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Nucor Case Study

This approach is what led to the popularity of international steel at a time when American steel companies were hit with union strikes. These companies need steel in order to keep their own production lines moving and they are willing to find the "best" supplier to accomplish that.

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


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