Porter's Five Forces Model

This is true regardless if imports were subsidized in the country of origin. Even though the domestic firms would have to compete, these conditions serve for the betterment of the consumers and outweigh other losses. However, in the short term, as the prices adjust, unemployment is faced, and “market failures” might arise. These negative externalities do not imply that protectionist measures can fix the issue. In long-term, domestic companies may become reluctant, passive, and too reliant of government. In trying to satisfy the domestic market and resist external arbitration, the government may become the victim of its own strategy or success. This policy is appealing and rationalized only if it aims to release the domestic political pressure. In theory, by remedying the competitors from the outside, the US steel industry would have developed the industry while having more “confidence” and the means of acquiring more of the demand side. Proponents of the protectionist actions increase the profits and quantity of steel. Seeing profit, other steel-producing companies would join in domestic competition. This likewise optimizes and expands the steel industry. This kind of protectionism act was quite popular in the EU and the UK in the early industrialization era. This also makes possible to save and expand jobs. In this narrative, it would increase the citizens’ employments rates in steel industry. Moreover, it has significantly helped the US steel industry raise profits, in light of soaring demand worldwide from China and other manufacturing

Slade’s competitive market is metal product market. It can be analyzed with the Porter’s Five Forces Model: risk of entry by potential competitors, rivalry among established companies, the bargaining power of buyers, bargaining power of suppliers, and threat of

These driving forces very easily impact the steel industry’s competitive structure in a bad way. These driving forces make it very difficult for steel companies to compete in this industry.

3. Please apply Porter’s Five Forces model to the steel industry. While doing so, clearly identify who is behind each force – for instance Suppliers, Buyers, Substitutes, Competitors, etc. And what is the impact of each force on the profitability of the industry – in terms of the following levels - High/Medium/Low. At the end, also provide a summary of all the five forces and propose whether you think the steel industry is attractive industry or not an attractive industry.

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 to support your answer.

The intensity of rivalry, which is the most obvious of the five forces in an industry, helps determine the extent to which the value created by an industry will be dissipated through head-to-head competition. The most valuable contribution of Porter's “five forces” framework in this issue may be its suggestion that rivalry, while important, is only one of several forces that determine industry attractiveness.

The competition of mining industry is medium to high. One major competition for mining industry is the competition for resources and mines, which is different from other industries. Since the resources are limited and unrenewable, together with the continues increasing demand for energy, such as coal demand of China and India, the battle of exploiting and developing new mines are intensive. Also, there are many competitors in the industry. However, since the exit barriers are high, the competition is limited within the existing companies. Companies in the industry might battle for larger market share but facing little threat of new entries. Thus, the competition in the industry is concluded as medium to high.

This report discusses the challenges that The Nucor Corporation faces during this era of social and economic climate change. Using Porter's Five Forces Analysis and Four Generic Strategies, we will assess the steel industry standards as it relates to the strategies implemented by the Nucor Corporation. We will also assess what Nucor’s strengths and weaknesses are, and if they will be able to continue

Even in spite of the economic recession in 1991, Nucor still appeared to be one of the fastest growing steel companies in America, even considering the spending levels regarding disposable income among Americans. This is especially true since September 11, attacks, because economic levels in America have tended to exhibit a slight disability. After the attacks on 9-11 markets, as well as the overall financial climate of the United States took on immediate hits. Yet, after President Bush’s tax cuts made in 2002, the country rebounded from a mild recession which dated back to the Clinton administration and has since sought to recover. The steel industry worldwide was mired in one of its most unprofitable periods ever when 9-11 hit. The recovery from the recession, as well as an attempt to pull through current financial hard times due to the war in Iraq have added extra strains on Americans and their ability to spend, which in turn affects the steel industry.

U.S. Steel and other steel companies for decades, relied on the tried and true strategies of vertical integration and price control (Hoerr, 1988). In the 1960’s, foreign competition from developing countries like South Korea, Taiwan and Brazil entered the market "with low material and labor costs, modern equipment, and the support of government policies" (Hoerr, 1988, p. 99). Because of lower costs and concern over supply created by constant threat of strike, many

Over the years Nucor emerged as a market leader in the American steel producing industry due to its sustainable growth strategies and incorporation of sophisticated technologies that enables the company to grow exponential and become a market leader by offering high quality steel products at lower costs. The company backed its growth strategies by massive integration in the American market. However, this growth strategy proved to be predominant in capturing the American market thus ignoring the potential competitive threats that could come from foreign steel producers. This included both steel producers integrating with American minimills and foreign producers who used America as a lucrative export market and dumped their products.

So, from my perspective, these are the main trends in the strategic environment that have influenced steel company profits over the past few years. Nevertheless, the fact that most steel companies operate largely within their national or regional markets, adapting their strategies only to them, was, obviously, the primary aspect that contributed for the worsening of the situation.

According to Michael Porter, “Every industry has an underlying structure, or a set of fundamental economic and technical characteristics, that give rise to these competitive forces” (Porter 1998:23). The forces mentioned above are: industry rivalry, threat of new entrants, threat of substitute products, bargaining power of suppliers and bargaining power of buyers. Additionally, Porter mentioned that: “Knowledge of these underlying sources of competitive pressure provides the groundwork for a strategic agenda or action” (Porter 1998:22).

In recent years, the US has increased tariffs on the steel industry in order to restrict

TATA steel strategy was to integrate the value chain of steelmaking to aid the growth of Asia’s bubbling construction economy. When presented with the opportunity (financially the government policies made it easier) to gain access to the other markets, they later acquire CORUS which was an established name in Europe, but were not cost effective in their operations (Tarun Khanna, Krishna G. Palepu and Richard J. Bullock, 2009). This acquisition provided them the right synergy by combing the low cost upstream production in India with the high-tech research aspects of Corus and areas like procurement, marketing, back office operations and R&D. This was also required due to the trends in world steel industry whereby there has been a global