Nucor Corporation Essay Example | Topics and Well Written Essays - 1000 words

Nucor skunk - Essay ExampleTo begin with, there is competition for the inputs that argon required in the production of steel. The patience core input is from recycling of scrap metal. The many impregnables in the industry thus compete for these metals employ in production. There is besides competition for grocery store shargon between the players. Market shargon determines the direct and volume of sales that a firm makes and therefore influence e the profits to a firm (Porter, 1998). The unusual suppliers further tighten competition for market share in the steel industry. Firms in this industry as well are faced by the threat of entry by young firms as this may influence negatively on the slaying of the already existing firms. Michael Porter five forces dumbfound can be applied to explain the competitive forces in this market. According to porter, the five factors that influence the performance of firms are the threat of entry of new firms, threat of substitute products, bargaining force-out of suppliers, bargaining proponent of customers, and the rivalry among firms (Porter, 1998). These five forces will affect operations and determine the policies to be adopted by firms to chink that the competitive edge against competitors is attained. In this market for instance, there is high bargaining power of customers. ... The fight for market share is a zero sum game where if one firm increases its market share thus the others will lose their share. In the US industry, there is threat of entry of very new firms or formation of partnership, alliances, or mergers that will make the competition stiffer. Nucor Corporation has therefore increased its acquisition of new firms and reduced the bureaucracy to ensure flexibility and better performance. The industry is thus highly competitive. The bargaining power of suppliers also exists in the industry because of the many firms in the industry. In this industry, firms have to look for scrap metals that are molt ed and used in producing steel products. The companies must therefore offer good prices for input for them to have go on supply of raw materials and reliable suppliers. The third force is the threat of substitute products. Substitute products have resembling uses and satisfy the same need, therefore becoming important for competition. Industries that are characterized by the existence of closer substitutes are highly competitive and must ensure quality production and good pricing. Continuous restructuring and strategies are also important for the success of the firms. Presence of substitute products in the steel industry, together with the imports from china, turkey and other foreign countries have made competition stiff in this industry (Thompson, 2010). The four forces together with the rivalry among firms are the component of the five forces model. The rivalry among firms is determined by the ease of exit, branding, product identity, product difference and faulting cost. The l ow cost of switching and the ease of exit makes the steel industry in US