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In: Business and Management

Submitted By elmayka1
Words 1744
Pages 7

(MGT-350)- Business Policy and Strategy
Colorado State University – Global Campus

January 5, 2014

OCTG Executive Summary The issue at hand is the fact that the OCTG market has become too hard to stay profitable in. There is not enough room for a distributor to stay competitive and it is not working for MRC. The points below help raise awareness of the issue at hand:

* Too much overhead and not enough profits * Suppliers (manufacturers) are selling to our customers (end users) * Porters 5 Forces analysis proves that it is not efficient or responsible to stay in the OCTG market. * SWOT analysis shows strength and opportunities to stay in the market, but the weaknesses and threats outweigh the benefits. * Recommended that MRC sell off all OCTG assets to gain capital and abandon a market that has not enough positives for shareholders and stakeholders alike. We will be the Global Supplier of Choice® in the markets we serve by building strong relationships with our customers and suppliers. We create superior value for our stakeholders by working as a team to efficiently buy, sell, and deliver PVF products to the energy and industrial markets (MRC ND). Our suppliers are selling direct and that is handicapping our profitability in the OCTG market. We cannot stick to our own mission in this market.

Issue There is a large issue going on at MRC that needs to be discussed as soon as possible. Oil Country Tubular Goods (OCTG) is a sector of our business that has become a moot and unprofitable segment. OCTG is the pipe that goes down hole after drilling. The profits are dropping and there is too much over head. This is a piece of the business that MRC has had a hand in over the last 20-30 years, but has now become too hard of an area to stay profitable in and we should not stay involved with it. The largest competitors to…...

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