CORPORATE GOVERNANCE

BSAF-6

(Case Base Presentation)

GROUP MEMBERS

IQRA JAVAID
(171067)
ABDUL REHMAN (160112)
 AN ANGLE INVESTOR WITH AN AGENDA

INTRODUCTION: LINE OF ACTION:

 A group of day care centers for the elderly  Entrepreneurial businesses tend to represent a
"Calidad de Vida" has received a staggering relatively greater sense of ownership.
€3 million investment offer from a renowned
health care entrepreneur.
 Calidad de Vida

1) Industry Specifications
2) Franchising
3) Values
4) Innovation Orientation
5) Control Structure & Growth Opportunities
SWOT ANALYSIS
ORGANIZATIONAL STRUCTURE
 Gloria Londono
Quit her job as an
occupational therapist to
enroll in a health care
management program a .
Now she managed the
business of Calidad di vida a
group of day care centers for
elder people.
 Present Opportunity for Gloria
To gain a greater degree of control over her current
business by shifting the balance of power away from
the franchises. As a result, the business would become
more oriented towards the original ideas of innovation
and non-traditionalism
Business Deal between Victor and Gloria

 Victor is ready to invest in Calidad de Vida. Three million euros .

From that money enable the Gloria to open 10 new centers next
year, not through franchising, but under her direct ownership and
control. In return, Victor would want a 25% stake, a board seat a
vote on all strategic decisions, and the ability to liquidate victor
position in five years, should choose, through either a public
offering or a sale these are victor terms and condition to invest in
the business.
 PROPOSED SOLUTION?

 Negotiation with Victor

We can offer the 25% stake to Victor with respect to certain time
periods and the achivement of certain business goals. And not sell the
shares to public.
REDUCING FRANCHISES
The cash flows from the franchises could be utilized to boost the
capabilities of franchises that are actually performing well.sale of non-
performing
Gloria should accept the offer

 Gloria has good reason to accept Victor’s offer. She open 10 additional day care centres
over the next year in Spain and in abroad. Her company, however, is capital-constrained.
She owns only one of 12 existing centers. 11 franchises just provide 5% in royalties.
 . Fund-raising may be equally difficult for gloria if she do not accept victor offer.
Victor contribution add value to company

 Victor brings important intangibles to the table, including reputation and connections,
which are highly valued in conservative European societies. Gloria may hesitate to
change the board’s composition, but Victor’s broader business experience could prove
very useful. A well-positioned investor, furthermore, can facilitate both access to
additional capital .
Things Gloria should look after making the
deal

Gloria will need to examine the business and legal implications of Victor’s proposed deal.
She must also evaluate whether the members of her staff have enough resources and an
adequate infrastructure to support expansion while still executing current operations
effectively. Finally, Gloria will have to develop a strategic vision for collaboration between
the wholly owned centers and the franchise locations, with the aim of meeting the company’s
long-term financial goals.