1. Using the information contained in the case, conduct a five-forces analysis of the U.S. Steel industry. What conclusion can you draw from this?
2. Do you think there are any strategic groups in the U.S. Steel industry? What might they be? How might the nature of competition vary from group to group?
3. Demand for steel is very cyclical. Why do you think this is the case? What might steel makers do to better cope with the cyclical nature of demand?
4. Given the nature of competition in the U.S. steel industry, what must a steel maker focus on in order to be profitable?
The U.S. steel industry has been met with numerous problems for the last few decades. Factors contributing to its demise were falling trade barriers, competition, decreasing demand, excess capacity, and unionization. With bankruptcies and consolidation, restructured enterprises were now faced with productive workforces and new technology. With a decline in the value of the U.S. dollar after 2001, more steel exports were created resulting in competitive pricing and higher profits. With many countries spending for infrastructure rebuilding to stimulate their economies, demand for steel surged and allowed for price increases and profitability for U.S. steelmakers, even in the face of a U.S. recession. However, in the deep recession and global financial crisis, steel remains volatile.