Dominant
economic characteristics of the industry
The industry can
be defined as cyclical and mature in which supply exceeded demand and the
result was consolidation into a smaller number of larger and more efficient
steel manufacturers. However for Nucor Corporation, the larger competitive
threat arose from Mittal Steel USA and other foreign competitors who had
reduced costs of production to a level below that at Nucor Corporation. One of
the important economic characteristics of the industry was that demand enjoyed
by foreign competitors varied with exchange rate fluctuations. Therefore the
level of imports into the US
increased when the local currencies were stronger. Foreign competitors also
enjoyed an advantage over US competitors in terms of government subsidies. This
allowed the foreign manufacturers to reduce their costs of production to a
considerable extent. Because demand exceeded supply, the critical success
factor was cost minimization. In order to meet this objective, the managements
of the companies utilized technological innovations.
The economics
considerations in the industry also varied with the production technology in
application. There were two production technologies being used. The traditional
one was the oxygen blast furnace …               Â
