External Analysis Tools Pest, Porter 's Five Forces And Major Strategic Groups

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1. The industry which Nucor operates can be described using the external analysis tools PEST, Porter’s Five Forces and Major Strategic Groups.
Environmental Analysis - PEST
State Tax Breaks: In the U.S., when a manufacturing firm is looking for a new location to set up operations, there is a large incentive for local governments to offer large tax credits towards the organization in order to entice them to locate within their region. This is because the jobs that a manufacturing plant brings greatly improve the prosperity of the region. An example of the tax breaks available is when Nucor opened a steel mill in North Carolina costing $300 Million, Hertford County offered Nucor $155 Million in tax breaks to bring 300 jobs to the region.
Anti-Dumping Tariffs: During the early 2000’s, U.S. Steel prices were plummeting to 20-year lows and all but the two largest manufacturers were posting losses. In 2001, Bush posted anti-dumping tariffs in order to protect the US steel industry from bankruptcy. While this upset the World Trade Organization, steel prices began to recover in 2002 and 2003 until Bush withdrew the tariff. In addition, China imposed their own three-year tariff on Imports which improve steel prices as well.
Rising Energy and Ore Prices: Energy and ore prices have continued to increase, threatening integrated mill producers. In addition, U.S. steel scrap prices have been increasing, affecting mini-mill producers the same. With these

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