Materials Technology Hbs Case Study

Questions for Materials Technology Case Study

1. What industry is MTC in?

At its core, MTC is a technology startup working in advanced ceramics processes. However, the company is struggling to decide whether it’s a generalist ceramics problem solver or a focussed market/industry specialist.

Its initial vision was to become a significant manufacturer of high-performance ceramic products across various industries. Initial products targeted the microelectronics industry. However, MTC learned that one of its key differentiators was its unique process flexibility which could be used in other potentially attractive industries.

There is a strategic shift away from focussing on the high-end microelectronics industry, towards exploring different customer use cases by building on MTC’s engineering talent and flexibility.  

1. After the Bedford disaster, MTC adopted the policy of accepting an offer for a new product prototype only if the NRE is paid for in full. What is the risk in this policy?

Bedford promised to place orders over $1m per year if MTC could solve their problem. This project cost MTC $60k but Bedford ended up not placing any orders. The management reflects that a key lesson is that customers’ willingness to pay for prototypes is very indicative of value of the project to the customer.

I would argue that sometimes high-profile customers will be unwilling to pay for prototypes up front, as they may be approaching several vendors with a tender or RFP. Rejecting a customer simply because they are unwilling to pay upfront seems short sighted as a potentially very lucrative customer could be turned down.

A more flexible strategy would take into account the customer’s market size and potential order size. The Bedford order size of $1m per annum was very small, even if it went through. MTC would be wise to consider self-funding a prototype component for a large customer that is likely to place significant future orders.