Competition includes all the actual and potential rival offerings and substitutes a buyer might consider. An auto mobile manufacturer can buy steel from U.S. Steel in the United States, from a foreign
firm in Japan or Korea, or from a mini mill such as Nucor at a cost savings, or it can buy aluminium
for certain parts from Alcoa to reduce the car’s weight, or engineered plastics from Saudi Basic
Industries Corporation (SABIC) instead of steel. Clearly, U.S. Steel would be thinking too narrowly
about its competition if it thought only of other integrated steel companies. In the long run, U.S.
Steel is more likely to be hurt by substitute products than by other steel companies.
firm in Japan or Korea, or from a mini mill such as Nucor at a cost savings, or it can buy aluminium
for certain parts from Alcoa to reduce the car’s weight, or engineered plastics from Saudi Basic
Industries Corporation (SABIC) instead of steel. Clearly, U.S. Steel would be thinking too narrowly
about its competition if it thought only of other integrated steel companies. In the long run, U.S.
Steel is more likely to be hurt by substitute products than by other steel companies.
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