Cabletron Corporation

Babson Professor Julian Lange, Case Director and Case Writer

Arthur M. Blank Center for Entrepreneurship

© Babson College, 2001.

Abstract

Opportunity keeps knocking for a start-up company selling cable for computer networks. Despite frequent cash-flow problems and bankers looking for sound financial ratios including monthly profit statements, the partners feel that new opportunities must be seized despite the pains that come with rapid growth.

Expanding first into the network installation business, they keep costs low by hiring subcontractors while they manage the projects. Next, they begin researching and designing network test equipment to increase the quality of their installations and to give their company a competitive advantage. As the company grows, human resource issues develop such as hiring and firing procedures and relocation decisions. The company soon becomes a multibillion-dollar company and the largest employer in New Hampshire.

Note: This case can be used with the Collingsworth case, which details the founding of Cabletron.

Location of the company: New Hampshire and Massachusetts

Years spanned by the case: 1984 through 1988

Industry segments: Cable, cable installation, test equipment

Stage of the company: Growth

Age of the entrepreneurs: late 20's

Key Words: Entrepreneurship, partnership, network, cable, test equipment, human resources.

DVD

There is no DVD available for this case.

Teaching Notes

A five page case teaching package, written by Julian Lange, is available for this case. The teaching package includes strategies for case presentation, key concepts, solutions to the assignment questions in the case, and suggestions for the most effective ways to work this case into a course.