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Nucor Case Summary 1. The Steel Industry Similar to our discussion of e-commerce markets - albeit in a very different industry - we begin with a discussion of the challenges to capturing value in the steel industry. The fundamental difficulty here is intense rivalry. Above all, this arises from the fact that steel is basically a commodity, with very limited opportunities for product differentiation. While there are different segments of the steel market, within each segment products are nearly identical. This is especially true within the low-end, primarily construction market that Nucor serves. In such a commodity market, the only variable that firms have to attract customers is price, generating the lose-lose price competition which is the defining characteristic of intense rivalry. This price competition is intensified by several other features of the steel industry. First, demand is flat, or even shrinking, implying that firms must fight with each other to capture market...

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