Barriers to entry by Potential Competitor.
Considerable competition exists from numerous domestic manufacturers and foreign imports. The markets that Nucor serves are tied to capital and durable goods spending and are affected by changes in economic conditions. .
Global demand for steel expanded continuously throughout the 1960s, a demand domestic producers elected to not meet, choosing only to match domestic consumption requirements. This presented an opportunity for up-start foreign producers to rejuvenate and strengthen themselves without directly competing against U.S. producers. .
Antidumping Rulings: U.S. integrated steel producers filed charges of dumping against foreign competitors -- primarily the Germans and Japanese. .
Bargaining Power of Suppliers.
The bargaining power of suppliers within such industry is low. The supply factors of production (transformation factors) are labor to operate plants, capital facilities, and land. Recent modernization has significantly substituted technology for labor in steel production. Yet, Not all stakeholders have been happy with the way Nucor does business. There were also concerns about the excess incentives the stat gave to convince Nucor to build steel mill and it also argues that their new federal law should go for extra care with the restoration of spawning and nursery habits and improve water system due to the fast track of facility being built in Hertford by Nucor.
Bargaining Power of Customers.
The bargaining power of customers is medium to high because of a reduced demand by the auto industry as of the result of the lower steel content in a modern automobile; a trend steel producers are aggressively trying to counter by banding together to form the Steel Alliance which is running a $100 million advertising campaign targeted at consumers touting the advantages of steel for automobile design (and house construction).
Service centers are also playing an increased role in the industry, acting as major distributors and wholesalers for finished steel products to steel consumers (construction firms, shipbuilders, machine fabricators, etc.
