steel producers are anxious to operate their plant at their full capacity. It is more likely to seek out customers in geographic markets where they do not currently have a presence. Moreover, it is clear that new entry may occur when companies like Nucor and Mittal Steel acquire less successful steel producers and try to turn the operations of the newly