Approximately three-quarters (75.7 percent) of the output of the integrated group is produced by four firms·USX-US Steel Group (26.2 percent), Bethlehem Steel (20.1 percent), Inland Steel (18.2 percent), and Stelco (11.2 percent). The integrated steelmaker group, thus, is structured as an oligopoly (Katz, 1994b, p. 1405). Six firms in the general steelmaker group account for 72 percent of the total output of the group·Nucor (21.5 percent), Commercial Metals (15 percent), Allegheny Ludlum (10.3 percent), Worthington Industries (10.3 percent), Lukens (8.4 percent), and Oregon Steel (6.5 percent). Thus, the general steelmaker group is also structured as an oligopoly.
Within the integrated group of steelmakers, the use of steel service centers to enhance distribution efficiency is used effectively to differentiate their products within the context of service. The general steelmakers depend more on product mix to differentiate themselves from competitors (Katz, 1994a, p. 604).
With respect to the American steel industry, both the integrated and general groups, formidable cost barriers to entry exist with respect to economies of scale production facilities and specialized equipment. Product differentiation costs are not significant as barriers to entry into the American steel market. Environmental protection regulations imposed by government create costs for steelmakers that act as legal barriers to entry into the American steel in