The US Steel Industry - Risk of Entry - Case Study Example

The second force is raising rivalry in the established firms.  Rivalry amongst the firms that are already established is growing as the rate of competition goes high with the example of Mini-mills taking over and setting a price war in the industry.  There is also an increase of foreign companies taking the market shares.

The third force is the bargaining power that suppliers have. The suppliers are decreasing due to bankruptcy thus; the number of suppliers is low.  Few suppliers make the services that the industry offers to be the same and not unique in any way (Steel Industry Profile, 2013).

The fourth force is the buyer’s bargaining power and the number of customers is high. When the number of customers is high then the supply price becomes sensitive. The costs that customers have to go through to switch to a differential product are relatively low.

The fifth force is a threat to the substitutes where the prices of switching to substitutes are high and thus the companies must adjust their prices so that they are able to compete with plastics, composites, and aluminium which are substitutes.