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Mrc, Inc. (a)

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Case summary: MRC, Inc. is a Cleveland based manufacturing company specialized in power brake systems for trucks, buses, and automobiles; industrial furnaces and heat treating equipment; and automobile, truck and bus frames. As till 1957 most of MRC's sales were made to less than a dozen large companies in the automotive industry, it was exposed to the risk inherent in selling to a few customers in a very cyclical and competitive market. To minimize the risk and to explore new business opportunity MRC's management decided to diversify their business operation. After their fifth successful acquisition, the CEO of MRC Archibald Brinton faced with a dilemma of whether to buy American Rayon, Inc. Topics which are covered in this case …show more content…

• Lessen the vulnerability of doing business in a single industry. • To release growth prospects from the cyclical and unexciting automotive industry. • Reduce the threat of backward integration by one or more major customers. After several failed attempt of internal diversification, they realized the lack of knowledge of their management about businesses outside the automotive area. so acquisition brought them quick fix where it brought already knowledgeable people in respective areas in their payroll. By the end of 1960 the diversification campaign had resulted in five acquisitions, two of which were major transactions. |Year |Company | |December 1957 |J.O. Ross Engineering Corp. | |March 1958 |Hartig Engine and Machine Co. | |October 1958 |Transportation Division of Consolidated Metal Products Corp. | |April 1959 |Nelson Metal Products Co. | |November 1959 |Surface Combustion Corp. | Q2.

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