Post on 06-May-2015
April 11, 20231
Characteristics of Fortune 500
Group 1:
Tae-Wooing Park
Abhay Agarwal
Pengna Chen
April 11, 20232
Outline
1. Introduction of Fortune 500 1. Introduction of Fortune 500
2. Ranking Factors 2. Ranking Factors
3. Country by Country Analysis 3. Country by Country Analysis
4. Characteristics (12) 4. Characteristics (12)
5 5. Reference 5. Reference
April 11, 20233
1. Introduction of Fortune 500 1. Introduction of Fortune 500
4April 11, 2023
What is Fortune 500 ?
The Fortune Global 500 is a ranking of the top 500 public corporations worldwide as measured by revenue.
The lists complied and published annually by Fortune magazine.
Until 1989 it listed only non-US industrial corporations under the title "International 500", while the Fortune 500 contained and still contains exclusively US corporations.
Source: http://en.wikipedia.org/wiki/Fortune_Global_500
April 11, 20235
What is Fortune 500 ?
In 1990, US companies were added to compile a truly global list of top industrial corporations as ranked by sales.
Since 1995, the list has had its current form, listing also top
financial corporations and service providers by revenue.
Source: http://en.wikipedia.org/wiki/Fortune_Global_500
April 11, 20236
What is Fortune 500 ?
In 2005, more than 450 of them were headquartered in Europe (195), the United States (176), and Japan (80).
This list ranks only public companies, or those which have issued securities through an offering and which are traded on the stock market.
Source: http://en.wikipedia.org/wiki/Fortune_Global_500
April 11, 20237
What is Fortune 500 ?
This list is important to a number of financial groups, but particularly to investors, who study the performance of these select companies.
In addition, academic and business researchers look to these companies to learn about best practices in various industries and to discover the secrets to their business and financial success.
Source: http://www.answers.com/topic/fortune-500#ixzz1Bpxm3Vud
April 11, 20238
Top 10 Brands on Fortune List 2010
April 11, 20239
2. Ranking Factors of Fortune 500
April 11, 202310
1. Sales Growth Ranking 1. Sales Growth Ranking
2. Assets Ranking 2. Assets Ranking
3. Earnings Ranking 3. Earnings Ranking
4. Capitalization Ranking 4. Capitalization Ranking
Four Ranking Factors
April 11, 202311
Ranking Factors Used in Determining the Fortune 500
Sales Growth Ranking Tracking the increase in sales of a company is a way to
determine if the company is indeed growing. This is very important to investors.
Sales growth is also indicative of the state of the economy. One would expect a company's sales to grow during a healthy period of economic activity.
growth rate> general growth in the industry outperform
April 11, 202312
Ranking Factors Used in Determining the Fortune 500 Cont’d
Sales Growth Ranking OUTPERFORM
a superior quality product, low-cost production or service delivery methods, excellent customer service and support, or innovations in production and/or processing. ( characteristics )
Companies on the Fortune 500 list typically exhibit more than one success measure that may be important for competitors to emulate.
April 11, 202313
Ranking Factors Used in Determining the Fortune 500
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, accounts receivable, inventory, office equipment, and property.
April 11, 202314
Ranking Factors Used in Determining the Fortune 500
Earnings Ranking
Earnings
= Revenues – Cost of Sales – Operating Expenses – Taxes
Earnings are often the single most important determinant
of a corporation's stock price.
April 11, 202315
Ranking Factors Used in Determining the Fortune 500
Capitalization Ranking Capitalization is the sum of a corporation's long-term debt,
stock, and retained earnings. It may also be called invested capital.
Number of shares outstanding * Price per Share market price of the entire company / market capitalization
Source: http://www.inc.com/encyclopedia/fortune-500.html#
April 11, 202316
3. Country by Country Analysis 3. Country by Country Analysis
April 11, 202317
Country-by-country analysis
The number of country that has over 10 of Global 500 company is 12 countries.
Rank Country # of Global 500 Companies
1 U.S. 139
2 Japan 71
3 China 46
4 France 39
5 Germany 37
6 Britain 29
7 Switzerland 15
8 Netherland 13
9 Canada 11
10 Italy 11
11 Spain 10
12 South Korea 10
April 11, 202318
Country-by-country analysis
The number of country that has Global 500 company is only 33.
No. Country # of Global 500 Com-
paniesNo. Country
# of Global 500 Com-
paniesNo. Country
# of Global 500 Com-
panies
1 Australia 8 13 Germany 37 25 Saudi Arabia 1
2 Austria 3 14 India 8 26 Singapore 2
3 Belgium 5 15 Ireland 2 27 South Korea 10
4 Belgium/Netherlands 1 16 Italy 11 28 Spain 10
5 Brazil 7 17 Japan 71 29 Sweden 5
6 Britain 29 18 Luxembourg 1 30 Switzerland 15
7 Britain/Netherlands 1 19 Malaysia 1 31 Taiwan 8
8 Canada 11 20 Mexico 2 32 Thailand 1
9 China 46 21 Netherlands 13 33 Turkey 1
10 Germany 2 22 Norway 1 34 U.S. 139
11 Finland 1 23 Poland 1 35 Venezuela 1
12 France 39 24 Russia 6
April 11, 202319
Country-by-country analysis
U.S., Japan, and China accounted for over 50 percent.
Rank Country # of Global 500 Companies
1 U.S. 139
2 Japan 71
3 China 46
Total 256(51.2%)
April 11, 202320
Industry Analysis
Five companies of top 10 are petroleum refining industries.
Rank2010
Rank2009
Company Country Industry
1 3 Wal-Mart Stores U.S. Retail
2 1 Royal Dutch Shell Netherlands Petroleum
3 2 Exxon Mobil U.S. Petroleum
4 4 BP Britain Petroleum
5 10 Toyota Motor JapanAutomo-
biles
6 11 Japan Post Holdings Japan Diversified
7 9 Sinopec China Petroleum
8 15 State Grid China Power
9 73 AXA France Insurance
10 13 China National Petroleum China Petroleum
April 11, 202321
Industry analysis
Wal-Mart Stores were ranked No.1.
recaptured No.1 in two years
Year 2006 2007 2008 2009 2010
Rank 2 1 1 3 1
Revenue($ millions)
Profits($ millions)
2010 480,214 14,335
2009 405,607 13,400
April 11, 202322
Industry analysis
The revenue decreased due to the global financial crisis for 2009.
Decreased total sales compared with the previous year
Decrease of 8.3 percent(global 500)
Decrease of 11.4 percent(global 100)
But, increased operating profit
Increase of 16.9 percent(global 500)
Increase of 18.9 percent(global 100)
April 11, 202323
Industry Analysis
Gazprom is the most profitable company.
Rank CompanyGlobal 500
Rank2009 Profits($ millions)
1 Gazprom 50 24,555.7
2 Exxon Mobil 3 19,280.0
3 Industrial & Commercial Bank of China 87 18,832.2
4 BP 4 16,578.0
5 China Costruction Bank 116 15,627.9
6 Petrolbras 54 15,504.0
7 Barclays 96 14,648.3
8 Micorsoft 115 14,569.0
9 Wal-Mart Stroes 1 14,335.0
10 Vodafone 80 13,782.3
April 11, 202324
Industry Analysis
Wal-Mart Stores are the biggest employer.
Rank CompanyGlobal 500
Rank2009 Number of Em-
ployees
1 Wal-Mart Stores 1 2,100,000
2 China National Petroleum 10 1,649,992
3 State Grid 8 1,533,800
4 U.S. Postal Service 92 667,605
5 Sinopec 7 633,383
6 Hon Hai Precision Industry 112 611,000
7 China Telecommuincations 204 495,239
8 Carrefour 22 475,976
9 Tesco 58 468,508
10 Agricultural Bank of China 141 441,144
April 11, 202325
Country-by-country analysis
The continuously promising country is China.
April 11, 202326
Country-by-country analysis
The number of Indian company is increasing.
April 11, 202327
Country-by-country analysis
The number of American company is decreasing.
April 11, 202328
Country-by-country analysis
The number of South Korean company is decreasing since 2008.
April 11, 202329
4. Characteristics (12) of Companies on Fortune List 4. Characteristics (12) of Companies on Fortune List
April 11, 202330
Character 1. Vision
Fortunate 500 companies have a clear vision stemming from top management as to what they are about and what they want to be. This vision is clearly communicated to all employees and used on a daily basis for making decisions.
The vision of Wal-Mart is quiet straight forward. “To become a world wide leader in retailing.”
April 11, 202331
Character 1. Vision Cont’d…
“Toyota’s aims to achieve long term, stable growth in harmony with the environment, the global economy, the local communities it serves and its stakeholders.”
“To design and create in the decade the new global network, processes of human resources to more complex and productive work.” – AT&T
April 11, 202332
Character 2. Empowerment
Employees are treated as though they are partners, not slaves, to the business.
The organization expects a lot from every employee, but is willing to help employees do their job with minimal barriers.
Employees are expected to constantly be learning new skills and growing, and the organization provides training and career development options to facilitate that growth.
April 11, 202333
Best Employers
Rank Company Name Global Rank# Industry
4 Google 102 Internet Services and Retailing
9 Qualcomm 225
Network and Other
Communications Equipment
16 Cisco Systems 58
Network and Other
Communications Equipment
18 Whole Foods Market 284 Retail
April 11, 202334
Character 3. Performance
Employee performance is measured and monitored in a way that encourages optimal performance.
Goals are set for all major areas for performance, and feedback is routinely provided as to how employees are doing against those goals. Even the individual projects and company has certain goals and performance is measured against them.
April 11, 202335
Top companies by revenue
Rank # Company Name Industry
Revenues ($ million)
1. Wal-Mart Stores General Merchandisers 408,214.0
2. Royal Dutch Shell Petroleum Refining 285,129.0
3. Exxon Mobil Petroleum Refining 284,650.0
4. BP Diversified Financials 246,138.0
April 11, 202336
Character 4. Profit
The company is profitable because being so is necessary to survive, but does not treat this objective as its sole purpose for being.
A company invests and involves in those transactions which bring in profit for the company.
Company’s image and stakeholder’s confidence largely depend on the profits a company earn.
April 11, 202337
Top companies by profit
Rank Company Name
Global Rank# Industry Profit ($
million)
1 Gazprom 50 Energy 24,555.7.0
2 Exxon Mobil 3 Petroleum Refining 19,280.0
3Industrial and Commercial
Bank of China87 Finance 18,832.2
4 BP 4 Petroleum Refining 16,578.0
April 11, 202338
Character 5. Team Approach
Employees are organized as much as possible into teams to facilitate the best means for solving problems, building morale, and creating synergy for achieving group and organizational goals.
April 11, 202339
Character 6. Customer Service
Customers are treated as if they are the most important part of the business, which they are. Every employee and manager seeks to serve the customer or support those employees that are doing so. All work towards a common goal of customer satisfaction.
April 11, 202340
Top companies by Customer Service - According to a survey by J.D. Power & Business Week
Company Name
Global Rank# Industry Service
Index
1United Services
Automobile Association
132 Insurance 992.6
3 General Motors 15 Motor Vehicles 985.4
4 Nordstrom 270 General Merchandisers 947.1
7 Toyota Motors 5 Motor Vehicles 932.5
April 11, 202341
Character 7. Quality
The organization prides itself on producing quality goods and services all the time. The company knows that long-term success depends 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.
April 11, 202342
Top Companies by quality
Rank Company Name
Global Rank# Industry Industry
Rank
1 Walt Disney 57 Entertainment 1
2 Intel 62 Semiconductors 1
3 UPS 43 Delivery 1
4 Apple 56 Computers 1
April 11, 202343
Character 8. Communication
Management knows that communication is the oil 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.
April 11, 202344
Character 9. Ethics
Ethics in business are about distinguishing between the right and the wrong and adhering to the ethical principles. The trustworthiness of a business, its customer service, its employee care, its way of dealing with customers and its urge to retain their old customers, is a part of the business ethics which plays a important role for long term success of companies.
April 11, 202345
Character 10. Employee Management
One of your strongest assets is a loyal and content work force.
Disgruntled employees don't care about the company which means they don't care about their work and the customers. So a lot of emphasis is given on employee satisfaction.
It includes their work, surrounding environment, pay and growth opportunities.
An efficient reward system is present in these companies, to reward those who make steady improvements and perform beyond expectations, which includes profit sharing.
April 11, 202346
Top companies in people management
Rank Company Name
Global Rank# Industry Industry
Rank
1 Goldman Sachs Group 39 Megabanks 1
2 Apple 56 Computers 1
3 Nike 124 Apparel 1
4 UPS 43 Delivery 1
April 11, 202347
Character 11. Acceptance to Change
Changes are necessary for a company to excel and improve its performance over time.
These companies make changes taking care that they are effectively integrated with existing organizational 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. They follow a strategy of constant change and improvement.
April 11, 202348
Top companies by Growth in Revenue
Rank Company Name Global Rank#
% Growth in Revenue
1 Old Mutual 220 39,434.1%
2 American International Group 41 829.3%
3 Aegon 103 485.6%
3 Gruppo Mediolanum 472 421.1%
April 11, 202349
Top companies by Growth in Profit
Rank Company Name Global Rank#
% Change in Profit
Profits ($ million)
1 Ping An Insurance 383 5,170.3 2,032.3
2 Sistema 460 2,551.7 1,643.4
3 Shanghai Automotive 223 1,924.5 1,070.2
4 Scottish & So. Energy 215 940.4 1,969.4
April 11, 202350
Character 12. Innovation
Executives now firmly believe that innovation is central to a company’s strategy and performance, but getting it right is as hard as ever.
Corporate performance is most likely to be affected by breakthrough innovations.
Companies generally focus on innovation in areas such as product or service development. In certainly helps them in maintaining their market leadership.
April 11, 202351
Top Companies by Innovation
Rank Company Name Global Rank# Industry
1 Apple 56 Computers
2 Google 102 Internet Services and Retailing
3 Nike 124 Apparel
4 Amazon.com 100 Internet Services and Retailing
April 11, 202352
Reference
1. http://en.wikipedia.org/wiki/Fortune_Global_500
2. http://www.google.com.hk
3. http://www.inc.com/encyclopedia/fortune-500.html#
4. http://money.cnn.com/magazines/fortune/global500/2010/index.html
5. http://money.cnn.com/galleries/2010/fortune/1002/
gallery.mostadmird_product_quality.fortune/2.html
6. http://articles.moneycentral.msn.com/News/
25CompaniesWhereCustomersComeFirst.aspx?page=3
7. http://www.uspages.com/fortune500.htm
April 11, 202353
Thank You!