characteristics of fortune global 500_assignment-2_akhil and namuun
TRANSCRIPT
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Characteristics of Fortune
Global 500Group 5:
Usukh Ochir Namuun
Akhil Agrawal
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Contents
Introduction of Global Fortune 500
Ranking factors used in determining Fortune 500 Characteristics of Fortune 500 companies
Stories of some fortune 500 companies that started with
next to nothing.
How to become fortune 500 company Reference
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Introduction of Global
Fortune 500
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What is it?
The Fortune Global 500 is a ranking of the top 500
corporations worldwide as measured by revenue.
The list is compiled and published annually by Fortune
magazine.
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What is it?
This list ranks only public companies, or those which
have issued securities through an offering and which aretraded on the stock market.
This list is important to a number of financial groups, butparticularly to investors, who study the performance ofthese select companies.
In addition, academic and business researchers look tothese companies to learn about best practices in variousindustries and to discover the secrets to their business andfinancial success.
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Why it matters?
The Fortune 500 is a definitive list of the country's largest
and often most influential companies. A company's fall in
rank on the list could indicate or reflect trouble for the
company or its industry as a whole, and a move up the listgenerally signals good news.
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Influence of Fortune 500
It shows the snapshot of USA, China and Japans
commercial progress, where the money has gone and how
its moved to new industries over time.
It is a pride for the company to get a place in fortune 500.
Act as a credibility factor for the company and help in
getting new clients.
Act as a evaluation criteria for evaluating companys
performance
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Top 10 on Fortune 2011
This is the top 10 as published in July 2011. It is based on the companies'
fiscal year ended on or before 31 March 2011.
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Top companies: Fastest Growing
Growth by Revenues Growth by Profits
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Top companies: Most profitable
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Top companies: Biggest
employers
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Top companies: Movers
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Top 11 countries with themost Global 500 companies
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Top companies in South Korea
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Country
RankCompany
Global
500
rank
Revenues
($ millions)
1 Indian Oil 98 68,837
2 Reliance Industries 134 58,900
3 Bharat Petroleum 272 34,102
4 State Bank of India 292 32,450
5 Hindustan Petroleum 336 28,593
6 Tata Motors 359 27,046
7 Oil & Natural Gas 361 26,945
8 Tata Steel 370 26,065
Top companies in India
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Comparative analysis of # ofcompanies in TOP countries
0
20
40
60
80
100
120
140
160
180
2006 2007 2008 2009 2010 2011
U.S.
Japan
China
India
South Korea
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Ranking factors
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4 main factors
1. Sales Growth Ranking
2. Assets Ranking
3. Earnings Ranking4. Capitalization Ranking
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Sales Growth Ranking
When a company's sales grow faster than the generaleconomy in the markets in which the firm operates, the
firm is obviously outperforming the market due to some
process within the company.
Companies on the Fortune 500 list typically exhibit morethan one success measure that may be important for
competitors to emulate.
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Sales Growth Ranking
Factors affecting Sales Growth of Companies:
A superior quality product
Low-cost production
Service delivery method
Excellent customer service and support
Innovations in production and processing
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Assets Ranking
Companies listed on the Fortune 500 usually have large
and growing asset balances.
An asset is any item of economic value owned by the
corporation, including cash, securities, accountsreceivable, inventory, office equipment, and property.
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Earnings Ranking
Earnings are often the single most important
determinant of a corporation's stock price.
Earning = Revenue (Cost of Sales + Operating
expenses + Taxes)
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Capitalization Ranking
Capitalization=
long-term debt + stock+retained earnings
It may also be called invested capital.
By multiplying the number of shares outstanding
by the price per share, it is possible to determinethe market price of an entire company or its
market capitalization.
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Characteristics of Fortune
500 companies
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1. Consistent Vision
Everyone on the management team shares thesame clear vision of where the company is
heading and should be head in future.
Proper articulation of vision across the
organization
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Vision of top fortune 500
companies
To become worldwide leader in retailing
Exxon Mobil Corporation is committed to being
the world's premier petroleum and petrochemical
company.
At the heart ofThe ChevronWay is our vision
to be the global energy company most admired
for its people, partnership
and performance
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2. Leadership Development
Great emphasis on developing leadershipexcellence in the company
Develop leadership among employees by
providing learning opportunities to them.
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Example of leadershipdevelopment
General electric: Known for having one of the best leadership development
model
Involves moving GE managers and executives from job to
job every two to three years. Provides GE managers much needed experience and
exposure to different elements of the business.
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3. Strong values
All fortune 500 companies have strong values which theyfollowed continuously
Most important generating trust among shareholders,customers, society and government.
Some of the values are:
Integrity
Fairness Customer satisfaction
Sustainable growth
Innovation
Respect
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Core values of top fortune500 companies
Microsoft:
Integrity and honesty
Passion for customers, partners and technology
Open and respectful with others and dedicated to making
them better.
Willingness to take on big challenges and see them through.
Self-critical, questioning, and committed to personal
excellence and self-improvement.
Accountable for commitments, results, and quality to
customers, shareholders, partners, and employees.
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Values contd.
Google: Focus on the user and all else will follow.
Its best to do one thing really, really well.
Fast is better than slow.
Democracy on the web works.
You dont need to be at your desk to need an answer.
You can make money without doing evil.
Apple: We believe that were on the face of the Earth to make great products.
We believe in the simple, not the complex.
We believe that we need to own and control the primary technologiesbehind the products we make.
We believe in deep collaboration and cross-pollination of our groups
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4. Empowerment
Employees are treated as though they are
partners, not slaves, to the business.
The organization expects a lot from everyemployee, but is willing to help employees do
their job with minimal barriers.
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5. Customer satisfaction
Customers are treated as if they are the most
important part of the business.
Every employee and managers seeks to serve the
customer or support those employees that are
doing so.
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6. Commitment to Quality
Produces high quality goods and services all thetime.
Companies knows that long-term success depend
in large part upon the long-term reputation of the
company and so consistently seeks to develop
lasting, quality relationships and to build quality
products.
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7. Ethics
The company expects all employees to beethical and to act on a daily basis in a way
that is consistent with this belief
Creates proper guidelines and code of
conduct
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8. Effective Communication
Management knows that communication is theoil that keeps the company operating smoothly.
It seeks to communicate frequently to employees
at all levels of the organization and to allow
optimal opportunity for employees to
communicate in any direction within the
organization.
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9. Teamwork
Companies understands that teamwork is most
important factor to increase employees
productivity satisfaction and relationship with
each other.
Companies appreciates different people with
different ideas, patience, individuality,
self-confidence encouragement and leadership.
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Example of teamwork
Wal-Mart: Important value ofWal-Mart
Company considered itself as a group of
dedicated, hardworking, ordinary people who
have teamed together to accomplish
extraordinary things.
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Stories of some fortune 500
companies that started withnext to nothing.
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Apple
It was started in the garage of a young man by the nameof Steve Woznaick
Convince local electronic to buy first PC Both woznaick and Jobs penniless at the time, went to a
local computer parts supplier and ordered parts on credit.
Though the company has had its ups and downs in its 30-year history, Apple has proven to be the company that
produces the industry standard time and time again.
From the garage of Steve Wozniack to being ranked 35on the Fortune 500, Apple continues to grow and prove to
be a wise investment .
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Nordstorm
In 1887, a 16-year-old boy form Sweden left his home
and took manual jobs to survive. After struggling for ten years, the 26-year-old Nordstrom
was able to save nearly $13,000.
In 1901, Nordstrom opened his first shoe store, just
14 years after coming to America. Throughout the 20th Century Nordstrom grew from the
one shoe store in downtown Seattle to what is now a
multi-billion dollar retail empire.
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DELL
The path to the success that Dell now enjoys began with
an idea and a $1,000 investment. While attending the University ofTexas in 1984, Michael
Dell founded the company as PCs Limited.
Initial operations of Dells company ran from Dells dorm
room, until he decided to drop out of college to run hiscompany full time.
In 1985, the company produced the first computer of its
own design, and by 1988 had an initial public offering
that valued the company at nearly $80 million.
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Starbucks
In 1971, three academics each invested $1350 of theirown money into the first Starbucks located in downtownSeattle.
Shortly after opening, and to continue their operations,the three borrowed another $5000 from the local bank.
They continue to open new stores.
Starbucks went public in 1992, and proved to be one of
the most successful IPOs that year. Starbucks began to strategically expand all over the US,
at one point, at the rate of opening one new store per day.
Though Starbucks has seen experienced a decline inpopularity in the last several years the brands exponential
growth is impressive.
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How to become a Fortune
500 Company
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1.Articulate
Top management needs to establish a clear set of values
that they want the organization -and its employees -to
represent.
This would include specific descriptions of what each
value would look like in practice on a daily basis, as wellas a methodology for measuring each practice on an
ongoing basis.
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2. Identify and describe keyorganizational practices.
Key organizational practices need to be assessed todetermine a baseline of current business operations.
This information would come from a variety of methods
including interviews, historical documents, observation ofoperational meetings, and so on.
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3. Compare values withpractices
The extent and nature of alignment (or misalignment) of
the actual practices of the organization versus its stated
values is then determined.
It is helpful in this step to obtain additional information
from focus groups, employee and customer surveys, andto conduct an analysis of practices compared with the
experience of other companies.
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4. Establish priorities forrealignment
Issues and priorities regarding alignment of
organizational practices with stated values are then
itemized.
Changes that are deemed to have the greatest impact arescheduled to be made first.
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5. Recommend changes andimplementation strategy.
The required changes are defined and integrated with oneanother to create a vision of how the company would be
run based on todays information, products and markets.
This vision includes a process for continual change asnew information or priorities dictate. An implementation
strategy and timeline is then developed.
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6. Make desired changes
Alignment changes are made with care being taken that
they are effectively integrated with existingorganizational practices.
This requires the combined and managed efforts of many
people in the organization over a period of one to three
years. Involvement of people is a key way to build
commitment.
Outside expertise may be helpful in specific areas, such a
s business planning, management training, performance
management, team building, customer responsiveness,
compensation and reward systems.
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7. Monitor progress
A process for measuring the organizations on-going
performance and progress is developed and installed.
An effective monitoring system helps maintain the
appropriate degree of involvement by employees at alllevels of the organization, and alerts management to the
needs for mid-course corrections as they are needed.
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References
http://money.cnn.com/magazines/fortune/global500/2011/
http://en.wikipedia.org/wiki/Fortune_Global_500
http://www.inc.com/encyclopedia/fortune-500.html
http://www.businesspundit.com/fortune-500-rags-to-
riches/
http://www.missionstatements.com/fortune_500_mission
_statements.html
http://www.ehow.com/facts_7338887_do-become-
fortune-500-company_.html
http://www.uspages.com/fortune500.htm
http://www.company-statements-slogans.info/fortune500
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