Case Interview Question #00477: TAMCO Steel, Inc. is a rebar steel manufacturer based in Rancho Cucamonga, California, United States. A rebar (short for reinforcing bar), also known as reinforcing steel or reinforcement steel, is a common steel bar, and is commonly used as a tensioning device in reinforced concrete and reinforced masonry structures holding the concrete in compression. The company’s products are used in the construction of buildings, freeways, bridges, parking garages, and concrete structures. It serves markets primarily in California, Arizona, and Nevada. As of October 2010, TAMCO Steel becomes a wholly-owned subsidiary of Gerdau Ameristeel US, Inc.
TAMCO Steel has one steel mini-mill in California. The plant is fairly old and is only marginally profitable. A competitor of TAMCO Steel recently built a new steel plant 300 miles away. What is the competitive threat? How should the client respond?
Note to Interviewer:
This is a strategy case with some light math. As the interviewer, you should have the candidate do a few calculations to help drive to the answer. Also, at the end, let the candidate brainstorm a few strategic options that the client firm could explore. An important question they should consider is why the client’s California steel plant exists at all.
A logical approach (3C’s framework: Company, Competitor, Customers) to this competitive response case is to look at the client company’s cost structure, the competitor itself, and the customers/market place. Additional information that can be provided to candidate is shown below.
Additional Information: (to be given to candidate if asked)