Nucor case Term Paper Example | Topics and Well Written Essays - 1000 words

Nucor case - Term Paper Example With improving economies’ growth is expected to boost desire for many to purchase the product in the medium term. Steel producers and mini-mill companies are situated in the midst of a very competitive environment in both domestic and global scale, which adversely affects their profitability. This competition among steelmakers is to capture a significant portion of the steel market in light of the fact that, the global supply of steel far exceeds the demand for steel products (Thompson 207). The first competitive forces impacting steelmakers is the force to drive down the profitability of steel industry, steelmakers are primarily affected by the abundant steel supply versus demand, which depresses the market price of steel as a commodity. Competition among steelmakers is to lower product prices in order to capture a significant portion of potential customers. Secondly steel producers are adversely impacted by the entry of foreign players into the domestic steel market that are able to advantage of lower labor costs in the country. The influx of cheap imports from foreign steelmakers stiffens the existing price competition among rival steel producers hence lowering prices of steel imports; dragging down steel market prices. Lastly, steel producers are more vulnerable to the increasing cost of raw materials. This rising cost of materials has led to increase in the cost of production making it difficult for them to be price competitive. The difficult in product differentiation in the steel commodity market makes it necessary for min-mills to be able to compete with their rivals based on price, that is; pricing and market niche (Hitt, Ireland & Hoskisson 33). The driving forces in the steel industry; the technology evolution which is a change in the steel making technology has revolutionized the world’s steel industry. The use of COREX technology in the production of steel has increased profit and its environmental