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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.