ML_Applied Concepts Paper

7/29/2019 ML_Applied Concepts Paper

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MAN 4720-017 AND 4720-018: GLOBAL STRATEGY AND POLICY

Prepared for: Professor Harry Schwartz

Applied Concepts Paper

Module D

Chapter 6 Strategy Formulation: Situation Analysis and Business Strategy

Chapter 7 Strategy Formulation: Corporate Strategy

Chapter 8 Strategy Formulation: Functional strategy and Strategic Choice

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10/25/2012


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Table of Contents

Executive Summary ...........................................................................................3

Abstracts ..........................................................................................................4-5

Concepts ..........................................................................................................6-7

Analysis ............................................................................................................8-10

Conclusion ........................................................................................................10

Appendices .......................................................................................................11-21

References .............................................................................................11

Articles ...................................................................................................12-21


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Executive Summary

The purpose of this paper is to help me to fully understand and expand my knowledge

of the concepts four in our textbook. By performing research about recent business

world activities, I will be able to link the terms learned in the lecture in order to get the

full picture. Although I chose terms that are found in both chapter 6 and chapter 7,

most of my terms come from chapter 7, which talks about corporate strategy. Our

textbookStrategic Management and Business Policytextbook by Thomas L. Wheelen

and J. David Hunger is a great source of information for anyone interested in learning

more about business. According to our textbook, the three key issues that corporate

strategy deals with are:

1. Directional Strategy - The firms overall orientation toward growth, stability, or

retrenchment.

2. Portfolio analysis - The industries or markets in which the firm competes through

its products and business units.

3. Parenting strategy - The manner in which management coordinates activities and

transfers resources and cultivates capabilities among product lines and business

units.

From the readings, I chose the terms that I found most interesting. The concepts that I

chose from my readings are acquisition, joint venture, licensing agreements, long-term

contracts, and strategic alliance. After doing extensive research, I came upon recent

articles that have helped me to understand the book and help me to incorporate the

knowledge that I have gained in this class with the real world. In this paper I fully

explain how the terms learned in the textbook relate to recent articles.


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Abstracts

1. Delphi Automotive closes on FCI unit acquisition, by the Associated Press,

Published on Friday October 26, 2012

This article announces the completion of an acquisition deal that was announced in May

of 2012 by the company Delphi Automotive. This deal was for the acquisition of FCI

motorized vehicles unit, which manufactures auto connection systems. The deal cost

Delphi Automotive 765 million euros ($987.5 million).

Delphi Automotive has its headquarters in Troy, Michigan. It was saved by the United

States Government in 2005. Since then, the company has recuperated; however, it has

done so by decreasing its costs, such as, massive layoffs and downsizing its

manufacturing business. With this merger, Delphi expects to increase its future earnings

gain an approximate $0.24 per share.

2. Clariant AG : Clariant and Wilmar establish Joint Venture for amines and selected

amines derivatives, by Thompson Reuters ONE, Published on Friday, October 26,

2012

This article announces the joint venture between two well established companies:Clariant Ltd. and Wilmar International Limited. Clariant Ltd. is a specialty Chemicals

Company based out of Swtizerland. It is the parent company to over 100 companies

worldwide. As of December 2011, the company had an approximate 22,100 employees.

Clariant specializes in growing its business by partnering or acquiring a variety of firms

that will help the company maintain profitability and create a steady growth. Wilmar

International Limited is a leading competitor in the agribusiness field of Asia. The

company was formed in 1991 and it is based out of Singapore. Some of Wilmarsbusiness activities include, oil palm cultivation, oilseeds crushing, edible oils. In

addition, the article goes into detail of how the companies will both benefit from this

joint venture. Further detail will be discussed later in this paper.


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3. Hyrax Energy and WARF enter into licensing agreement, by Bret Williams,

Published on October 26, 2012.

This article explains the licensing agreement deal between Hyrax Energy and the

Wisconsin Alumni Research Foundation (WARF). This licensing agreement is geared

toward finding alternative fuel choices for consumers. Researchers from both Hyrax

Energy and WARF have already found new technology that can be used to produce

alternative clean fuels and plastic materials.

Furthermore, this licensing agreement allows WARF and Hyrax Energy to commercialize

the new alternative fuel and generate profits not only domestically but also in the global

market in the near future. In addition, the development of this new technology showsthat the economy of the United States can be affected positively with the creation of

new jobs and also with increased consumer demand for clean biofuels.

4. CareFirst BlueCross BlueShield, Healthways Announce Extension of Contract forDisease Management Services Through 2015, by Business Wire, Published onOctober 17, 2012

This article is in regards to the extension of a long-term contract between the

companies CareFirst Blue Cross Blue Shield and Healthways. The companies have been

working together for a few years and they have been serving about 600,000 members.

The extension of this contract signifies that together these two companies are able to

partner to offer their clients better healthcare services and preventative disease

solutions. CareFirst Blue Cross Blue Shield has been in business for 75 years and

Healthways is a company dedicated to create healthier human beings. It also serves

about 40 million customers in four continents.

5. PepsiCo and Suntory Agree to Form Strategic Beverage Alliance in Vietnam, by

Pepsi Co., Published on October 22, 2012

This article discusses the strategic alliance formed by PepsiCo and Suntory Holdings

Limited. This strategic alliance will help PepsiCo increase its business in Vietnam.


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Although both companies have both experienced success in this country, their strategic

alliance will catapult both companies to new heights. PepsiCo will be in charge of

marketing its strong products which include Pepsi-Cola, 7-UP, Sting, Mirinda, Tropicana

Twister, Lipton and Aquafina. At the same time, Suntory will be in charge of bringing its

ability to successfully meet the demands of its Asian customers.

These companies have successfully worked in the past in other countries, such as, the

United States, Japan, and New Zealand. PepsiCo has been able to grow in the

Vietnamese market since entering it in 1994. For Suntory, it is hoping to achieve one of

its long-range plans, which is to expand into Vietnam.

Concepts

1.Acquisition

According to Wheelen and Hunger an acquisition is a growth strategy that occurs when

a company absorbs another (usually smaller) company as an operating subsidiary or

division of the acquiring corporation. Acquisitions usually take place with companies of

different sizes and they can be hostile or friendly. Acquisitions can also be a good way

to grow into an international market. For example, a domestic company can purchase

another company that is already established and operating in a different country. This

benefits the purchasing company by reducing the amount of time and money it needs

to spend on acquiring documentation to enter into such country.

2. Joint Venture

A joint venture is one type of horizontal growth strategy that companies use in order to

penetrate international markets. This usually takes place between a domestic company

and a foreign corporation. Joint ventures are created when companies wish to combine

their resources in order to create new products and/or technologies. Joint ventures can

be made among companies or companies with a government agency. By forming a joint

venture, companies usually save themselves the possibility of expropriation in a new


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country by its government. In addition, a joint venture can also help companies

penetrate countries that do not allow foreign vendors. (Wheelen & Hunger, 2012) .

3. Licensing agreements

A licensing agreement is another growth strategy that companies use in order to

increase their profitability. According to Wheelen, under a licensing agreement, the

licensing firm grants rights to another firm in the host country to produce and/or sell a

certain product. The licensee pays the licensing firm in return for technical expertise.

This strategy is particularly beneficial when the licensing company is well-established

but lacks the resources to enter a new market in a different country.

4. Long-term contracts

According to our textbook, long-term contracts are a type of vertical integration

strategy by the formation of agreements between two firms to provide agreed-upon

goods and services to each other for a specified period of time. In order to be

considered a type of vertical integration, long-term contracts must specify that the

contract is mutually exclusive and that neither firm can enter into the same or a similar

contract with a third party.

5. Strategic Alliance

Long-term cooperative arrangements between two or more independent firms or

business units that engage in business activities for mutual economic gain. In order to

keep up with the continuing growth and demand from consumers, strategic alliances

have become a part of modern business. The length of strategic alliances may vary

from a few months to a few years. Although companies benefit mutually from these

alliances, conflicts often arise over the companies objectives and control issues. This

conflict therefore leads for about 50% of strategic alliances to fail in both domestic and

international markets (Wheelen & Hunger, 2012).


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Analysis

1.Acquisition

In the article Delphi Automotive closes on FCI unit acquisition, I learned how an

actual acquisition takes place in the business world. One company, in this case Delphi

Automotive, which is larger than FCI Group, acquired and completely absorbed FCI

Groups motorized vehicle unit. This friendly takeover will allow Delphi to expand its

global reach and its ability to make electronic connectors for vehicles. In addition, this

acquisition will also help Delphi Automotive increase its earnings per share in the

coming year.

2. Joint Venture

In the article Clariant AG: Clariant and Wilmar establish Joint Venture for amines and

selected amines derivatives, we see an example of a joint venture. From our textbook

we have learned that a joint venture is a type of international entry option for horizontal

growth of a company. Both Clariant and Wilmar are well established companies. With

the formation of this joint venture, they will influence each other with each companys

individual strengths in order to increase their growth opportunites. Furthermore, the

benefits that Clariant will bring to the joint venture are: its Industrial & Consumer

Specialties (ICS) Business Unit's sales activities of relevant amines and defined

derivatives to the joint venture as well as its amines plant in Germany and production

output from its amines plant in Brazil. At the same time, Wilmar will contribute the

venture with the use of its plant in China and also the companys expertise in

oleochemicals and renewable raw materials. The article ends by stating the following:

"Due to its strong roots in Asia combined with plans to expand the businessglobally, Wilmar is an excellent partner for Clariant to support our customer base in all

parts of the world", said Michael Willome, Head of Business Unit ICS.

3. Licensing agreements


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This article explains that the companies Hyrax Energy and WARF have entered into a

licensing agreement. According to our textbook, companies enter into licensing

agreements both domestically and internationally. In this case, the licensing agreement

is domestically. Hyrax is a company that emerged from Department of Energy funded

Great Lakes BioEnergy Research Center (GLBRC) and has now entered into a licensing

agreement with Wisconsin Alumni Research Foundation (WARF) (Hyrax Energy, Inc.,

2012). Hyraxs strategy is to be able to use the latest technologies in order to develop

alternative biofuels. In addition, Hyrax hopes that the licensing agreement helps it

commercialize its biofuels in the United States and with the long term goal of expansion

into the global markets.

4. Long-term contracts

According to the article CareFirst BlueCross BlueShield, Healthways Announce

Extension of Contract for Disease Management Services Through 2015, the companies

mentioned decided to extend their already prosperous long-term contract. This was an

agreement previously made by both firms. This allowed them to provide each

companys goods and services to their customers. This way, the companies are

successful at reaching more customers and providing better services while reducing

their costs. Since the cost of healthcare is rising, the companies are interested in

offering preventative solutions in order to minimize future high healthcare costs.

Although our book states that recently, companies have moved away from long-term

contracts, which is a form of vertical growth strategy, in this case both companies

benefit from having contracts since they offer different services to their customers,

however, such services complement one another. CareFirst BlueCross BlueShield offers

health insurance while Healthways offers its consumers preventative ways to stay

healthy and thus helps keep the costs minimum for CareFirst BlueCross BlueShield .

5. Strategic Alliance


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In the article, PepsiCo and Suntory Agree to Form Strategic Beverage Alliance in

Vietnam, we learn how two successful companies decide to join their resources to form

a strategic alliance in order to gain market share and mutual economic gain. This

strategic alliance will help PepsiCo build on its current position in the Vietnam market,

while utilizing Suntorys strong brands and recognizable ability to cater to the Asian

market. The strategic alliance by these two companies in Vietnam is expected to have a

positive effect for both companies and will help them increase their profits. Alone each

company is already successful; however, together they expect to grow their business

exponentially.

Conclusion

Research and reading the book have taught me to better understand strategies anddifferent techniques that companies use in order to expand their businesses. Companies

are in business to create profits; they do this by thinking outside the box. Through the

articles, I learned that a variety of companies in todays market are constantly

searching for ways to succeed. In addition, they must seek new ventures in order to

enter both domestic and international markets. Where companies choose to join their

competitors in a strategic alliance, or a joint venture, long-term contract, or simply by

signing a licensing agreement, these are good options for companies to try in order to

succeed in the market and avoid a potential acquisition by their biggest competitor.


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Appendix A

References

Associated Press. (2012, October 26). News. Retrieved from Yahoo Finance:

http://finance.yahoo.com/news/delphi-automotive-closes-fci-unit-

123219090.html

Business Wire. (2012, October 17). CareFirst BlueCross BlueShield, Healthways

Announce Extension of Contract for Disease Management Services Through

2015. Rock Hill, South Carolina, Unite States.

Hyrax Energy, Inc. (2012, October 27).About. Retrieved from Hyrax Energy:

http://hyraxenergy.com/

Pepsi Co., I. (2012, October 22). Media - Press Release. Retrieved from Pepsico:

http://www.pepsico.com/PressRelease/PepsiCo-and-Suntory-Agree-to-Form-

Strategic-Beverage-Alliance-in-Vietnam10222012.html

Press Release. (2012, October 26). Clariant AG : Clariant and Wilmar establish Joint

Venture for amines and selected amines derivatives. Muttenz, Singapore.

Wheelen, T., & Hunger, D. (2012). Strategic Management and Business Policy Toward

Global Sustainability. Upper Saddle River, New Jersey: Pearson.

Williams, B. (2012, October 26).Alternative Energy. Retrieved from Hydrogen Fuel

News: http://www.hydrogenfuelnews.com/hyrax-energy-and-warf-enter-into-

licensing-agreement/856496/


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Appendix B

Articles

Articles

Delphi Automotive closes on FCI unit acquisition

Delphi Automotive closes on acquisition of FCI Group's motorized vehicles division

Associated PressFri, Oct 26, 2012 8:32 AM EDT

TROY, Mich. (AP) -- Delphi Automotive has completed its acquisition of FCI Group'smotorized vehicles unit for 765 million euros ($987.5 million).

The deal, which was announced in May, allows Delphi to expand its global reach and itsability to make electronic connectors for vehicles.

The motorized vehicle business of FCI, which is based in the U.K., makes auto connectionsystems. It is owned by affiliates of Bain Capital.

Delphi Automotive PLC, based in Troy, Mich., spun off from General Motors Co. in 1999, wentinto bankruptcy court protection in 2005 and emerged four years later after cutting thousands ofjobs and selling factories and businesses.

The company said Friday that it still expects the transaction to add 24 cents per share to its 2013earnings, excluding acquisition-related costs.
http://www.ap.org/


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Clariant AG : Clariant and Wilmar establish

Joint Venture for amines and selected amines

derivatives* Reuters is not responsible for the content in this press release.

Fri Oct 26, 2012 1:00am EDT

Clariant AG / Clariant AG : Clariant and Wilmar establish Joint Venture for amines and selectedamines derivatives . Processed and transmitted by Thomson Reuters ONE. The issuer is solelyresponsible for the content of this announcement.

50-50 Global Joint Venture

Clariant's Amines Competence meets Wilmar's Oleochemical Expertise

Muttenz / Singapore, October 26, 2012 - Clariant Ltd, a world leader in specialty chemicals, andWilmar International Limited, a leading Asian agribusiness group, have, through their respectivesubsidiaries, signed an agreement to establish a 50-50 joint venture as the global platform forproduction and sales of amines and selected amines derivatives. The joint venture will beheadquartered in Singapore with global sales, distribution and production affiliates. Subject toreceipt of regulatory approvals, including merger clearances, the joint venture is expected to beoperational in spring of 2013. "Wilmar and Clariant will leverage on their companies' individualstrengths to create a global platform with significant growth opportunities. With this first step,

both partners are dedicated to creating a new leading player in the global amine and aminederivatives market. For Clariant it is also an important next move on our way to furtheroptimizing our portfolio", said Clariant CEO Hariolf Kottmann. "This collaboration combinesWilmar's integrated agribusiness model and our large presence in basic and downstreamoleochemicals with Clariant's technical expertise and established market presence in amines. Thejoint upstream and downstream strengths of our businesses make the merits of this venture verycompelling", said Kuok Khoon Hong, Chairman & CEO of Wilmar.

Clariant will contribute its Industrial & Consumer Specialties (ICS) Business Unit's salesactivities of relevant amines and defined derivatives to the joint venture as well as its aminesplant in Germany and production output from its amines plant in Brazil. Headquartered in

Muttenz, Switzerland, ICS has the highest sales volume in the Clariant Group and is one of thelargest providers of specialty chemicals and application solutions for consumer care andindustrial markets. Wilmar will contribute a new plant in China as well as its oleochemicalexpertise, including access to renewable raw materials. Wilmar is among the world's largestprocessors and merchandisers of palm and lauric oils. "Due to its strong roots in Asia combinedwith plans to expand the business globally, Wilmar is an excellent partner for Clariant to supportour customer base in all parts of the world", said Michael Willome, Head of Business Unit ICS.


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CLARIANT

CORPORATE MEDIA RELATIONS INVESTOR RELATIONS

KAI ROLKER

Phone +41 61 469 63 [email protected]

ULRICH STEINER


STEFANIE NEHLSEN


SIEGFRIED SCHWIRZER


WILMAR

CORPORATE COMMUNICATIONS INVESTOR RELATIONS

IRIS CHAN

Phone +65 6216 [email protected]

LIM LI CHUEN

Phone +65 6507 [email protected]

www.clariant.com

Clariant is an internationally active specialty chemical company, based in Muttenz near Basel.The group owns over 100 companies worldwide and employed 22.149 employees on December31, 2011. In the financial year 2011, Clariant produced a turnover of around CHF 7.4 billion.

Clariant is divided into eleven business units: Additives; Catalysis & Energy; Emulsions,Detergents & Intermediates; Functional Materials; Industrial & Consumer Specialties; LeatherServices; Masterbatches; Oil & Mining Services; Paper Specialties; Pigments; TextileChemicals. Clariant focuses on creating value by investing in future profitable and sustainablegrowth, which is based on four strategic pillars: Improving profitability, innovation as well asresearch and development, dynamic growth in emerging markets, and optimizing the portfoliothrough complementary acquisitions or divestments.

www.wilmar-international.com

Wilmar International Limited, founded in 1991 and headquartered in Singapore, is today Asia's

leading agribusiness group. Wilmar is ranked amongst the largest listed companies by marketcapitalisation on the Singapore Exchange. Wilmar's business activities include oil palmcultivation, oilseeds crushing, edible oils refining, sugar milling and refining, specialty fats,oleochemicals, biodiesel and fertilisers manufacturing and grains processing. At the core ofWilmar's strategy is a resilient integrated agribusiness model that encompasses the entire valuechain of the agricultural commodity processing business, from origination and processing tobranding, merchandising and distribution of a wide range of agricultural products. It has over400 manufacturing plants and an extensive distribution network covering China, India, Indonesia


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and some 50 other countries. The Group is backed by a multinational workforce ofapproximately 90,000 people. Wilmar's portfolio of high quality processed agricultural productsis the preferred choice of the food manufacturing industry, as well as the industrial and consumerfood cateringbusinesses. Its consumer-packed products occupy a leading share in its targeted markets.

Through scale, integration and the logistical advantages of its business model, Wilmar is able toextract margins at every step of the value chain, thereby reaping operational synergies and costefficiencies. Wilmar remains a firm advocate of sustainable growth and is committed to its roleas a responsible corporate citizen.


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Hyrax Energy and WARF enter into licensing agreement

ByBret WilliamsOctober 26, 2012Posted in:Alternative Energy, Business, Featured News, Industry,Research, Science, United States

Hyrax Energy looks to commercialize new biofuelproduction technology

Hyrax Energy, a leading bioenergy company, and the Wisconsin Alumni Research Foundation(WARF) have entered into a licensing agreement that could accelerate the commercialization ofnew biofuel production technology. Fuel production is becoming an increasingly important issue,especially in the U.S. where political tensions are threatening access to oil and other fossil-fuels.Biofuels are becoming more popular as the country begins to looks for alternatives to oil, butefficient production technology has kept biofuel soundly beyond mainstream adoption.

Technology produces clean fuel and plastics

Researchers from the University of Wisconsin-Madison and Hyrax Energy have developed anew technology that is able to convert cellulosic biomass into clean fuel and other valuablechemicals. The process makes use of ionic liquids that are capable of breaking down cellulosicbiomass without the use of enzymes or expensive refinement techniques. This process createssugars that can be fermented and used to produce chemicals that can be used to create clean fuelsand plastic materials.

New technology could have economic benefits

Through the licensing agreement with WARF, Hyrax Energy believes that this biofuelproduction technology can be commercialized and spread throughout the U.S. and, eventually,foreign markets. Because the process is designed to specifically avoid the expensive aspects offuel production, its associated technology could be considered a viable alternative toconventional fuel production techniques. This new technology may also open up economicopportunities throughout the country by creating jobs and spurring demand for clean biofuels.

Companies must overcome challenges to attain commercialization

It may be some time before Hyrax Energy and WARF are able to commercialize this new biofuelproduction technology. Even the most promising clean technologies have failed to attain

commercialization in the U.S. market in the past. Hyrax Energy and WARF will have toovercome several challenges before their technology can be considered viable enough to replaceconventional fuel production techniques. It will also have to compete with the growingpopularity ofhydrogen fuel, which has all but solidified its position of dominance in the autoindustry.
http://www.hydrogenfuelnews.com/author/bret/http://www.hydrogenfuelnews.com/author/bret/http://www.hydrogenfuelnews.com/alternative-energy-2/http://www.hydrogenfuelnews.com/alternative-energy-2/http://www.hydrogenfuelnews.com/business/http://www.hydrogenfuelnews.com/featured-news/http://www.hydrogenfuelnews.com/industry/http://www.hydrogenfuelnews.com/research/http://www.hydrogenfuelnews.com/science/http://www.hydrogenfuelnews.com/united-states/http://www.warf.org/http://www.investorideas.com/news/2012/renewable-energy/10221.asphttp://www.hydrogenfuelnews.com/new-biofuel-production-method-could-make-process-more-affordable/855788/http://www.hydrogenfuelnews.com/new-biofuel-production-method-could-make-process-more-affordable/855788/http://www.hydrogenfuelnews.com/http://www.hydrogenfuelnews.com/http://www.hydrogenfuelnews.com/new-biofuel-production-method-could-make-process-more-affordable/855788/http://www.hydrogenfuelnews.com/new-biofuel-production-method-could-make-process-more-affordable/855788/http://www.investorideas.com/news/2012/renewable-energy/10221.asphttp://www.warf.org/http://www.hydrogenfuelnews.com/united-states/http://www.hydrogenfuelnews.com/science/http://www.hydrogenfuelnews.com/research/http://www.hydrogenfuelnews.com/industry/http://www.hydrogenfuelnews.com/featured-news/http://www.hydrogenfuelnews.com/business/http://www.hydrogenfuelnews.com/alternative-energy-2/http://www.hydrogenfuelnews.com/author/bret/


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CareFirst BlueCross BlueShield, Healthways

Announce Extension of Contract for Disease

Management Services Through 2015Published: October 17, 2012

Read more here: http://www.heraldonline.com/2012/10/17/4342837/carefirst-bluecross-blueshield.html#storylink=cpy

Long-Term Contract Covers Approx. 1.2 Million Federal EmployeesProgram and Self-Insured Employer Members of CareFirst

BALTIMORE & NASHVILLE, TENN.Healthways (NASDAQ: HWAY) and CareFirst

BlueCross BlueShield (CareFirst) today announced an extension of disease management solutions

through 2015 representing a population of approximately 1.2 million in the Maryland and greater DC

region. The contract provides access to services for a number of chronic conditions to nearly 600,000

members that CareFirst serves within the Federal Employees Program (FEP) as an administrator for

the federal government and chronic condition services to about 90 ASO self-insured employer

customers of CareFirst representing about 600,000 employees and beneficiaries of those employees.

The contract extensions allow CareFirst and Healthways to continue to expand services to additional

employer customers of CareFirst in the future.

With the inherent pressure to slow the rise in health care costs, it has never been more important to

have programs in place that seek to improve the health of our members. Our relationship with

Healthways continues to facilitate the promotion of better care, said Chet Burrell, President and

CEO of CareFirst. We look forward to exploring continued opportunities to partner with

Healthways in serving our customers through innovative practices that are demonstrably effective.

For many years, CareFirst and Healthways have enjoyed a successful partnership, and we are

pleased to continue working together to promote a population-wide approach for effectively

managing the health of their self-insured and FEP members, said Healthways President and CEO

Ben R. Leedle, Jr. Healthways disease management programs are designed to drive behavior change

leading to improved member health status via multiple modalities of interventions, including

provider support, telephonic intervention and mail education. These interventions have consistently

produced both short- and long-term outcomes improvement for participants, and we applaud

CareFirst for their long-term commitment to this highly effective program.

About CareFirst


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In its 75th year of service, CareFirst, an independent licensee of the Blue Cross and Blue Shield

Association, is a not-for-profit health care company which, through its affiliates and subsidiaries,

offers a comprehensive portfolio of health insurance products and administrative services to 3.4

million individuals and groups in Maryland, the District of Columbia and portions of Northern

Virginia. In 2011, CareFirst contributed $51 million to community programs designed to increase theaccessibility, affordability, safety and quality of health care throughout its market areas. To learn

more about CareFirst BlueCross BlueShield, visit our web site at www.carefirst.com or follow us on

Twitter: http://twitter.com/CareFirst_News.

About Healthways

Healthways (NASDAQ: HWAY) is the largest independent global provider of well-being

improvement solutions. Dedicated to creating a healthier world one person at a time, the Company

uses the science of behavior change to produce and measure positive change in well-being for ourcustomers, which include employers, integrated health systems, hospitals, physicians, health plans,

communities and government entities. We provide highly specific and personalized support for each

individual and their team of experts to optimize each participants health and productivity and to

reduce health-related costs. Results are achieved by addressing longitudinal health risks and care

needs of everyone in a given population. The Company has scaled its proprietary technology

infrastructure and delivery capabilities developed over 30 years and now serves approximately 40

million people on four continents. Learn more at www.healthways.com orwww.silversneakers.com.

Photos/Multimedia Gallery Available: http://www.businesswire.com/cgi-

bin/mmg.cgi?eid=50444042&lang=en

Read more here: http://www.heraldonline.com/2012/10/17/4342837/carefirst-bluecross-

blueshield.html#storylink=cpy
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PepsiCo and Suntory Agree to Form Strategic BeverageAlliance in Vietnam

PURCHASE, N.Y. and OSAKA, Japan, Oct. 22, 2012 /PRNewswire/ -- PepsiCo, Inc. (NYSE: PEP), one of the world's

largest food and beverage companies, and Suntory Holdings Limited (Suntory), a global beverage and wellness

company based in Japan, today announced an agreement to form a strategic alliance in Vietnam.

(Logo: http://photos.prnewswire.com/prnh/20120424/NY93895LOGO )

Under the terms of the agreement, Suntory will acquire a 51 percent stake in PepsiCo's Vietnam beverage business,

while PepsiCo will be a 49 percent shareholder. Suntory and PepsiCo will hold key roles in the management team of

the new joint venture, which will serve as the bottler for both companies in Vietnam.

The new alliance is expected to build on PepsiCo's existing position in Vietnam and to create new growth

opportunities for PepsiCo and Suntory in the market. PepsiCo is one of the leading players in Vietnam's liquid

refreshment beverage space, and the alliance is designed to combine the capabilities of both companies in ways that

are mutually beneficial to their businesses, customers and consumers.

PepsiCo will retain marketing and innovation responsibilities for its portfolio of iconic beverage brands in Vietnam,which include Pepsi-Cola, 7-UP, Sting, Mirinda, Tropicana Twister, Lipton and Aquafina. Suntory brings to the

strategic alliance strong brands and a long history of successfully developing beverages for the Asia market.

PepsiCo and Suntory have an established record of successfully working together in other beverage markets,

including the United States, Japan and New Zealand.

Henry Park, CEO of Suntory Beverage & Food Asia Pte. Ltd., a wholly owned subsidiary of Suntory Holdings Limited,

said: "Suntory has been actively expanding its business foundation to consolidate its position in growing South-East

Asian markets. This alliance is one of our strategic initiatives to pursue further growth in the region. Suntory is

committed to the Vietnam business together with PepsiCo, our partner of more than 30 years, which has already

established a leading position in Vietnam."

Umran Beba, President, PepsiCo Asia Pacific said: "Vietnam is a highly attractive growth market where PepsiCo is

well positioned in the food and beverage marketplace. We're focused on expanding our food and beverage business

in Vietnam through continued investment across our portfolio, and our beverage alliance with Suntory is an important

part of our strategy to position PepsiCo for sustainable long-term growth in the market. Suntory is a world-class

company and proven PepsiCo partner, and we believe their expertise and capabilities will drive the continued

success of our Vietnam beverage business."

Since entering the market in 1994, PepsiCo has undertaken an investment program of more than $500 million and

now has five beverage manufacturing plants in Vietnam, a high priority market in PepsiCo's aggressive emerging and

developing markets growth plans. PepsiCo nearly tripled its business in emerging and developing markets from $8

billion in annual revenue in 2006 to $22 billion in 2011.

Suntory has accelerated its global strategy and expanded its beverage business in Southeast Asia following the

establishment of Suntory Beverage & Food Asia Pte. Ltd. in Singapore. Expansion into Vietnam is a key part of

Suntory's long-range plans.

PepsiCo will continue to independently operate its foods business in Vietnam. PepsiCo enjoys success in Vietnam's

snacks category with its Poca brand, and intends to continue to invest in agriculture, innovation and distribution to

grow its foods business across the country.
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This transaction is subject to the completion of legal processes.

About Suntory

Suntory Group was founded in 1899 and has become a multi-national major beverage company with a broad range of

business including wellness, food, restaurants and flowers. In 2011, Suntory's consolidated sales were more than $23

billion. The Suntory group has approximately 200 group companies, with 28,532 employees across Japan, the

United States, Europe and Asia Pacific. Suntory Group's corporate philosophy is "In Harmony with People and

Nature." Suntory Group promotes corporate activities that deliver the highest quality products and services to its

customers, and contributes to the fruitful development of culture and lifestyles as well as to the achievement of a

global sustainable environment. We will always continue to pursue these goals across the globe. For more

information please visit www.suntory.com

About PepsiCo

PepsiCo is a global food and beverage leader with net revenues of more than $65 billion and a product portfolio that

includes 22 brands that generate more than $1 billion each in annual retail sales. Our main businesses Quaker,

Tropicana, Gatorade, Frito-Lay and Pepsi-Cola make hundreds of enjoyable foods and beverages that are loved

throughout the world. PepsiCo's people are united by our unique commitment to sustainable growth by investing in a

healthier future for people and our planet, which we believe also means a more successful future for PepsiCo. We

call this commitment Performance with Purpose: PepsiCo's promise to provide a wide range of foods and beveragesfor local tastes; to find innovative ways to minimize our impact on the environment by conserving energy and water

and reducing packaging volume; to provide a great workplace for our associates; and to respect, support and invest

in the local communities where we operate. For more information, please visit www.pepsico.com.

PepsiCo Cautionary Statement

Statements in this communication that are "forward-looking statements" are based on currently available information,

operating plans and projections about future events and trends. Terminology such as "believe," "expect," "intend,"

"estimate," "project," "anticipate," "will" or similar statements or variations of such terms are intended to identify

forward-looking statements, although not all forward-looking statements contain such terms. Forward-looking

statements inherently involve risks and uncertainties that could cause actual results to differ materially from those

predicted in such forward-looking statements. Such risks and uncertainties include, but are not limited to: changes in

demand for PepsiCo's products, as a result of changes in consumer preferences and tastes or otherwise; PepsiCo'sability to compete effectively; unfavorable economic conditions in the countries in which PepsiCo operates; damage

to PepsiCo's reputation; PepsiCo's ability to grow its business in developing and emerging markets or unstable

political conditions, civil unrest or other developments and risks in the countries where PepsiCo operates; trade

consolidation or the loss of any key customer; changes in the legal and regulatory environment; PepsiCo's ability to

build and sustain proper information technology infrastructure, successfully implement its ongoing business

transformation initiative or outsource certain functions effectively; fluctuations in foreign exchange rates; increased

costs, disruption of supply or shortages of raw materials and other supplies; disruption of PepsiCo's supply chain;

climate change, or legal, regulatory or market measures to address climate change; PepsiCo's ability to hire or retain

key employees or a highly skilled and diverse workforce; failure to successfully renew collective bargaining

agreements or strikes or work stoppages; failure to successfully complete or integrate acquisitions and joint ventures

into PepsiCo's existing operations; failure to successfully implement PepsiCo's global operating model; failure to

realize anticipated benefits from PepsiCo's productivity plan; any downgrade of PepsiCo's credit ratings; and any

infringement of or challenge to PepsiCo's intellectual property rights.

For additional information on these and other factors that could cause PepsiCo's actual results to materially differ

from those set forth herein, please see PepsiCo's filings with the SEC, including its most recent annual report on

Form 10-K and subsequent reports on Forms 10-Q and 8-K. Investors are cautioned not to place undue reliance on

any such forward-looking statements, which speak only as of the date they are made. PepsiCo undertakes no
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obligation to update any forward-looking statements, whether as a result of new information, future events or

otherwise.

SOURCE PepsiCo, Inc.

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