Pegasus Research Institute-The Development of a Cost Accounting and Project Management System for a Small Defense contractor.(Instructor's Note)

CASE DESCRIPTION This case highlights the importance of business strategies in transforming a company from being merely a "maintenance" company to one that has grown to be a significant player in the telecommunications industry in a relatively small market. The business strategy discussed in this case focuses on two areas: new product development and rebranding and remarketing. This case has a difficulty level of three and up, appropriate for junior level and beyond. The case is designed to be taught in two class hours in a strategic management, managerial economics, or marketing course, and is expected to require about three hours of outside preparation for students, consisting mainly of reading the case and familiarizing themselves with the business environments on the U.S. territory of Guam in the Western Pacific region as well as with some knowledge of the telecommunications industry. CASE SYNOPSIS Started in 1993 by United Micronesia Development Association, formerly Marianas Cable Vision and currently MCV Broadband has grown into the region's largest telecommunications provider. Since 2005, MCV Broadband has adopted business strategies that effectively transformed this once mediocre company into a leading competitor in telecommunications. This paper will look at the evolution of MCV Broadband and the strategies that have brought success to this company, as well as their future plans to maintain their business success. The greater part of this paper will cover information gathered from an interview with Craig Thompson, Ph.D.--Chief Executive Officer of MCV Broadband. HISTORY Except for who the original owners were, little is known about the pre-2005 history of Marianas Cablevision, although it has been in existence since 1993. This is true for the company's logistics, including start-up costs, staffing, services, prior to it become MCV Broadband. According to Thompson (2009), much of the growth related history of this company and the events that brought them to their current standing began only after the change of ownership took place in 2005. The early stages of this company, although competitive locally, were not impressive by industry standards for companies that did cable television operations in the United States and elsewhere. As cable television companies in the U.S. continued to expand rapidly, offering an abundance of services, Marianas Cablevision lagged further and further behind. The history of Marianas Cablevision is one that does not contain significant changes in strategic direction save two moves worth noting the first of which is the merger that occurred in 1997, when United Micronesia Development Association--Marianas Cablevision's parent company--bought out their competitor, Guam Cable Vision. The second move that occurred was United Micronesia Development Association's purchase of Kuentos Communications--Guam's first internet company--in 2000. These moves enhanced Marianas Cablevision's potential as it became the sole provider of cable video services and the dominant provider of internet services in the Marianas. However little was made of this potential as Marianas Cablevision did nothing to expand its video or internet product offerings or aggressively market either service. United Micronesia Development Association failed to make the capital investments necessary to grow the company. According to Thompson, before the company was bought out by Seaport Capital in 2005, it was operated in a very "old-school" manner, both as cause and consequence of lack of the investments in the company. He further stated that the MCV Broadband was only being maintained by its owners, who did the bare minimum to simply keep the company afloat and operational, often referred to as a "maintenance company". However, the change of ownership in 2005 changed all this, and turned the company into a successful endeavor for its investors. FINANCIAL BACKING In looking at the development of this now successful company, the quote that comes to mind is, "One man's junk is another man's treasure. …