Strategic Management in Handling Turbulence

Introduction Business environments are described or analysed in various ways based on disparate important dimensions. However, the concept of turbulence is ambiguous. This confusion touches on the varying orientations in studying organisational environments and the diverse methods that are used to measure it.Advertising We will write a custom essay sample on Strategic Management in Handling Turbulence specifically for you for only $16.05 $11/page Learn More This paper will define environmental turbulence and give its three major dimensions. The paper will consider a case study of Tesla with specific emphasis on the types and sizes of batteries used in the company’s electric cars. Tesla innovation will be discussed by considering how it has dealt with turbulence. Definition of environmental turbulence Environmental turbulence underscores the extent of change and degree of complexity in a business environment. Changes in technology, statutory regula tions, or environmental factors are some of the examples that constitute environmental turbulence (Carman, 2003). Therefore, a turbulent environment is dynamic, expanding, unpredictable, and fluctuating. In addition, such an environment displays high levels of interconnectedness with the business. Turbulence is a complex interaction of several dimensions that are related to change where some elements dominate others or overlap each other at times (Grant, 2003). The figure below shows the configuration of the main dimensions of environmental turbulence. Intensity of Changes Dynamism Environmental Turbulence Frequency of Changes Number of elements Complexity Relatedness of elements Availability of information Predictability Predictability of changes Fig: 1 – Dimensions of environmental turbulence. Dynamism If the components of the tasks of the environment are highly variable, the business needs to be flexible. Dynamism in this case refers to the extent to which the components of the environment of a business unit remain constant or changing over a given period. Consequently, this dimension varies from static to dynamic.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More For instance, a dynamic environment may be defined by technological changes, varying customer preferences, and frequent entrance and withdrawal of competitors (Mason, 2007). In environmental dynamism, the frequency of environmental change is not differentiated from the intensity of the changes. However, changes in the business environment can occur very fast, but with low intensity. A good example of this scenario is how demand sometimes fluctuates on a daily basis. Similarly, there can be substantial changes happening with less frequency. From this description, the dynamism dimension of environmental turbulence has frequency and intensity of changes as its two sub-dimensions. Complex ity The complexity of an organisation’s environment is subject to the number of elements in that particular environment. The environment has a large number of elements that are involved in its complexity (Rigby, 2001). The complexity dimension applies well to the organisations with a sizeable range of special products, which receive various types of clients and have markets spread over wide geographic areas. The interaction of the environmental elements leads to environmental complexity (Mason, 2007). In a case where the environmental components have few interdependencies (interaction), it is easy to subdivide them into homogeneous groups. As an example, a business that has varied clients, like domestic consumers, industrial, or governmental clients, could segment them into distinct groups. This aspect reduces the complexity of handling the clients. However, segmentation is not possible if there is a strong relationship amongst the many business environmental elements (Quist, 2009). Therefore, the environment is very complex. Therefore, the complexity of the organisational environment depends on the number of elements involved coupled with how they are related. Predictability Predictability or uncertainty covers the two dimensions discussed above. The business environment can be very dynamic and complex, but predictable at the same time. Unpredictability reflects the â€Å"degree to which the relationships between the cause and effect concerning the environmental elements are incomplete† (Carman, 2003, p. 91).Advertising We will write a custom essay sample on Strategic Management in Handling Turbulence specifically for you for only $16.05 $11/page Learn More When the variability of the environmental elements is linear or cyclical, this dimension can help the management to predict future developments by extrapolating the available trends. Nevertheless, in many business environments, data regarding future developments is not clear. The data available might show discontinuities in business trends, but fail to show when these will occur and in what direction. This aspect might force the management to ignore certain data, which may be relevant. Therefore, such an environment is relatively unpredictable (Danneels Sethi, 2011). In such unpredictable environments or where data is unavailable, the management has to be flexible. The predictability dimension has two sub-dimensions, viz. predictability and the availability of information about the changes in the environment. Case Study This paper is going to take a case study of the storage battery industry, which has the potential of becoming a multi-billion dollar industry. Innovations in this industry could help customers in times of power outages and as alternative power sources during peak hours. The greatest challenge facing this industry is the pricing of the batteries and making a scalable package (Collantes Sperling, 2008). The demand for these batteries depends on the market coverage and statutory regulations. For instance, these batteries could form alternatives to solar panel users who can sell excess kilowatts to their local grids. In some markets, utility providers try to push back extra surcharges, thus causing resistance to users. These storage batteries could succeed in markets experiencing high prices in energy.  The highest adoption of storage batteries is expected among large commercial buildings and the residential sector. The large commercial buildings suffer from the demand charge that is levied by power generating companies, which charge proportionally to their peak consumption. For these users, the batteries could help them because they can be charged during off-peak and be used during the peak. This move could help them to earn incentives from demand response programs offered by utilities. An example of demand-response program participants is the University of Pennsylvania. When electricity prices increa se, the regional transmission operator calls to inform the university. The University responds by switching off heavy energy devices like chillers. Therefore, batteries are a good alternative to respond to energy spikes. Battery technology could bring a paradigm shift in how people think of energy.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More In response to this emerging opportunity, several battery manufacturers are forming joint ventures in a move to come up with a lithium-ion battery technology. There have been advances in this direction, which has reduced the cost/kilowatt hour from $1850 in 1999 to $500 in 2006.The industry players expect that with the technological and manufacturing improvements, highly compact models will be produced to cover various markets. The increased optimism about the future of storage batteries has attracted many start-ups in the battery manufacturing industry with expanding variety of lithium ion technology. However, as the future uptake of batteries for storage is not very clear, as manufacturers are not aware of the capacity levels. Therefore, the future success of the industry remains a function of the resulting interplay amongst the dynamics in the battery industry (Sierzchulaa, Bakkerb, Maatb Weea, 2012). Using the models of environmental turbulence, the industry is summarised below Environmental Turbulence -The Macro environmental issues include technology, government regulations, and customer preferences Dynamism Model – Battery technology is expanding and customer preferences are changing with these technological improvements in electric vehicles. Manufacturers have to comply with local and international regulations Complexity Model -The governments are offering incentives to promote as well as restrictions to control the industry. These incentives are motivating new entrants and the existing players to work towards meeting the changing customer expectations. The interaction of these factors is complex Predictability -The future of storage batteries is not clear. Even though it is predictable that the governments will continue promoting and controlling the industry, it cannot be predicted how the technological changes will influence the customers’ preferences. Tesla Innovation Tesla has set up its research and development labs where it is developing batteries and recharging technology. Therefore, Tesla has an important edge in changing the environment of the storage battery industry. It has an innovative technology in battery making and recharging, which has given it a competitive advantage in manufacturing affordable batteries, which can recharge quickly. This aspect is helping the company to lower its cost as opposed to the competitors. The following section highlights how Tesla has dealt with environmental turbulence.  Tesla has manufactured the Powerwall Brand batteries that cost $3000 for 7KwHr and $3500 for 10KwHr. These batteries are designed for use as power backups when there are power cuts in residential setups. This brand is also suitable for commercial buildings as an alternative source of power, which underscores how Tesla deals with the aspect of dynamism. Consequently, the highest adoption of storage batteries is expected among large commercial buildings and residential sector. The large commer cial buildings suffer from the demand charge that is levied by power generating companies, which charge proportionally to their peak consumption. For these users, the batteries could help them because they can be charged during off-peak and be used during the peak. This move could help them earn incentives from demand response programs offered by utilities. The Tesla’s Powerwall brand is a compact battery as compared to the ordinary batteries. In a bid to deal with complexity, the company is using lithium-ion batteries, which are the size of AA batteries. The new battery has a reduced cost/kilowatt hour. By choosing these cylindrical cells, Tesla saves on production costs. The company also uses the most energy dense materials because the smaller and compact cells are safer. This move towards energy density means that Tesla wires together many separate cells, as opposed to hundreds of large cells. Another innovative product in this category is their cooling liquid that flows b etween the cells, thus cooling them so that a problem in one cell does not affect the rest. Competitors are watching what Tesla is doing and moving fast to keep pace. On predictability, Tesla knows that these changes towards a safe environment will undoubtedly be the way forward in the industry, and thus it has positioned itself optimally to be the market leader. Conclusion and implications Environmental turbulence has three dimensions. Dynamism refers to the extent to which the components of a business unit environment remain constant or changing over time. The environment that has a large number of elements involved becomes more complex. The business environment can be very dynamic and complex, but at the same time, predictable. From the case study, some organisational environment elements are causing turbulence in the storage battery industry. These elements include technology, governmental regulations, and customer preferences. Technology is changing continuously. For instance, Tesla is using energy-density lithium ion cells. This aspect means that it uses thousands of small cells as opposed to other automakers who are using hundreds of large batteries. Governments are promoting storage batteries by offering incentives that encourage entrants into the battery manufacturing. The interaction of these environment factors creates a complex business environment. However, the future uptake of batteries as storage options is not very clear. The success in the future remains a function of the resulting interplay amongst the dynamics in the battery industry.  Tesla is moving very fast with innovations in battery manufacturing, and this aspect could affect other industries such as electric cars. Tesla has reduced the size of batteries by using energy density materials. The success of the Tesla’s innovations on batteries could affect the electric car industry and energy storage in residential and commercial buildings. The greatest implication is that the ele ctric car industry could become more practical. This assertion holds because as per the Tesla’s plans, there will be recharge stations nationwide delivering up to 256 miles in thirty minutes. As other competitors are watching, there could be an emergence of other technologies from competitors, thus sparking a fast growth of the industry. There could be also diversification to other market segments such as energy storage in residential and commercial buildings. References Carman, R. (2003). The Relationship among Environmental Turbulence, Strategic  Behaviour, Competitive Posture, and Performance: The Case of State and Federally Chartered Credit Unions. San Diego, CA: Alliant International University Press. Collantes, G., Sperling, D. (2008). The origin of California’s zero emission vehicle  mandate. Transportation Research Part A: Policy and Practice, 42(10), 1302-13. Danneels, E., Sethi, R. (2011). New Product Exploration under Environmental  Turbulence. Organ isation Science, 22(4), 1026-1039. Grant, R. (2003). Strategic planning in a turbulent environment. Strategic Management  Journal, 24(6), 491-517. Mason, R. (2007). The external environment’s effect on management and strategy: A  complexity theory approach. Management Decision, 45(1), 10 – 28. Quist, A. (2009). Credible Leader for Turbulent Times: Examining the Qualities  necessary for leading into the future. Journal of Strategic Leadership, 2(1), 1-12. Rigby, D. (2001). Situational strategies: A management tool for turbulent times. Strategy   Leadership, 29(6), 8 – 12. Sierzchulaa, W., Bakkerb, S., Maatb, K., Weea, B. (2012). The competitive  environment of electric vehicles: An analysis of prototype and production models. Environmental Innovation and Societal Transitions, 2(1) 49– 65. This essay on Strategic Management in Handling Turbulence was written and submitted by user Hadley Hendricks to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.

How To Use The Power Of Podcasting To Increase Your Audience

How To Use The Power Of Podcasting To Increase Your Audience Podcasting: Many see it as an amazing opportunity but don’t really understand the nuts and bolts of how to begin, how it compares to other marketing channels, and how to evaluate your ROI. Today we’re going to change all that by having a great discussion with Sarah Rhea Werner, the host of the Write Now podcast. As a columnist for Forbes on the topic of podcasting, she’s definitely an authority on the topic. If you’ve ever considered podcasting, you won’t want to miss today’s episode! How and why Sarah got into podcasting. The types of opportunities Sarah has had since starting podcasting that blogging wasn’t bringing her. Audience-building advice for marketing teams and companies. Why it’s so important to create your podcast based on what your listeners like. Tips on striking a balance between providing value and marketing yourself through your podcast. Why it’s important to make sure any selling that you do on your podcast is delightful, interesting, and fun. How a podcast is both similar to and different from different marketing avenues. Some of the tactical challenges and practices of podcasting. Sarah’s best final advice for a brand who is toying with the idea of a podcast. Links: Write Now Podcast Email us a screenshot of your iTunes review! If you liked today’s show, please subscribe on iTunes to The Actionable Content Marketing Podcast! The podcast is also available on SoundCloud,  Stitcher, and Google Play. Quotes by Sarah: â€Å"If you want to get additional readers for your blog or for your book do public speaking.† â€Å"Podcasting is a ton of work. It’s worth it, but it’s a ton of work.† â€Å"If you absolutely need to do have an ad, make sure it’s delightful, make sure it’s in line with your show and it’s in line with your message.†

Breakdown and Review of Where the Wild Things Are

Breakdown and Review of 'Where the Wild Things Are' Where the Wild Things Are by Maurice Sendak  has become a classic. Winner of the 1964 Caldecott Medal as the Most Distinguished Picture Book of the Year, it was first published by HarperCollins in 1963. When Sendak wrote the book, the theme of dealing with dark emotions was rare in childrens literature, especially in picture book format. Story Summary After more than 50 years, what keeps the book  popular is not the impact of the book on the field of childrens literature, it is the impact of the story and the illustrations on young readers. The plot of the book is based on the fantasy (and real) consequences of a little boys mischief. One night Max dresses up in his wolf suit and does all kinds of things he shouldnt, like chasing the dog with a fork. His mother scolds him and calls him a WILD THING! Max is so mad he shouts back, ILL EAT YOU UP! As a result, his mother sends him to his bedroom without any supper. Maxs imagination transforms his bedroom into an extraordinary setting, with a forest and an ocean and a little boat that Max sails in until he comes to a land full of wild things. Although they look and sound very fierce, Max is able to tame them with a single glance. They all realize Max is ..the most wild thing of all and make him their king. Max and the wild things have a fine time creating a rumpus until Max begins to want to be †¦where someone loved him best of all. Maxs fantasy ends when he smells his dinner. Despite the wild things protests, Max sails back to his own room where he finds his supper waiting for him. The Books Appeal This is a particularly appealing story because Max is in conflict with both his mother and his own anger. Despite the fact that he is still angry when he is sent to his room, Max does not continue his mischief. Instead, he gives free rein to his angry emotions through his fantasy, and then, comes to a decision that he will no longer let his anger separate him from those whom he loves and who love him. Max is an engaging character. His actions, from chasing the dog to talking back to his mother are realistic. His emotions are also realistic. Its quite common for children to get angry and fantasize about what they could do if they ruled the world and then calm down and consider the consequences. Max is a child with whom most 3- to 6-year-olds readily identify. Summing Up the Impact of the Book Where the Wild Things Are is an excellent book. What makes it so extraordinary is the creative imagination of both Maurice Sendak the writer and Maurice Sendak the artist. The text and the artwork complement one another, moving the story along seamlessly. The transformation of Maxs bedroom into a forest is a visual delight. Sendaks colored pen and ink illustrations in muted colors are both humorous and sometimes a little scary, reflecting both Maxs imagination and his anger. The theme, conflict, and characters are ones with which readers of all ages can identify, and  is a book that children will enjoy hearing again and again. Publisher: HarperCollins, ISBN: 0060254920

Brief Synopsis of the Film Avatar Essay Example | Topics and Well Written Essays - 1000 words

Brief Synopsis of the Film Avatar - Essay Example Colonel Miles Quaritch who heads the Earth’s security force, however, found the rich source of unobtanium which is the Na’vi’s sacred gathering place and attacked it. Jake joined in defending Hometree that led to the eventual retreat of the humans. Jake was later transferred to his avatar permanently through the help of the Tree of Souls. II. The intersection of two issues: racial and gender discrimination Humez and Dines theorized that mass media which are the radio, television, and film help form our identities that includes the way we see the world, relationship with it and the values we hold and cherish (2002). In essence, media has so much influence that it could dictate our perception and value system particularly the film because it immerses its audience in the reality it portrays and thus, inadvertently influences its audience of the cultural and social perspective of the film. In James Cameroon film Avatar, there is two distinct cultural and social persp ective of the film that causes injustice and subjugation wrought by greed and social stratification. These two distinct issues that were obvious in the film that is the discrimination of humans against Na’vis who were viewed by humans as primitive and with condescension whose race is taken as an impediment in their quest to harvest the mineral unobtanium. This relationship between humans and Navi’s become unjust because it perpetuated a system of inequality whereby it restricts some people while privileging others (Magner qt. in Weber 13). Another subtle issue that was present in the film was the gender issue of stereotyping of women as people who are often subjugated to men. This became an injustice because Na’vis imposed a social stratification that subjugates a gender (female) to another gender (male). These issues intersect in a way that the race and a particular gender are relegated to another which in this case are the Na’vis and the women to be bel onging in the lower strata as represented by Neytiri, the chieftain and the spiritual leader’s daughter.  

Healing Process Nursing Essay Example | Topics and Well Written Essays - 1000 words

Healing Process Nursing - Essay Example However, the overall diversity of the spiritual beliefs may make it relatively difficult for the healthcare service providers to critical evaluate and understand all the different aspects. In consideration of this, this paper will therefore discuss the results of interviews taken from Sikh, Jain and Baha’i patients to understand their perspective on healing and healthcare. Spiritual Perspective on healing According to our Sikh patient, the divine name is considered as the healing medium through which healing could occur. According to their belief, those ailments which cannot be vanished can vanish with the name of the divine. As such the spiritual perspective of this patient regarding healing is entirely based upon connecting the divine name and heals through that. Jain religion is considered as similar to the Buddhism as teachings of both are relatively similar. According to our Jain patient, her spiritual perspective is rather based upon the meditation and adapting a holisti c approach towards life. This therefore ensures healing because extracting stress out of the body can heal according to Jain spiritual practices. Baha’I perspective on healing is based upon the use of relaxation as well as adequate nutrition to achieve health. Our patient suggests that she believes that good relaxation as well as stress free living actually allows our souls to heal our bodies. Critical Components of Healing According to Sikh spiritual practices, meditation of the name of the divine is the most important component of achieving health. This therefore requires the person to actually focus on the name and allow the frequencies of that name to merge with the person to get healed. Apart from this, there is also a degree of faith involved because every person is required to have that faith before they can actually use the divine name to achieve the healing. Further, according to Jain religion, it is meditation which is most important to achieve the health benefits a nd connect the healing process. It is believed that meditation is the starting point in Jain traditions to actually start the healing process. Apart from this, focus on a typical diet is also another critical component of healing as it is believed that different foods have the healing powers and can expedite this process. According to Baha’I traditions, focus on good diet is the starting component to achieve the healing besides focusing on the prayer as the essential component of healing. Prayer has also been discussed in different literature to have an impact on the healing. (Ameling., 2000). Another important component is achieving gradual relaxation and how to overcome the stress from the body. It is therefore critical for a person to ensure that gradual and short bursts of relaxation are achieved either through meditation or other means to actually get the stress out of the body. This would ensure that the body develops its own fighting mechanism to deal with different ai lments. Different Spiritual Beliefs In a multi-cultural as well as multi-faith society it is relatively difficult for the Nurses and healthcare services providers to offer complete spiritual support to the patients to get healed. The diversity of the spiritual practices therefore makes it relatively difficult for the healthcare providers to accommodate or deal with. (MacLaren, 2004) However, all three patients believe that what is important is whether the healthcare service provider can actually understand their spiritual needs. This is therefore regardless of the fact that whether the belief system of the healthcare service provider is relatively different from their own. This suggests that patients are relatively more interested in whether the nurses and other staff can actually unde

Gainesboro Machine Tools Corporation Essay Example for Free

Gainesboro Machine Tools Corporation Essay Kendle International Inc. We looked at the competitive landscape and, based on what was happening, knew we were either going to sell Kendle, grow or disappear. It was May 1997, and Candace Kendle, the chairman and chief executive officer of Kendle International Inc. (Kendle), and her husband Christopher C. Bergen, the president and chief operating officer, were reviewing the strategic options for their Cincinnati, Ohio based company. Kendle, a business they had founded over 15 years previously, conducted clinical trials for pharmaceutical and biotechnology companies to test the safety and efficacy of their new drugs. The company had grown successfully to $13 million of sales and had attracted significant business from major pharmaceutical and biotechnology companies. Kendle was competing, however, with several larger contract research organizations (CRO), many of which had an international presence that allowed them to do clinical studies outside the United States and gave them an advantage when competing for major projects. To compete more effectively, Candace and Chris had embarked on a plan to grow through acquisition, particularly internationally, and to finance this growth through a public offering of equity. Toward this end, by the spring of 1997 Kendle had lined up two potential European acquisitions—U-Gene, a CRO in the Netherlands with 1996 sales of $12.5 million, and gmi, a Germanbased CRO with $7 million in sales. To finance these acquisitions, Kendle had worked out possible debt financing with Nationsbank and was working with two investment banks on an Initial Public Offering (IPO) that would repay the bank debt if successful and provide the equity base for future acquisitions. It was now time to decide whether to go ahead with the full program of two acquisitions, a large debt financing and an equity issue. Kendle History Candace and Chris met in 1979 while working at The Children’s Hospital of Philadelphia. Candace had received her doctorate in pharmacy from the University of Cincinnati, then taught in North Carolina and Pennsylvania. Her scientific specialty was virology. At the Children’s Hospital, Candace was serving as the director of pharmacy, working as an investigator on a study of an antiviral drug for the pharmaceutical company Burroughs Wellcome. Chris, a Wharton MBA, was a senior administrator at the hospital. Research Associate Indra A. Reinbergs prepared this case under the supervision of Professors Dwight B. Crane and Paul W. Marshall as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. Copyright  © 2000 by the President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School. 1 Looking for something new, Candace and Chris began to discuss the idea of going into business together. One day in early 1981 Candace received an unexpected visit from a new physician, replacing the usual medical monitor for her project with Burroughs Wellcome. This physician was a pioneer in the  contract clinical research business. As he described how his business worked, Candace became more and more intrigued. When he left that day, she immediately called Chris and said, â€Å"I’ve got a business idea!† The concept was to set up a small research consulting firm that would take on outsourced research and development (RD) work on a contract basis from large pharmaceutical and biotechnology companies. Based on the positive response she received from potential clients, Candace left her job at the hospital in June 1981 and Chris left his job in December 1981. Kendle International Inc. was incorporated in Cincinnati, Ohio in 1981, with Candace taking 55% of the shares, and Chris 45%. Candace had strong ties to the Cincinnati area. Her grandfather, a coal miner, had moved there from Appalachia, and the clan had grown to about 140 members, including Candace’s two sons from a previous marriage. By January 1982, Candace and Chris were working from Candace’s parents’ home. Kendle started as a small company with a few contracts, and business grew slowly through referrals from professional colleagues. Kendle suffered the usual bumps of a start-up business, particularly in the late 1980s when it suffered a loss for two years and ran up $1 million in bank debt on a $250,000 line of credit. Afraid that its bank would call the loan, the company went through a bankruptcy scare. Fortunately, Kendle succeeded in attracting business from a new client, the pharmaceutical company G.D. Searle Co. (Searle). By the early 1990s, the company was turned around and it generated annual sales of about $2.5 million. Candace and Chris were married in 1991. The Pharmaceutical Lifecycle The clinical research process was influenced by government regulations that required drugs to pass through a series of steps before they could be marketed for public use. In the United States, the Food and Drug Administration (FDA) regulated pharmaceuticals. To receive FDA approval, a drug had to meet safety and efficacy standards for a specific indication (medical diagnosis). A drug for hypertension, for example, would have to lower blood pressure by a certain statistically significant amount without  producing unacceptable side effects. The entire FDA approval process could take from 8 to 15 years and involve several thousand patients.1 After a pharmaceutical company discovered a new drug and completed pre-clinical testing on animals in the laboratory, an Investigational New Drug application was filed with the FDA. The drug then passed through three phases of clinical testing on humans. Before beginning each subsequent phase, the drug company had to submit additional regulatory information to the FDA. Phase I Phase I studies were primarily concerned with assessing the drugs safety. This initial phase of testing in humans was done in a small number of healthy volunteers (20 to 100), such as students, who were usually paid for participation. Phase II Once Phase I testing had proven the drug’s safety, Phase II tested its efficacy in a small number of patients (100 to 300) with the medical diagnosis. It was specifically designed to determine the likely effective dose in patients. Phase III In a Phase III study, the drug was tested on a larger patient population (1,000 to 3,000) at multiple clinical sites. The purpose was to provide a more thorough understanding of the drugs effectiveness, benefits, and the range of possible adverse reactions. Most Phase II and Phase III studies were blinded studies in which some patients received the experimental drug, while control groups received a placebo or an already approved drug. Once a Phase III study was successfully completed, a pharmaceutical company requested FDA approval for marketing the drug by filing a New Drug Application, which averaged about 100,000 pages. †¢ 200-033 Phase IV Post-marketing testing (of at least 300 patients per trial) was sometimes conducted for high-risk drugs to catch serious side effects (liver toxicity) and monitor them for long-term effectiveness and cost-effectiveness. The pharmaceutical companies traditionally designed and conducted their own clinical trials. They selected the research sites and recruited investigators to conduct the trials of the new drug. Investigators were often medical school professors at teaching hospitals, but they could also be professional investigators who conducted clinical trials at dedicated centers or occasionally regular physicians who ran trials, particularly Phase IV trials, out of their private practices. These investigators then recruited patients, sometimes with the help of the pharmaceutical company, to participate in the study. After patients were recruited, there was a considerable amount of data collection by the investigators, monitoring of the process and data retrieval by the pharmaceutical company, and analysis of the data to determine whether the statistical criteria for safety and efficacy were met. Finally, there was the complicated process of compiling the data and preparing the long report for the FDA. The Contract Research Business In the 1970s, large pharmaceutical concerns in the United States began to look for ways to outsource their clinical testing work as their RD budgets grew. At the beginning, contract research was a small cottage industry and the work was awarded on a piecemeal basis. As Chris recalled, â€Å"For years, there had been companies conducting animal testing and Phase I, but there was no one managing the entire research and development process. The acronym ‘CRO’ (contract research organization) did not exist, pharmaceutical companies gave out only small contracts, and did not have much confidence in for-profit research managers.† The growth of the CRO industry was stimulated by pricing pressures on drug companies that led them to try to transfer the fixed costs of clinical research into a variable cost through outsourcing. As Chris described, The general problem that drug companies face is balancing a variable workload with a fixed workforce. The problem is that you don’t know when the guy in the white lab coat will come running down the hall, beaker in hand, shouting, ‘Eureka, I’ve got it, it’s going to cure disease X’. When he does that, you know your workload is going to spike. Your workload is impacted by the rate of discovery, the number of projects killed in vitro and, subsequent to that, how many studies get cancelled due to safety or efficacy problems in human testing. Pure CROs like Kendle derived their income solely from the outsourced portion of the RD budget of pharmaceutical clients. In theory, any part of the clinical testing process could be outsourced. While most pre-clinical discovery was conducted in-house by drug companies, the trend in the 1990s was for CROs to receive contracts to manage the entire clinical research piece, especially 3 Phases II and III. The whole process was an incredible race against time, as every day for which FDA approval was delayed could cost the pharmaceutical client over $1 million in lost revenues. Pharmaceutical contracts ranged in duration from a few months to several years. For multi-year contracts involving clinical trials, a portion of the contract fee was paid at the time the trial was initiated, with the balance of the contract fee payable in installments over the trial duration, as performance-based milestones (investigator recruitment, patient enrollment, delivery of databases) were completed. Contracts were bid by CROs on a fixed-price basis, and the research was a labor-intensive business. The contract bids depended on careful estimation of the hourly labor rates and the number of hours each activity would take. The estimation process involved statistical algorithms, which took into account the length of the study, frequency and length of site visits, the number of sites involved, the number of patients involved, and the number of pages per report form. A premium would be added for more complicated therapeutic testing. As the chief financial officer Tim Mooney described the business, The way that Kendle makes money is like any professional service firm—We focus on maximizing labor utilization, especially at the operational level. We assume a 65% to 70% utilization rate, so profit margins are higher if we have a higher utilization rate of personnel. We have the same assumed profit margin on all levels of people, but we can charge higher rates for contracts where we have specific therapeutic expertise that is in demand. Margins can also be higher on some large projects when we can share overhead costs across more sites. The business of contract research entailed several types of business risk. With contracts running at an average of $1 million for companies of Kendle’s size, client dependence was a major risk. Project cancellation by the client and â€Å"change orders† to reduce project costs were also increasingly frequent in the CRO industry, as healthcare cost pressures intensified. On the other hand, product liability for medical risks was borne by the pharmaceutical company. Competition in the 1990s By the mid-1990s, contract research had evolved into a full-service industry, recognized by both the pharmaceutical/biotech industries and the financial community. In 1995, worldwide spending on RD by pharmaceutical and biotechnology companies was estimated at $35 billion, with $22 billion spent on the type of drug development work that CROs could do. Of the $22 billion, only $4.6 billion was outsourced to CROs in 1995. While RD spending by pharmaceutical companies was growing at 10% a year, CROs were growing at twice that rate.2 Specialized CROs could manage increasingly complex drug trials—in the previous decade, the number of procedures per trial and average number of patients per trial had doubled—far more efficiently than their pharmaceutical clients.3 Kendle participated in this growth in clinical research. Its net revenues grew 425% from $2.5 million in 1992 to $13 million in 1996. From a loss of $495,000 in 1992, its net income rose to $1.1 million by 1996. By 1996, Kendle had conducted clinical trials for 12 of the world’s 20 largest pharmaceutical companies. Kendle’s three largest clients were G.D. Searle, Procter Gamble, and Amgen, which generated 48%, 19%, and 13% of Kendles 1996 revenues, respectively. (See Exhibits 1 and 2 for Kendle’s income statements and balance sheets.) 2 J.C. Bradford Co., analyst report, January 15, 1998, pp. 5-6. 3 The Economist, â€Å"Survey of the Pharmaceutical Industry,† February 21, 1998, p. 4.200-033 The contract research industry was very fragmented, with hundreds of CROs worldwide. In the 1990s, in response to the increased outsourcing of pharmaceutical RD, and a demand for global trials, consolidation among the CROs began. A few key players emerged and went public, creating a new industry for Wall Street to watch. Many CRO start-ups were founded by former drug company executives who decided to form their own operations. After a period of internal growth, some of the start-ups began growing through a financial â€Å"roll-up† strategy. An industry publication listed 18 top players in North America, with total contract research revenues of $1.7 billion. The top five public companies, ranked by 1996 revenues, were Quintiles Transnational Corp. ($537.6 million), Covance Inc. ($494.8 million), Pharmaceutical Product Development Inc ($152.3 million), ClinTrials Research Inc. ($93.5 million), and Parexel International Corp. ($88 million).4 (See Exhibit 3 for recent sales and pr ofit data on CROs.) With its talent pool of scientists at the Research Triangle and U.S. headquarters of the pharmaceutical giants Glaxo and Burroughs Wellcome (later merged as Glaxo Wellcome), the state of North Carolina quickly became the center of the burgeoning CRO industry. Two of the â€Å"big five† companies, Quintiles and Pharmaceutical Product Development, were started there by academic colleagues of Candace’s. Quintiles Transnational was considered to be the †gold standard of the industry.† Quintiles was founded in 1982 by Dennis Gillings, a British biostatistician who had worked at Hoechst and was a professor at the University of North Carolina, where Candace completed her postdoctoral work. After raising $39 million in a 1994 IPO, Quintiles went on an acquisition spree, adding other professional service businesses. For example, the firm provided sales and marketing services to support the launch of new drug products. By the end of 1996, Quintiles was the worldâ€⠄¢s largest CRO, with 7,000 employees in 56 offices in 20 countries. A typical clinical study managed by Quintiles was conducted at 160 sites in 12 countries, involving 10,000 patients. Quintiles was more diversified than many of its CRO competitors, with about 65% of revenues derived from the  core CRO business and 35% from other services.5 Pharmaceutical Product Development (PPD) was founded in 1989 by Fred Eshelman, a colleague of Candace’s from the postdoctoral program in pharmacy. Like the founder of Quintiles, Eshelman had worked in drug research for several pharmaceutical firms, including Glaxo and Beecham. PPD’s revenues jumped 500% between 1990 and 1994, based on such work as multi-year contracts for AIDS research for the National Institutes of Health. PPD conducted a successful IPO in March 1996, with its stock jumping from $18 per share to $25.50 per share on the first day of trading. PPD bought a U.K. Phase I facility in November 1995, and in September 19 96 merged with another leading CRO. Their combined net revenues exceeded $200 million. Kendle at the Crossroads To Candace and Chris, it was clear that certain competitive capabilities were necessary for companies of Kendle’s size to compete successfully with the major CROs: therapeutic expertise (in specific medical areas) broad range of services (pharmaceutical companies wanted to work with fewer CROs, with each offering a wide range of services across multiple phases of the RD process); integrated clinical data management (the ability to efficiently collect, edit and analyze data from thousands of patients with various clinical conditions from many geographically dispersed sites); 4 â€Å"Annual Report: Leading CROs,† RD Directions, September 1997, pp. 28+. 5 William Blair Co. LLC analyst report, Quintiles Transnational Corp., June 20, 1997, p. 3. international, multi-jurisdictional presence (to speed up drug approval, tests were being launched in several countries at once); With the exception of international presence, Candace and Chris felt comfortable with their ability to meet these criteria. Kendle’s staff had scientific expertise in multiple therapeutic areas, including cardiovascular, central nervous system, gastrointestinal, immunology, oncology, respiratory, skeletal disease and inflammation. The company also had broad capabilities, including management of studies in Phases II through Phase IV. It did not consider the absence of Phase I capabilities to be an issue, since this activity was quite separate. (See Exhibit 4 for a comparison of CRO geographical locations.) To build an integrated clinical data management capability, Chris had directed the development of TrialWare ®, a proprietary software system that allowed global data collection and processing and the integration of clinical data with clients’ in-house data management systems. TrialWare ® consisted of several modules including a database management system that greatly reduced study start-up costs and time by standardizing database design and utilizing scanned image technology to facilitate the design of data entry screens, the point-and-click application of edits from a pre-programmed library, and workflow management (parallel processing). Other modules included a system that coded medical history, medication and adverse event data and a touch-tone telephone system that was used for patient  randomization, just-in-time drug supply and collection of real-time enrollment data. Against the backdrop of a changing industry, Candace and Chris felt the need to develop additional business skills and focus Kendle’s strategy. To clarify their management roles, Candace and Chris switched their existing responsibilities. Chris pointed out, â€Å"Candace became CEO as we realized that her focus was long-range and I took over as Chief Operating Officer to focus on the short-range. In addition, the marketing strength of our competitors was propelling them further and further ahead of Kendle. Candace brought her science background and entrepreneurial skills, while I brought my management. The problem was that we were relatively weak in sales and marketing.† To broaden their skills, Candace went off in 1991 to the Owner/President Management Program (OPM), an executive education program run by Harvard Business School for three weeks a year over three years. Chris followed her to OPM in 1994. After completing the OPM program, Candace assessed the situation, We have to be big enough relative to our competitors to take on large, international projects. When Searle was looking for CROs for international work, all we could do was possibly subcontract it out to small shops. In contrast, Quintiles had six overseas offices of its own. Furthermore, when Searle calls and says, ‘I just got off the phone, Quintiles will cut their price by a million dollars,’ if you’re too small, you’re not going to be able to respond to that. Candace and Chris realized that Kendle could not grow fast enough internally to keep up with its peers and did not have the cash for acquisitions. They entertained the thought of selling Kendle, and were approached several times about a sale. But by nature, they were a competitive, athletic couple. Chris got up to play squash every morning at 7 AM, and Candace was an avid rower, recently winning a gold medal in a Cincinnati regatta. Perhaps not surprisingly, Candace and Chris decided to grow the firm and take it public rather than sell. As Candace described their motivation, â€Å"We were not driven to be a public company as such, but primarily to be bigger, and for this, we  needed public financing to succeed in the new competitive landscape. The whole target was not to let the big guys get too far out ahead of us.† Preparations for Growth By 1994, Kendle had grown to $4.4 million in revenues. Candace, the driving force throughout the IPO process, sought advice from an old college friend, a well-known Cincinnati businessman. He advised her, â€Å"before you go public, practice being a public company.† Candace therefore formulated a plan for Kendle to go public in 1999. Kendle began hiring key managers to build up functional units. Between 1994 and February 1997, new directors of clinical data management, information technology, biostatistics, finance, mergers and acquisitions, regulatory affairs, and human resources were hired. As Chris described, â€Å"the plan was to put this infrastructure in place to look and act like a public company— communications, IT, finance. The idea was hire at the top and they’ll fill in their organization.† Many of these new managers had previously worked together at other companies. To prepare for Wall Street scrutiny, Kendle began issuing internal quarterly fi nancial statements and sharing them with employees in an open-book management style. Candace and Chris tried to make the growing number of employees feel like â€Å"part of the family† in other ways, too. The Kendle â€Å"photo gallery† displayed professional portraits of employees with their favorite hobbies. In 1995 Chris led the development of a corporate mission statement and a document on strategic plans that was shared with all employees. Kendle was organized in a matrix fashion (see Exhibit 5 for organizational chart). Each department was treated as a strategic business unit (SBU) with a director who established standards and carried profit responsibility. At the same time, each research contract was managed by a project manager who assembled a team from across the various SBUs. Clinical trials involved five functional SBUs at Kendle: 1. Regulatory Affairs recruited investigators, helped them with FDA registration forms, and obtained approval from ethics boards. Regulatory Affairs maintained a database of 5,000 investigators. 2. Clinical Monitoring sent clinical research associates (CRA) out to the testing sites (every 4 to 6 weeks) to enforce Good Clinical Practice regulations. The CRAs were typically young, single health care professionals who spent a significant amount of their time on the road. The CRA would collect data from investigators, resolve queries generated by Clinical Data Management, and promote patient enrollment. 3. Clinical Data Management produced a â€Å"locked† database that could be submitted to the FDA. Data from case report forms were input into a computer system and â€Å"cleaned† through a manual review of the forms and an automated check of the databases. The challenge was to lock a database quickly while maintaining data quality. 4. Biostatistics would â€Å"unblind† the locked database and analyze it to determine if the data confirmed that the test results met the criteria for safety and efficacy. Biostatistics also defined the scope of new studies. 5. Medical Writing generated â€Å"the truckload of paper submitted to the FDA† for a New Drug Application, including a statistical analysis, a clinical assessment, preclinical and clinical data, a description of the manufacturing process, and the supporting patient documentation. 1996: The Celebrexâ„ ¢ Study, Filing Preparations, and European acquisitions 1996 was a busy year for Candace, Chris, and Kendle’s new management team. They simultaneously began conducting a major drug study, working with underwriters on IPO preparations, and looking for overseas acquisition targets. In 1996 Kendle managed 62 clinical studies at 4,100 sites involving approximately 20,000 patients. Celebrexâ„ ¢ Study In January 1996, Kendle began working on a major drug called Celebrexâ„ ¢ (celecoxib). Its client Searle was engaged in a neck-and-neck race with Merck, the largest U.S. drug company, to be the first to market a COX-2 inhibitor. A COX-2 inhibitor was a new type of anti-inflammatory drug that promised low incidence of bleeding ulcers in long-term, high-dosage users such as arthritis patients. The Searle-Merck race was closely followed in the business press. Searle awarded the international portion of the Celebrexâ„ ¢ contract to another CRO, since Kendle only had facilities for testing in the United States. However, Kendle did win the contract to conduct all the U.S. Phase II and III trials. The Celebrexâ„ ¢ contract was a â€Å"huge feather in our cap,† recalled the chief financial officer. â€Å"In order to beat Merck, we worked very hard and kept compressing the timelines.† To head the Celebrexâ„ ¢ project, Kendle hired Bill Sietsema, PhD, as assistant director of clinical research. A therapeutic expert in skeletal diseases and inflammation, Sietsema had worked at Proctor Gamble for 12 years. While Sietsema served as overall program director, Chris acted as the operational project manager, meeting with his Searle counterpart in Chicago on a monthly basis. In early 1997, Kendle also set up a new regional office in Chicago, close to Searle headquarters. For Kendle, the Celebrexâ„ ¢ project was a chance to â€Å"show what we could do and to develop a reputation as a leader in the field of skeletal disease and inflammation.† Kendle actively helped investigators recruit arthritis patients, running television advertisements, directing interested volunteers to a call center. Three hundred  investigators enrolled over 10,000 patients, producing over one million pages of case report forms. Most importantly, through close integration of information systems with Searle, Kendle was able to beat an industry standard. Instead of taking the typical six months to one year, the time span between the last patient in Phase II and the first in Phase III, which began in June 1996, was only 22 days. Preparation for SEC Filing By the time the Celebrexâ„ ¢ program rolled around, Candace and Chris felt that they might have to go public earlier than intended because of the competitive landscape. The new chief financial officer, Tim Mooney, took a leading role in the preparations. Prior to joining Kendle in May 1996, Mooney had worked as CFO at The Future Now, Inc., a computer reseller and Hook-SupeRx, a retail drugstore chain. At Kendle, Mooney replaced the controller with an audit manager from Coopers Lybrand to beef up his staff. Mooney also led the building of many of the other financially related departments at Kendle. To act as the lead underwriters on the IPO, in August 1996 Mooney chose two regional investment banks, Chicago-based William Blair Company, L.L.C., which had handled the 1995 IPO of Kendle’s competitor Parexel, and Wessels, Arnold Henderson from Minneapolis. William Blair began putting Kendle through the paces of preparing to file a preliminary prospectus with the U.S. Securities and Exchange Commission (SEC). The process of going public generally took from 60 to 180 days. One of the key steps in the process was the conversion of Kendle from a subchapter corporation to a C corporation at the time of the IPO. (Subchapter S corporations were entities with 35 or fewer shareholders that were treated like partnerships for tax purposes. Corporate income tax was passed through tax-free to the owners who then paid personal income taxes due.) U-Gene In October 1996 Mooney hired Tony Forcellini, a former colleague, as director of mergers and acquisitions (MA). Tony had worked at Arthur Andersen in the tax department, and then as a treasurer at Hook-SupeRx with Mooney. The search for European acquisition targets was mainly conducted by Candace and Tony Forcellini, with back-up support by Tim Mooney and Chris. All the while, Chris and Bill Sietsema were working away on the Celebrexâ„ ¢ program. Forcellini’s first decision was easy—whether to pursue an offering memorandum that landed on his desk shortly after he arrived. The company for sale was U-Gene Research B.V. (U-Gene), a CRO based in Utrecht, the Netherlands. U-Gene was represented by Technomark Consulting Services Ltd. (Technomark), a London-based consulting firm uniquely specializing in the healthcare industry. Technomark had an extensive database on European CROs and was primarily in the business of matching its pharmaceutical company clients’ trial s with appropriate European CROs, but it also had a small investment banking division. U-Gene, a full-service CRO, was an attractive target for Kendle. The venture capitalist owners were actively looking for buyers. With a 38-bed Phase I facility in Utrecht and regional offices in the United Kingdom and Italy, U-Gene could increase both Kendle’s service offering and geographic presence. Since its founding in 1986, U-Gene had served more than 100 clients, including 19 of the worlds largest pharmaceutical companies. In 1996, U-Gene participated in 115 studies at approximately 500 sites involving approximately 4,700 patients and recorded net revenues of $12.5 million, a 37% increase over the prior year, and operating profit of $1.3 million, a 47% increase over the prior year. Because of its U.K. and Italian offices, U-Gene viewed itself as on the way to becoming a pan-European CRO.  (See Exhibit 6 for U-Gene financial statements.) With momentum building, in November 1996, Forcellini seized upon U-Gene as Kendle’s possible entry into Europe and submitted a bid, offering cash and private stock. Unfortunately, Kendle lost out on this bid to a competitor, Collaborative Clinical Research, Inc, as U-Gene’s owners either wanted a full cash deal or stock from a public company. Collaborative was a competitor slightly larger than Kendle ($25.7 million in revenues) that had gone public in June 1996 and had established a software partnership with IBM. Although it had access to investigators outside the United States, Collaborative also viewed U-Gene as the establishment of a European presence. On February 12, 1997 Collaborative announced that it had signed a letter of intent to acquire U-Gene in exchange for 1.75 million newly issued shares. While this put Kendle out of the picture, the prospects of a deal were not completely killed. On the same day, February 12, 1997, Collaborative also announced that its first-quarter 1997 earnings would be significantly below expectations. On the next day, on analyst speculation that a major client contract had been lost, their stock fell by 27.3%, closing at $9.00.6 This put Collaborative’s UGene deal in jeopardy. Underwriter Concerns About two weeks after Collaborative’s announcement, on February 25, 1997, another CRO, ClinTrials, also suffered a drop in stock price. ClinTrials’ stock lost more than half its market value,  dropping 59%, to $9.50 per share. The fall began when an analyst from Wessels Arnold downgraded the ClinTrials stock to â€Å"hold† from â€Å"buy,† citing a number of key management departures, and continued after ClinTrials announced that its first-quarter earnings would be half its year-earlier profit. The reason for the unexpected earnings decline was the cancellation of five projects totaling $37 million, with the possibility of even lower earnings due to an unresolved project dispute with a client.7 ClinTrials’ negative performance began to affect other CRO stocks, including that of Quintiles.8 With client concentration an issue in ClinTrials’ stock performance, William Blair developed doubts about the timing of Kendle’s IPO. Although Kendle was close to filing its preliminary prospectus, on the day after ClinTrial’s stock dropped, William Blair analysts had a meeting with Kendle’s management and told them that they had decided to withdraw as lead underwriters in the IPO. Candace was resolved to keep going. She said, â€Å"There’s no way out of the concentration issue. We can’t buy our way out of it, because we can’t do MA deals until we have a public currency, and every day Searle is bringing us more work, we won’t tell them no.† She then asked Mooney to find new investment bankers, and he thought, â€Å"what am I going to do now?† Hoping for a lead, Mooney called up a former security analyst from Wessels Arnold who had gone to work at Lehman Bros. Although Kendle was smaller than Lehman’s usual clients, Lehman agreed to underwrite Kendle’s IPO, with the reassurance that â€Å"we think we can sell through the client concentration issue.† After an agreement with New York-based Lehman was reached, Mooney searched for a regional firm because, as he decided, â€Å"I didn’t want two New York-size egos. J.C. Bradford, based in Nashville, Tennessee, had a good reputation in the industry, and struck us as a nice regional bank. They were more retail-oriented than institutional-oriented, so they wouldn’t directly be competing with Lehman in types of clientele.† Bradford had managed the IPO of the first large CRO to go public (ClinTrials, in 1993) and Lehman had led the IPO of PPD in January 1996. Gmi and U-Gene revisited At the same time, Forcellini was moving ahead on the acquisition search. In January 1997 he tasked Technomark with using its CRO database to generate a list of possible European acquisition targets that met the following criteria: â€Å"ideally a CRO with United Kingdom headquarters; $5 million to $7 million in revenues; no Searle business; certain types of therapeutic expertise; strong in phases II through IV; and certain country locations.† The initial list had 50 European CROs, which Kendle narrowed down to 14 prospects. Technomark then contacted these 14 prospects to sound out their willingness to sell, bringing the number down to five candidates: three CROs in Germany, two in the United Kingdom, and one in the Netherlands (not U-Gene). To assess the prospects, Kendle used information from Technomark on comparable MA deals. Candace and Tony Forcellini then traveled around Europe for a week visiting the five companies. They decided to further pursue two companies: a small, 15-person monitoring organization in the United Kingdom and one in Germany. The U.K. prospect was quickly discarded because of an aggressive asking price and accounting problems. Kendle then moved on to the German target, a company named gmi. Its full name was GMI Gesellschaft fur Angewandte Mathematik und Informatik mbH. Founded in 1983, gmi provided a full range of Phase II to IV services. gmi had conducted trials in Austria, the United Kingdom, Switzerland and France, among other countries, and had experience in health economic studies and 7 â€Å"ClinTrials Predicts Sharply Lower Profit: Shares Plunge 59%†, The Wall Street Journal, February 26, 1997, p. B3. 8 David Ranii, â€Å"Investors avoiding Quintiles,† The News Observer, Raleigh, NC, February 27, 1997, p. C8. professional training programs. In 1996, gmi participated in 119 studies at multiple sites and recorded net revenues of $7 million, a 32% increase over the prior year, and operating profit of $1.4 million, a 16% increase over the prior year. At March 31, 1997, gmis backlog was approximately $9.6 million. gmi considered itself to be especially good at Phase III trials. (See Exhibit 7 for gmi financial statements.) While Candace and Forcellini were narrowing down European targets, Mooney was hunting for cash. In February 1997 Kendle met at a special lunch with its existing bankers, Star Bank (later renamed Firstar), in Cincinnati. Mooney recalled the conversation vividly: â€Å"After Candace and Chris described their plans, Star Bank’s CEO made a proposal, ‘If you keep Kendle a private company and avoid the hassles of being public, we’ll lend you the money you need for acquisitions.’† With the financing in hand, Candace and Forcellini visited gmi in Munich. While gmi’s owners were willing to talk, they did not have much interest in selling. As Mooney described it, â€Å"gmi was a classic case of having grown to a certain size, had a comfortable level of income, but weren’t interested in putting in the professional systems to grow beyond that level.† After several conversations in March, it was not clear that Kendle and gmi’s owners w ould be able to reach a mutually agreeable price. At this point in early April 1997, the possibility of U-Gene as an acquisition candidate heated up. After the U-Gene deal with Collaborative Research began to collapse, Kendle had initiated a carefully structured inquiry about U-Gene’s interest in renewed discussions. This inquiry led to further discussions and a request in April for Kendle to meet in Frankfurt to try to reach an agreement. With the gmi deal in doubt, Kendle agreed to try to reach closure with U-Gene. After some discussion, both sides agreed on a price of 30 million Dutch guilders, or about US$15.6 million, $14 million of which would be paid in cash, and the remaining $1.6 million would be in the form of a promissory note payable to the selling shareholders.  U-Gene wanted to complete the transaction within the next several weeks, so it would have to be financed at least initially by borrowings. Even if Kendle went ahead with an IPO, the equity financing would not be completed until the end of the summer. Discussions with gmi continued through this period since Kendle was confident about its ability to obtain financing from Star Bank. Ultimately, Kendle’s team was able to agree upon a price with gmi. The owners were willing to accept a price of 19.5 million Deutsche marks, or about US$12.3 million, with at least $9.5 million in cash. They would accept shares for the remaining $2.8 million, if Kendle successfully completed an IPO. The owners were willing to hold off the deal until the IPO issue was resolved. Closing the Deals and IPO Decision To complete both the U-Gene and gmi deals, Kendle would need to borrow about $25 million to $28 million, so financing became critical. Mooney went back to Star Bank to take the bankers up on their promise. He described their reaction: â€Å"Star Bank said they couldn’t lend $28 million to a company that only has $1 million in equity. Nobody did that. They might be willing to finance one acquisition, with the help of other banks, but there was no way that they would provide $28 million.† Mooney was quite angry, but had no choice but to look for other sources of financing. He first tried to get bridge financing from Lehman and Bradford, but they refused, saying that they had â€Å"gotten killed on such deals in the 1980s.† There was also a possibility of financing from First Chicago Bank, but this did not materialize. Finally, in late April 1997, Mooney contacted NationsBank, N.A., which was headquartered in Charlotte, North Carolina and provided banking services to the CRO industry. Nationsbank expressed interest, but only in a large deal. Even $28 million was a small amount to Nationsbank. In 11  a few short weeks, Nationsbank ended up structuring a $30 million credit for Kendle, consisting of a $20 million, three-year revolving credit line and $10 million in five-year, subordinated notes. The interest rate on the credit line was tied to a money market base rate plus 0.50% (currently totaling 6.2%), and the subordinated debt carried a 12% rate. †So NationsBank stepped up in a pretty big way. They could have ended up with Kendle as a private company, with $30 million in debt.† Because of the risk, Nationsbank would also take warrants giving the bank the right to purchase 4% of Kendle’s equity, or up to 10% if the IPO was delayed and Kendle had to borrow the full amount to do both acquisitions. Lehman Brothers was confident about an IPO. The underwriters felt Kendle could raise $39 million to $40 million at a price between $12 and $14 per share, and that Candace and Chris could sell some of their shares as well. Premier Research Worldwide Ltd., a CRO with $15.2 million in 1996 revenues, had raised $46.75 million from its recent IPO in February 1997. Kendle felt they had a much better track record than Premier. Kendle now faced some difficult decisions. It could do the full program, including both acquisitions, taking the $30 million Nationsbank deal, and planning for an IPO in late summer. The successful acquisitions of gmi and U-Gene would establish Kendle as the sixth largest CRO in Europe, based on total revenues, and one of only four large CROs able to offer clients the full range of Phase I through Phase IV clinical trials in Europe. The pricing on the two acquisitions of 8 to 10 times EBITDA seemed in line with recent CRO deals (see Exhibit 8). And, once the IPO was completed, Kendle would have both a cash cushion and stock as a currency to help finance future growth and acquisitions. Assuming an IPO of 3 million new shares at a price of $13.00, Kendle would have a cash position of about $14 million and no debt in the capital structure. (See Exhibits 9 and 10 for pro forma  income statements and balance sheets showing the impact of the acquisitions and the IPO.) A related issue was how many of their shares Candace and Chris should sell if an IPO were done. Their current thinking was to sell 600,000 shares. Thus, a total of 3.6 million shares would be for sale at the time of the IPO, including a primary offering of 3 million shares and a secondary offering of 600,000 shares. This sale would reduce holdings controlled by Candace and Chris from 3.65 million shares (83.1% of the shares currently outstanding) to 3.05 million shares (43.4% of the new total outstanding). Doing the full IPO and acquisition program, however, was unprecedented among Kendle’s peers. â€Å"Nobody does this combination all at once—an IPO, senior- and sub-debt financing, and MA deals,† as Mooney described the situation. Furthermore, the stock prices of public CROs had been falling since last February (see Exhibits 11 and 12 for stock market valuation and price information). If Kendle bought into the full program and the market crashed or the IPO was unsuccessful, the company would have almost $30 million of debt on its books with a very modest equity base. Perhaps it would be better to do just the U-Gene acquisition and use Star Bank to finance it. After completing this acquisition, it could then pursue the IPO. This approach was safer, but of course Kendle might miss the IPO window and miss the opportunity to acquire the second company. Indeed, instead of discouraging Kendle from doing an IPO, the fall in CRO stock prices might be taken as a signal tha t Kendle should forge ahead before the window closed completely.

Plea-Bargains: Currency of the Courts An Examination of the Effectivene

â€Å"Rahim Jaffer case heads for plea-bargain†; former Alberta MP Rahim Jaffer was being charged on cocaine possession and drunk-driving charges; his case was likely to be resolved with a plea-bargain agreement (Makin, 2010). This is but one case of many that are settled though a plea-bargain agreement. Plea-bargaining can take the form of a sentence reduction, a withdrawal or stay of other charges, or, a promise not proceed on other charges, in exchange for a guilty plea by an accused. During discussion of a potential plea bargain agreement, the Crown Attorney and defence lawyer will look at 4 distinct sections of a plea negotiation: charge discussions, sentence discussions, procedural discussions, and agreements as to the facts of the offence and the narrowing of issues in order to expedite the trial ("Plea bargaining," 2011). According to the Department of Justice, approximately 90% of criminal cases are resolved each year by use of plea-bargaining (â€Å"Findlaw,† 2012). Despite what appears on its face to be rampant use of the plea agreement, plea negotiations are incredibly helpful to our court system. First, plea agreements serve to diminish the overload of cases and avoid lengthy trials, thus avoiding appeals of trial decisions and allowing greater access to the justice system. In turn, a less burdened court system can focus its efforts on the most serious of criminal offences thereby ensuring that such cases are handled in the manner with the greatest likelihood of securing a conviction. Overall, this judicial efficiency results in a cost savings and better allocation of resources. This paper will explore these two main benefits and also discuss potential criticisms of the plea bargain system. Plea-Bargaining has become ... ..., 2012, from http://www.justice.gc.ca/eng/pi/icg-gci/pb4-rpc4.html Plea bargaining. (2011, February 28). Retrieved from http://www.victimsofviolence.on.ca/rev2/index.php?option=com_content&task=view&id=378&Itemid=197 Plea bargaining in canada. (2011). Retrieved from http://www.justice.gc.ca/eng/pi/rs/rep-rap/2002/rr02_5/p3.html Romaniuk, T. (n.d.). Centre for Constitutional Studies - R. v. Askov.Faculty of Law Home - University of Alberta. Retrieved April 19, 2012, from http://www.law.ualberta.ca/centres/ccs/rulings/Ask Tappscott. (2012). street directory. Retrieved from http://www.streetdirectory.com/travel_guide/14026/legal_matters/plea_bargaining_pros_and_cons.html Young, R. (2011, November 16). Cutbacks have some courts dismissing criminal cases. Here & Noe. Retrieved April 19, 2012, from http://www.hereandnow.wbur.org/2011/11/16/budget-cuts-court

Fighting Bacterial Growth

Fighting Bacterial Growth The purpose of this lab was to determine the effectiveness of antiseptics, disinfectants, and antibiotics on bacteria. The hypothesis was that if bleach was used, it would be the most effective because bleach is commonly used to clean and disinfect various things. The variables that were tested were antibacterial soap and Scope mouthwash for the antiseptics; bleach and ammonia for the disinfectant; and Cipro, erythromycin, and tetracycline for the antibiotics.All of these chemicals were used on the bacteria M. luteus. Two Petri dishes were covered in the bacteria and split into four quadrants, in which each had a disc containing one of the chemicals stated above. One quadrant was left alone with no chemicals for the control group. The dishes were then left for the bacteria to grow, and once obtained again it was obvious that some of the bacteria was killed by the chemicals.In individual data, there was a zone of inhibition of 3mm in the antibacterial soap; 1 0mm in the Scope mouthwash; 2mm in the bleach; no zone of inhibition around the ammonia; 10mm in both the erythromycin and the tetracycline, and 15mm for the Cipro. The average length of the halo of inhibition in antiseptics was 8 mm in the E. coli, and 6 mm in the M. luteus. The average length of the halo of inhibition in the disinfectants was 12mm and 11mm respectively. For the antibiotics, it was 7mm and 9mm respectively.The data represented the hypothesis because for both the E. coli and the M. luteus, the largest zone of inhibition was in the disinfectant; and more specifically, the averages were 28mm in the E. coli and 18mm in the M. luteus in the bleach. In some Petri dishes, the bleach also killed bacteria in the other quadrants, indicating that it killed a lot of bacteria. This also affected some measurements for the other chemicals, because the zone of inhibition for the other chemicals around the bleach could have been caused by the bleach instead of the other chemical.An other error was that since these Petri dishes were left out for 2 days, there was re-growth in the bacteria in and around the zones of inhibition, like the ammonia in the individual data. In the lab, the chemicals were tested on bacteria to see how much of the bacteria will get killed. What kind of items then would create the most bacterial growth? If bleach was used on different kinds of bacteria, which kinds of bacteria would be most affected by the bleach, and which bacteria will be the least affected by the bleach?

How to Compete in India Essay

1. The political environment in India has proven to be critical to company performance for both PepsiCo and Coca-Cola India. What specific aspects of the political environment have played key roles? Could these effects have been anticipated prior to market entry? If not, could developments in the political arena have been handled better by each company? 2. Timing of entry into the Indian market brought different results for PepsiCo and Coca-Cola India. What benefits or disadvantages accrued as a result of earlier or later market entry? 3. The Indian market is enormous in terms of population and geography. How have the two companies responded to the sheer scale of operations in India in terms of product policies, promotional activities, pricing policies, and distribution arrangements? 4. â€Å"Global localization† (glocalization) is a policy that both companies have implemented successfully. Give examples for each company from the case. 5. How can Pepsi and Coke confront the issues of water use in the manufacture of their products? How can they defuse further boycotts or demonstrations against their products? How effective are activist groups like the one that launched the campaign in California? Should Coke address the group directly or just let the furor subside? 6. Which of the two companies do you think has better long term prospects for success in India? 7. What lessons can each company draw from its Indian experience as it contemplates entry into other Big Emerging Markets? 8. Comment on the decision of both Pepsi and Coke to enter the bottled water market instead of continuing to focus on their core products—carbonated beverages and cola-based drinks in particular.

The Emotional and Cultural Conflict at the Personal Level essays

The Emotional and Cultural Conflict at the Personal Level essays Conflict can be defined as a disagreement through which the parties involved perceived a threat to their needs, interests and concerns. It occurs when people perceive that consequence of a disagreement. Emotional are the feeling experienced in conflict, ranging from anger and fear to despair and confusion. (Academic Leadership Support) When emotional and cultural conflicts occur at the personal level, it can give a great impact of inconsistency at the political, cultural and social levels in the country. In referring to this statement, this paper is going to discuss about the disintegration of individualism, are there any conflict in the characters and are they portrayed as inconsistence, restless and unsettle? And how is this kind of portrayal can suggest to the inconsistencies at the political, cultural and social levels in the country? This writing will not be able to achieve its objective in discussing the issues mentioned without any evidence taken from any short stories or poems. Therefore, in a way to provide clear examples to the analysis, two short stories are selected. The first one is The Tamarind Tree, written by Saffura Chinniah and the other is Ibrahim Something by Lee Kok Liang. Both these short stories have been identified to have emotional and cultural conflicts and it will be discussed further. The concern or the issue that is relevance for discussion is the issue of is there a conflict in the characters and are they portrayed as inconsistence, restless and unsettled? In the first short story, The Tamarind Tree, the major concern of discussion is about the main character, Uncle Das. He lives in a housing area, Is he portrayed as inconsistence, restless and unsettle? From his neighbours perspective, he is like other man. He has a wife, a child, a paid-up three bedroom house and on a decent pension. (pg. 38) He does not seem to have a c...

Analysing Of The Riba Work Stages

Analysing Of The Riba Work Stages On each of the initial work stages of a project the architect is involved in many ways and uses many skills. Before the architect begins any work they must be appointed under the RIBA concise conditions agreement or SW 99. The following is a brief outline of what an architect does in a RIBA standard agreement between architect and client. The first two RIBA work stages come under term ‘Preparation’ in the ‘RIBA, Outline Plan of Work 2007’. The first stage is stage A, ‘Appraisal’; this mainly involves establishing the needs of the client. Three main tasks are carried out. Throughout the initial stages of the project constant communication between the architect and client takes place. Firstly, the architect must carry out studies to determine the feasibility of the Client’s requirements. The architect may also review the alternative design and construction approaches and the cost implications of each with the client. At this stage the arch itect may also provide information for reports on the cost implications. During stage B (Design Brief) the initial ‘Statement of Requirements’ is developed into the ‘Design Brief’. Although this is the responsibility of the client the architect often contributes to its development additionally. Stages C, D and E come under the heading ‘Design’. This begins with Stage C (Concept), where the architect would usually be required to prepare outline proposals for things, such as, the building structure and building services. The architects also develop concept designs for project. Throughout this stage the architect will be leasing with other members of the team, such as, engineers, quantity surveyors and planning supervisors. This communication helps the architect to provide the client with information on approximate construction costs and cost planning which must then be assessed by the client in the stage report. Stage D (Design Development) invol ves the completion of the project brief and the further development of the concept designs. At this stage a cost estimate, or information for a cost estimate, must be provided and the architect will be working closely with statutory planning authorities, for instance, local planning departments. The architect must also prepare a detailed planning application, including drawings and an ‘Access and Design Statement’. At the end of stage D the architect must obtain signed approval by the client of a stage D report (this is broadly outlined in Task 3). The Shirebrook Academy has just seen the completion of this stage and has now been submitted to planning. b) Involvement by the architectural technologist in the science and technology of the building, rather than the creative and artistic side, is the main difference between the work of the architect and the architectural technologist. Many of the tasks undertaken overlap with the work of the architect and a strong collabora tion exists. For example, when working on stages C and D both architect and architectural technologist may work together on developing the project brief and design programme, each contributing specific skills to the project. The architectural technologist may contribute by evaluating and advising upon environmental strategies and material specification, while the architect may work on spatial relationships and movement path diagrams.

Week 4 research paper Essay Example | Topics and Well Written Essays - 2000 words

Week 4 research paper - Essay Example Studies also found out that learning support system in companies is weakened and experts suggest that it should be enhanced to cater the new skills required by the emerging jobs offered. Also jobs are impossible to be gone as resignation and employees get redundant in firms. Probably the job mismatch is the problem that makes other people unemployed while the firms continue to look for replacements to fill-in the vacancies for months. As a solution, other companies tap the Internet and computer to outsource their works despite of geographical limitations as it offers cost-effective ways on doing the tasks for both the employers and workers. Employment has always been the common way for people to earn income to sustain the needs of their own and their families. They work in exchange for money and other forms of remuneration wherein the rate of salary is on a per-hour basis. It started in the Industrial Age where the factories were very popular and the prevailing trend was equal pay for equal work. In the economy of today, the same trend seems to be declining and problems arise. As globalization started and continue to progress from the late twentieth towards the twenty-first century, various changes occurred in the way people work and conduct businesses. Various perspectives have been used to study, identify and analyze the situations to come into terms on how to deal with the arising problems. It is about management, but it seems to be many things must be managed and it is not only about control. Perhaps the past principles in management and leadership may still be applied for the present conditions, but new theories, perspectives and improvements must be done to further understand and cope up with the fast pacing of the world today. People are caught in the confusion as knowledge and skills advance so quickly that the