ADX Cable Communications, Inc.
(A, B, C, D, and E)

(A) ISBN 0-538-88684-6
(B) ISBN 0-538-88815-6
(C) ISBN 0-538-88817-2
(D) ISBN 0-538-88819-9
(E) ISBN 0-538-88821-0

Case Teaching Package
A case teaching package is available for these cases. It includes strategies for case presentation, key concepts, solutions to the assignment questions in the cases, and suggestions for the most effective ways to work these cases into your course.

Length
Case (A) is 14 pages in length, Case (B) is 6 pages, Case (C) is 6 pages, Case (D) is 6 pages, Case (E) is 6 pages, and their case teaching package is 12 pages.

Abstract

ADX Cable Communications, Inc., has grown from a small, family-owned and -run corporation with a handful of cable properties to one of the largest cable-television operators in the United States. (By March 1994, ADX owned or managed cable systems that passed through approximately 1.8 million homes in eight states, and it had more than $1 billion in assets and $320 million in annual revenue.) Although the company is now publicly traded, the founding Minelis family continues to hold 60% of the common stock outstanding, and four members of the family hold key management positions.

In the twenty years since the firm's inception, the telecommunications industry has mushroomed and become increasingly complex. The industry is in a period of consolidation characterized by mergers, joint ventures, acquisitions, sales of all or part of cable companies or their assets, and other partnering and investment transactions. In addition, developments in government regulations, programming offered by competitors, and changes in technology have the potential to greatly affect ADX's cable-television operations.

Case A
The A case provides background information on the telecommunications industry, ADX's managerial structure, its own financial position, and the financial position of comparable cable operations. Students need to grasp the unique managerial and structural features of the company, as well as the firm's strategy of clustering its operations, as a basis for preparing cases B–E.

Cases B & C
These cases focus primarily on marketing issues. Students must consider the competition for cable services and the pricing of ADX services. Should ADX maintain its present course, or should it try to compete directly with those who are offering programming and technical alternatives? If ADX does decide to compete directly, will it cannibalize its traditional business? Changes in the regulatory climate will affect ADX's decisions.

Case D
The D case involves management and human-resources questions, such as how ADX should improve customer service, how to handle management succession, and how to maintain a corporate culture.

Case E
In the E case, students tackle broad managerial and operational issues posed by changes in government regulations and globalization. Students must decide whether ADX should accept a buyout offer from a foreign firm, what the partnership arrangement might be in such a situation, and how such a purchase would affect the company's culture.

Linkages to Textbooks or Journal Articles/Fit Within a Course

These cases are intended for use with undergraduate students who have already taken a basic corporate-finance class or with graduate business students. The cases may be presented as a series in a multidimensional course dealing with issues in human resources, operations, finance, marketing, globalization, and management. Used this way, they offer students the opportunity to grapple with the relationships between a host of common business issues. At the same time, students learn how these issues may evolve within a specific context: the telecommunications industry.

The cases may also be used separately in classes that focus on one or groups of the issues outlined above. Whether the instructor decides to use all the cases or only some, students need to read the A case first because it presents essential background information. Cases B–E need not be used in any particular order.

Study Questions

Case A

1. What are the key industrial changes taking place that affect ADX? What opportunities do these changes offer ADX? What threats do they pose?
2. Describe the strategic approach taken by ADX and its effect on the company's structure and management?
3. Analyze ADX's financial statements. Derive the basic financial ratios and compare them to ratios of typical Fortune 500 companies. How would you assess the firm's health and financial options?