Substitute products in the steel industry are not readily available in the sense that one cannot typically switch from steel to another metal. However, steel companies have customers who build durable goods, and long-term changes in technology have taken place. Advances in metalworking have produced aluminum that is now being used in automobile chassis, for example. In addition, substitute products also exist in the form of steel that uses a different manufacturing technique; this is how the minimills took business away from integrated steel companies. If the minimills are able to develop a way to make thin steel rolls, they may produce viable substitute products for other products which traditionally come from integrated companies.

There is intense rivalry in the steel industry between the minimills and integrated manufacturers, and among the minimills themselves. During the growth phase of the minimills, these companies took customers away from integrated companies; now, minimills are taking customers away from each other. Capital investments in

2. Nucor has focused on keeping its costs down, its productivity up, and its ability to produce high quality products strong. Although the company was a pioneer in minimills, it embraced that technology because of the productivity gains and opportunity it offered for a niche market, not because the minimill concept fit in a larger strategic plan of the organization. Nucor has a strong incentive program for employees which is self-funding, meaning that employees only receive bonuses when production and costs exceed predetermined levels. At the same time, the company is willing to invest in new capital projects on a case-by-case basis, but its emphasis on short-term returns may preclude its taking on some longer-term projects. Currently, this problem is illustrated by the company's high level of short-term assets.

Nucor also pursues a strategy of narrow product range, focusing on those products which can be efficiently and effectively produced within the minimill configuration and which meet the needs of its own steel product companies, such as Vulcraft. This narrow product range has enabled Nucor to specialize and gain the cost advantages which characterize its operations, but it has also limited the company's long-term prospects. Although Nucor remains committed to the minimill concept, it is engaged in pursuing products which have not traditionally been produced in minimills, but which Nucor believes can be. In this way, the company might expand its product range, but it will still be limited to products which are capable of being produced within minimills (even thoug