Biovails SWOT

Analysis
RECOMMENDATION
Biovail have face serveral problems and their performing is poorly. Based on our
study, we recommend Maris that:
STRENGTH
advanced drug-delivery
technologies
commercialized its products in
Canada and internationally
core competency was its expertise
in the development and large-scale
manufacturing of pharmaceutical
products.
WEAKNESSES
Poor managerial strategy to meet
goals
Managerial unethical conduct and
not reliability data enter
accounting record
Bad reputation due to a traffic
accident that contribute to
unfavorable variance
OPPORTUNITIES
Emerging market
Acquisition and license
agreement-
Well-known brands-branded
products
THREATS
Uncertain R&D outcomes
Tightening FDAs regulatory


STRENGTH (S)
1. advanced
drug-delivery
technologies
2. commercialized its
products in Canada
and internationally
3. core competency was
its expertise in the
development and
large-scale
manufacturing of
pharmaceutical
products
WEAKNESSES (W)
1. Poor managerial
strategy to meet goals
2. Managerial unethical
conduct and not
reliability data enter
accounting record
3. Bad reputation due to
a traffic accident that
contribute to
unfavorable variance
OPPORTUNITIES (O)
1. Emerging market
2. Acquisition and license
agreement-
3. Well-known
brands-branded
products
SO STRATEGIES
1. Make an analysis
and expertise to
know the current
situation for the
Biovail that might
have significantly
overestimate the
amount.
2. Biovail should use
the FOB
Destination
because the
contract already
changes the FOB
WO STRATEGIES
1. Properly manage
the risk
management so that
can avoid from the
uncertainty risk, for
the situation
Biovail faces on the
FOB shipping and
FOB destination so
to avoid from the
risk, the company
should have legal
agreement.
2. Should identify the
Starting Point to
Destination.
3. Biovail should not
recognize the
revenue because
they use FOB
Destination where
it only can be
recognize when the
responsibilities of
the goods been
transfer to the
buyer.

effect of the truck
accident and take
the necessary action
s to avoid the
accident happen.


THREATS (T)
1. Uncertain R&D
outcomes
2. Tightening FDAs
regulatory
ST STRATEGIES
1. Discuss or
communicate with
the management
department to
know the
workflow and the
process of the
company or the
industry, because
for the situation in
Biovail have a
poor
communication
between their
WT STRATEGIES
1. Should have an audit
on financial statement
of the company and
make sure the
company have comply
with the rules and
regulation.
management.



CONCLUSION
The revenue recognition can refer to SAB 101 where it must have an evidence to
prove the goods have been FOB delivered, according to the selling price is fixed or
determinable and collectability. Under FOB Shipping Point revenue can be
recognize immediately after the product leaves the facility. But in this case even
either using FOB shipping point or destination will not give any impact to the third
quarter financial result. Based on the pass analyst situation we need an experienced
and good reputation analyst to covering the company so that the analyst
recommendation will not easily been question.
As the result, FOB Shipping Point and FOB Destination will have the different effects
to revenue recognition. So, Biovail is tried to take advantage to recognize revenue
based on FOB Shipping Point, probably in effort to boost up revenue in the third
quarter. However, this causes overstating of revenue which is wrong by law, thus
resulted in litigation with U.S. Securities Exchange Commission.
REFERENCE
FRANCIS, J. C. (2007, April 3). Gibbonslaw. Retrieved from LexisNexis:
http://www.gibbonslaw.com/files/treppel.pdf
SCHONFELD, M. K. (2006, March 2). Security Exchange Commission. Retrieved
from SEC: http://www.sec.gov/litigation/complaints/2008/comp20506.pdf
Averkamp, H. (12 July, 2006). What is the significance of FOB Shipping Point and
FOB Destination? Retrieved 20 October, 2013, from AccountingCoach, LLC:
http://blog.accountingcoach.com/fob-shipping-point-fob-destination/
Velasques, M. G. (2012). Business ethics: Concepts and cases (7th ed.). New Jersey:
Prentice Hall.
Securities and Exchange Commission. (3 December, 1999). SEC Staff Accounting
Bulletin: No. 101 - Revenue Recognition in Financial Statements. Retrieved 20
October, 2013, from U.S. Securities and Exchange Commission:
http://www.sec.gov/interps/account/sab101.htm