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CORPORATE GOVERNANCE - a relationship amongstakeholders - to determine and control strategic directionand performance of organizations - establish order between arms owners and its top-level managers whose interests
may be in conict.
GOVERNANCE MECHANISMSi. Internal
Ownership Concentration
Board of irectors !"ec#tive Compensation
ii. External
$arket for corporate control
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SEPARATION OF OWNERSHIP AND MANAGERIALCONTROL
%eads to &n Agency'elationship
e.g.
a. (ossible (roblems
b. )se Of *ree Cash *lows
$anagerial opport#nism
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ACCOUNTING AT
BIOVAIL
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i Strategic Profle and Cae Anal!i P"r#oe
ii Sit"ation Anal!iA$General en%iron&ent anal!i'$Ind"tr! Anal!i
C$Coetitor Anal!iD$Internal Anal!i
iii Identifcation o( SWOT Anal!i
i% Strategic For&"lation
A$Strategic Alternati%e'$Alternati%e E%al"ationC$Alternati%e C)oice
% Strategic Alternati%e Ile&entationA$Action ite&
'$Action #lan
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& specialty pharmace#tical company thatapplies advanced dr#g-delivery technologies toimprove the clinical e+ectiveness of medicines.
,he Company is engaged in the form#lationclinical testing registration man#fact#re andcommercialization of pharmace#tical prod#cts.
!#gene $elnyk*o#nder Chairman of Board oirectors C!O of BiovailCorp.
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AN ANALYSIS OF SITUATIONS THAT LACK OF CORPORATE
GOVERNANCE MECHANISM
CASE ANAL*SIS P+RPOSE
ETHICS
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A MODERN P+'LICCORPORATION
CASE ANAL*SIS P+RPOSE ,cont$-
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1. Scanning
2. Monitoring
3. Forecasting
4. Assessing
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THE E.TERNAL
ENVIRONMENT
IND+STR*ENVIRONMENT
,hreat of new!ntrants
(ower of /#pplies(ower of B#yers
(rod#ct /#bstit#te0nd#stry 'ivalry
111111111111111111111111
COMPETITORENVIRONMENT
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Ind"tr! #rofti a o( /(orcecoetition&odel 0
2.,hreat of newentrants3.'ivalry amongrms4.,hreat ofs#bstit#teprod#cts5.Bargainingpower of b#yers6.Bargainingpower ofs#pplies
0nterpretationof data
analysis coverinternational
market
iagnosecompetition positioning
andprotabilitywithin theind#stry
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Biovail need to unde!tand it! "o#$etito "o#$onent! ena%le it to &ain
"o#$etitive advanta&e ' da#a&e it! "o#$etito a%ilit( to e)$loit a
"o#$etitive advanta&e
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&7&%8/0/ O7
9&%)!C'!&,0O
7
(roc#rement
,echnological
:'
*irminfrastr#ct#re
0nbo#nd;o#tbo#nlogistic
Operation
$arketing sales
/ervice
O),/O)'C07< ,:!C)''!7, $&7,'&
,'!7/
CHEC1 INTERNALCONDITIONS 2
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'igger Co%erage O( Area
Ser%ed In Nort) A&erica
Intellect"al Pro#ert!
Li&ited In%etor Confdent
Managerial O##ort"ni&
C"tting Do3n O( R4D
Lac5 O( Cor#orate
Go%ernance6Acco"nting
Policie
Hig) Accr"ed Legal
Settle&ent
Dr"g6Deli%er!
Tec)nologie
Ac7"iition And Licene
Agree&ent
Stringent Food 4 Dr"g
Ad&initration8 ,FDA-
Reg"lator!
Her9al Prod"ct
OPPORT+NITIE THREAT
STRENGTHS WEA1NESSES
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Alternati%e :Merger
Ad%antage E;ternal"##ort re7"ireto en"re t)efnancial o"ndtrengt) Leader)i#
deteriorationi"e can 9ereol%ed
Diad%antage
>?@ 'io%ail i(acing Leader)i#
Deterioration@)are)older%al"e and)are #rice 5ee#::$B in =>>$ 'io%ail to
re(oc" t)e9"ine $
Alternati%e =
Alternati%e C)oice
Ad%antageEn)ance t)einternalarrange&ent
t)ro"g)cor#orateretr"ct"ring
Diad%antage
Leader)i#deterioration
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:$ Searc) AndSelect
=$ Tet 4P"r#oe
$ Deign 4Action
Planning
?$ LegalCo&9ination
/$ O#erationalCo&9ination
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Biovail s#ccessf#lly merge with9aleant (harmace#ticals0nternational := in Ontario.