Materials Technology Corporation Case Analysis

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I. Industry Context Industry Overview Industry Summary and Outlook Ceramics Engineering-- the industry that Materials Technology Corporation, or "MTC" is a part of-- is a multi-billion dollar a year industry. Because ceramics can be manufactured to have unique combinations of strength, weight, thermal and magnetic conductivity, and deformability, they have countless uses in industries such as aerospace, biomedical, automotive, and electrical. With an unlimited number of such combinations, it is possible to create a material that exactly suits a given situation. Because of the following combination of factors, there is generally "high demand and low supply" for engineered ceramics: • low cost (once developed) and high…show more content…
MTC's several process innovations therefore further establish the company as a leader in the field. Company Overview Evolution of the Company and its Strategy Materials Technology Corporation was founded in 1984 by a venture capital-backed group of MIT scientists for the purpose of making advancements in ceramics processing technology. At inception, MTC had no actual products and process technology, but quickly made several innovations in the field of ceramics technology, for example: tape casting (flat, smooth sheets of ceramics for use in microelectronics), "Quickset" molding technology (a revolutionary development in 3-dimensional molding), and multi-layered ceramics molding. MTC initially needed to obtain substantial investment capital due to two main factors: a research-heavy industry, and the need to create most of the markets for its products. Although the founders' goal was to become a major manufacturing company, they did estimate that the company would need $50 million in capital before it would become self-sufficient. Their initial financing model was to first recruit a superior technical team, use that to attract additional equity investment and development funding from interested corporations, and then develop manufacturing capabilities. Commercial sales began 2.5 years after inception, and MTC is nearing the break-even point in 1990.
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