Mtc Case Analysis

Technology & New Product Development S17

(ENTP 6375.501/SYSM 6332.501)

Mid-Term

Topic: Linking Strategy and Innovation:

Materials Technology Corporation

Submitted By:

Deepima Pathania

NET ID: dxp162830

OVERVIEW

• MTC was founded in 1984 by venture capital backed group of MIT scientists for making advancements in ceramics processing technology.

• At their inception, they had no actual products or technology but quickly made several innovations in the field of ceramics technology such as Tape Casting, ‘Quickset’ Molding Technology and multi-layered ceramics molding.

• Over time, their reputation for technological success grew and R&D department was formally divided into 5 different groups. However, with reluctance of senior management, they had to deal with too many projects which can have an adverse effect on the company. The decision needs to be taken in terms of whether to accept new projects or make trade-offs or decline new offer from Block (Sales and Marketing Manager)

Q1.  How would you characterize the various projects MTC has undertaken, in the framework discussed in Chapter 7, Figure 7.6 in the Schilling book (Also see Wheelwright and Clark)?

• Based on the aggregate Project Planning framework, the projects are characterized as shown in table below:

• Research and Development: Creation of commercial scale powder production process and monodispersing of particles did not have any direct commercial application. However, these two technologies served as the foundation to the creation of four technology building blocks.

• Breakthrough Projects: The breakthrough projects created entirely new product categories and new markets for which significant resources were required. MTC developed – ‘Quickset’ process with a huge success.

• Derivative Projects: The derivative projects mentioned in the table above required only incremental changes to products manufactured using existing technology blocks and subsequently fewer resources.

• Platform Projects: The technology to build sensor package was already in place, however, it was still undergoing development as it required MTC to develop the right material. Since it does not introduce the untried technology, making it one of the platform projects.  

• Alliance and Partnerships: MTC formed an alliance with XS Technology to manufacture substrate with high thermal conductivity and that’s what MTC excelled at. Albeit it proved to be challenging for MTC, they collaborated with XS Technology to design the right product for them.

Q2. What is MTC’s strategy?

• MTC’s strategy was to develop a common process to manufacture products that could be sold into various market segments. Their strength was their promising technology to create revolutionary materials. For their strategy to obtain substantial investment in capital, they used $2.5 million to recruit the best technical team in the industry to attract equity investment and development funding from large corporations.

• MTC succeeded in creating ‘Quickset’ process which was a breakthrough by gaining insights from various industries such as: Photographic Industry, Food Processing industry, etc. MTC’s common technology base (how to make submicron powders and to disperse submicron powder in slurries) provided foundation to form four building blocks (Multi-Layer Substrate Technology, Tape Casting Technology, Injection Molding Technology and Ceramic Fiber Spinning Technology) to make products that could be sold into various market segments.

• Financial strategy: To reach a break-even point, they wanted initial research and development costs to be profitable. They planned to do it by fully funded joint development programs with corporate partners wherein both MTC and their partner would have the rights to practice technology. This was a great strategy to analyze market since the markets were emerging and there was no data to perform analysis. MTC used equity capital to fund losses in marketing and manufacturing products. Their aim was to generate revenue from product sales rather than funded research as their ambition was to be a major manufacturing company.

Q3. How can you use Project Matrix from Question 1 to link strategy with new product development?

• The process, product and market development was highly intertwined in MTC. Using the project matrix above, the strategy can be linked to new product development on the basis of three levels of ambitions:

• Core – Enhancements to core offerings: The derivative projects mentioned above that MTC undertook were the enhancements to their existing technology blocks.
• Adjacent – Pursuit of adjacent opportunities: Platform projects that required more than just an increment to their existing technology
• Transformational – Ventures into transformational territory: Breakthrough projects introduced technologies such as Molding and Tape Casting for inventing things for markets that didn’t exist during the inception of MTC.

• According to Ansoff’s Matrix, below is the mapping of the new product development with the strategic growth of the organization:

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