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ABOUT THE FORTUNE 500
Managing
Editor
Andy Serwer
Categories Business Magazines
Frequency Bi-weekly
Circulation ~850,000
Publisher Time, Inc., a Time Warnercompany.
First issue 1930
Country United States
Language English
Website http://www.fortune.com
Fortune is a global business magazine published by Time Inc.'s Fortune
Money Group. Founded by Henry Luce in 1930, the publishing business,
consisting of Time, Life, Fortune, and Sports Illustrated, grew to become Time
Warner. In turn, AOL grew as it acquired Time Warner in 2000 when Time
Warner was the world's largest media conglomerate. Fortune's primary
competitors in the national business magazine category are Forbes, which is
also published bi-weekly, and Business Week. The magazine is especially
known for its annual features ranking companies by revenue. During
the Great Depression, Fortune developed a reputation for its social
conscience. For many years Fortune was published as a monthly, but as of
January, 1978, it is published twice a month.
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AME ICAN P 1 C MPANIES
orbes is theprimarycompetitorof ortunemagazine in thenational business
magazinecategory hich ispublishedbi eekly. Themagazine isespecially
known foritsannual featuresrankingcompaniesbyrevenue.
Rank Company
Revenues
($ millions)
Profits
($ millions)
1 Wal-Mart Stores 408,214.0 14,335.0
2 Exxon Mobil 284,650.0 19,280.0
3 Chevron 163,527.0 10,483.0
4 General Electric 156,779.0 11,025.0
5 Bank of America Corp. 150,450.0 6,276.0
6 ConocoPhillips 139,515.0 4,858.0
7 AT&T 123,018.0 12,535.0
8 Ford Motor 118,308.0 2,717.0
9 J.P. Morgan Chase & Co. 115,632.0 11,728.0
10 Hewlett-Packard 114,552.0 7,660.0
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EC NOMIES OF SCALE AND SCOPE
Economiesofscale isaneconomic termdescribingabusinessmodel where
the long-run average cost curve declines as production increases, or in a
simple example explaining the principal, where a manufacturing company
savesmoneyas it produceshigher uantitiesof itsproduct, as inall business
areas, themoreyoubuy, themoreyousave'.
Anexample is that ofaprivatesoft drinksmanufacturer. Themoreorders that
the manufacturer receives the more savings it makes, as it will in turn get
cheaper prices for the materials it needs to produce its drinks (e.g. plastic,
aluminium, sugar). All these factorscontribute to thebenefitsofeconomiesof
scale.
WHY ECONOMICS OF SCALE HAPPEN
The advantages of large scale production that result in lower unit
(average)costs (cost perunit)
AC = TC / Q AC=Average Cost, TC=Total Cost, Q= Quantity.
Economies of Scale spreads total costs over a greater range of
output
utput
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Suppose, forexample, that onda wereconstrained toproduceonly ,motorcyclesayear insteadofapossible million. ith thiscircumstance, theneed foranassembly linewouldbecome obsolete. Eachmotorcyclecouldbeproducedbyhand. ondacould ruleout benefits that might bederived fromthedivision and specializationof labour. In producing sucha small number,theuseofanyproduction techni ues that reduceaveragecost wouldb ecome
obsolete. In these two examples, onda and eneral otors would enjoyeconomiesofscalewithreducedaveragecost simplyby increasing thescaleof theiroperations.
ore broadly, economies of scale can occur for a number of reasons,including specialization efficiencies, volume negotiating/purchasing benefits,better management of by-products, and other benefits of size that translateinto savings or greater profitability for a large -scale producer.
Internal advantages that ariseasaresult of t hegrowthof the firm
Technical
Commercial
inancial
anagerial
Risk Bearing
TECHNICAL
Someproductionprocessesneedmore thanonemachine
ifferent capacities
ayneedmore thanonemachine tobe fullyefficient .
COMME CIAL-
arge firms can negotiate favourable prices as a result of buying in
bulk.
arge firmsmayhaveadvantages inkeepingpriceshigherbecauseof
theirmarket power.
FINANCIAL
arge firmsable tonegotiatecheaperfinancedeals
arge firms able to be more flexible about finance share options,
rights issues, etc.
arge firmsable toutiliseskillsofmerchant banks toarrange finance .
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MANAGE IAL
y Use of specialists accountants, marketing, lawyers, production,
humanresources, etc.
RISK EARING
y iversification
y arketsacrossregions/countries
y Product ranges
y R&
External Economiesof Scale theadvantages firms cangainasa result of
thegrowthof the industry normallyassociatedwithaparticulararea .
Supplyofskilled labour
Reputation
ocal knowledgeandskills
Infrastructure
Training facilities
DISECONOMIES OF SCALE
The disadvantages of large scale production that can lead to increasing
averagecosts.
Problemsofmanagement
aintainingeffectivecommunication
Co-ordinatingactivities oftenacross theglobe!
e-motivationandalienationofstaff
ivorceofownershipandcontrol
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Economiesof Scope
Ifa single firmcan jointly produce goods X and Y more cheaply that any
combinationof f irmscouldproduce them separately, then theproductionof X
and Y is characterized by economies of scope .This is an extension of the
concept
of
economies
of
scale
to
the
mu
ltiproduc
tcase
.
Economies of scope exist if a firm can produce several product lines at agiven output level more cheaply than a combination of separate firms eachproducing a single product at the same output level. Economies of scopediffer from economies of scale in that a firm receives a cost advantage byproducingacomplementaryvarietyofproductswithaconcentrationonacorecompetency. hile economies of scope and scale are often positivelycorrelatedand interdependent, strictlyspeaking thebenefits fromscopeha velittle todowith thesizeofoutput.
or instance, in the paper products industry it is common for large firms to
produce theirownpulp, theprimary ingredient inpaper, beforemanufacturingthepapergoods themselves. owever, smaller firms may have to purchasepulp from others at a higher net cost than the large companies pay. Thesavings fromproducingbothpulpandpaperwouldbeaneconomyofscopefor the large producers, although the large companies probably also haveeconomiesofscale that make it feasible to invest inpulpingoperations in thefirst place.
Inanotherexample, bankshaveeconomiesofscopewhen theyofferavarietyof related financial services, suchas retail bankingand investment services,throughasingleservice infrastructure (i.e., theirbranches, ATMs, and Internetsite). Clearly, the costs of providingeach service separately wouldbe much
greater than the costs of using a single infrastructure to provide multipleservices.
Economiesofscope canbemeasuredbyasfollows:
here C(Q
,Q ) is thecost ofjointlyproducinggoods and in the
respective uantities; C(Q
) is thecost ofproducinggood alone,
andsimilarly forC(Q ).
)()(
),()()(
21
2121
QCQC
QQCQCQC
SC
!
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Exam l Let 1) $12 million; 2) $8 million; and 1, 2)
$17 million. Thus:
Thus joint production of goods 1 and 2 would result in a 1 percent reduction
in total costs.
Few Examples as follows
Economies of scope between cable TV and high speed internet
service.
Production of timber and particle board.
orn and ethanol production
Production of beef and hides.
Power generation and distribution
Joint cargo and passenger transportation in airlines reduces excess
capacity.
Global wholesale distribution of cheese, salad dressing, and cigarettes
example: Phillip-Morris-Kraft).
omputer aided design of AD) of aircraft components.
The Learning urve
The ler
i
curveembodies the (i
verse
relatio
shipbetwee
averageproductio
cost andcumulativeoutput.
Average Cost
Average cost is a decreasing function of cumulative output
15.20$
3$
8$12$
17$8$12$!!
!SC
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If the firmshutsdownproduction, then losseswill be equal to fixed
cost, or:
Losses = JEHP
If the firmsupplies Q* unitsat theprice P*, then:
Losses = JEFP*
So longasprice (averagerevenue)exceedsaveragevariablecost, the loss
minimizingstrategywill entail producingsome output.
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THE REASONOF S CCESS FORFORTUNE TOP 1
COMPANIES OFAMERICA IS DUE TO ECONOMICS OF
SCALE AND ECONOMICS OF SCOPE
Industry Retailing
ounded Rogers, Arkansas
ounder(s) Sam alton
Areaserved orldwide
Keypeople Mike uke(CEO)
. ee Scott (Chairmanof the
Executive Committeeof the
Board)
S. Robson alton (Chairman)
Products iscount Stores
Supercenters
NeighbourhoodMarket
Revenue US 4 . billion ( )
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INCORPORATIONANDGROWTH
It opened itshomeofficeand first distributioncentre in Bentonville, Arkansas.
It had storesoperatingwith ,5 employeesandsalesof 44. million. It
began tradingstockasapubliclyheldcompanyonOctober , , andwas
soon listedon the New York StockExchange. al -Mart wasoperating in five
states: Arkansas, Kansas, ouisiana, Missouri, andOklahoma.
In the s, al-Mart continued togrow
rapidly, andby its 5thanniversary in therewere , storeswithsale s
of 5. billionand , associates. Thecompanyalsoopenedoverseas
stores, entering South America in 5 with stores in Argentina and Brazil;
andEurope in , buying Asda in the UK for billion.
In , al-Mart introduced the
"Neighbourhood Market" concept with three stores in Arkansas. By 5,
estimates indicate that thecompanycontrolledabout % of theretail grocery
and consumables business. I n 5, al-Mart had .4 billion in sales,
more than 6, facilities around the world including , stores in the
United States and , elsewhere, employing more than .6 million"associates" worldwide. Its U.S. presence grew so rapidly t hat only small
pockets of the country remained further than 6 miles ( km) from the
nearest al-Mart.
On September , , al-Mart introduced new advertising
with theslogan, "SaveMoney ive Better," replacing the "Always ow Prices,
Always" slogan, which it had used for the previous years. On March ,
, al-Mart announced that it is paying a combined .6 million in
bonuses toevery full andpart timehourlyworkerof thecompany.
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STRATEGIES THATWAL-MARTFOLLOWEDTO ECOME
NUMBER- 1 COMPANY
EFFECTIVE USE OF LOGISTICS & INVENTORY CONTROL &NON
DEPENDENCE ONANY SINGLE VENDOR:-
Wal-Mart effective logistic system is the flexibility when it chooses any
supplier.whenWal-Mart negotiateswithsupplier, supplierknows th at it isonly
Wal-Mart whichwill give themost competitiveprice. This isbecause it iseasy
forWal-Mart to find another supplier for a particular product at lower price
without facing any logistic problem. This givesWal -Mart a huge amount of
leveragewhen it dealswith thesupplier. Whensupplierknows that companyhas found lowerprice it will lowerprice it will lowerpriceaccordingly.
RELIABILITYON ITS OWNDISTRIBUTION SYSTEM:-
Wal-Mart has their own distribution system, which assists Wal-Mart to
shippinggood fromwarehouse tostorewithin 4 hours. It helpsWal -Mart to
replenish theshelf 4 time fasterthan itscompetitor.
ASSOCIATES
Wal-Mart alwaysempowers, or trains theiremployeeandchallenging them to
come up with new idea or suggestion which makes the company better.
Associatesalways try tocut thecost ofcompany.
ROLE OFTECHNOLOGY
Technologyplaysanvery important role insuccessofWal -Mart. Process like
ordering, shipping, communicationsand logisticswereautomated Store level
datasaleswerecollected, analysedand transmittedelectronicallyonareal
timebasis. . Throughhelpof technologyWal -Mart givescustomeranewway
ofshopping. It has thebest knowhow toprovide theright set products to the
right set ofcustomers.
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MASSIVE SIZE
BecauseofWal-Mart'smassivesize, it wields incrediblepower. It hasdriven
smallerretailersout ofbusiness; forcedmanufacturers tobemoreefficient.
SELLINGBRANDED PRODUCTS ATLOW COST
Wal-Mart always purchases product in huge quantity so transportation cost
fromoneendofsupply chain toanother isnot as costly foradditional units.
SoWal-Mart isable tosell brandedproduct at lowercost.
The stories of howWal -Mart pushes manufacturers into selling the same
product at lowerand lowerpricesare legendary. Oneexample is akewood
Engineering & Manufacturing Co. in Chicago, a fanmanufacturer. In theearly
s, a -inch box fan costs . Wal-Mart pushed the manufacturer to
lower the price, and akewood responded by automa ting the production
process, which meant layoffs. akewood also badgered it own suppliers to
knockdown thepricesofparts. Then, in , akewoodopeneda factory in
China, whereworkersearn 5 centsanhour. By , thepriceon the fan in
aWal-Mart storehaddropped toabout .
PROVIDING PRODUCTS AT EVERYDAYLOW PRICES (EDLP)
Wal-Mart follows thephilosophy likeeveryday lowprice. Wal -Mart has
emergedas industry leaderbecause it hasbeenbetterat containing it cost
whichhasallowed it topasson thesaving to it customer.
Thesecret to theirsuccess isbrilliance (ruthlessness) inkeepingcostsdown
and a willingness to operate at razor thin margins. Wal -Mart doesn't make
muchoneach thing thesell, theyrelyonvolume.
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EXXONMOBIL
Type Public (NYSE: XOM)
Industry Oil and gas
Founded 1999 (merger
Headquarters Irving, Texas, U.S.
Areaserved Worldwide
Key people Rex W. Tillerson
(Chairman, President, & CEO)
Products Fuels
LubricantsPetrochemicals
Revenue US$284.65 billion (2010)
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STRATEGIES THAT EXXONMOBILE FOLLOWEDTOBECOME
NUMBER- 2 COMPANIES
SAVINGTO INVEST
Rockefellerandhispartner, Clarkwereable to tap into thehighly lucrativeoilindustry because they had saved quit some money from their commodity
tradingbusiness.
Asyourbusinessbegins tomakeprofit, wemust continuallysaveagoodpartof it tobeable toexplorejuicybusinessopportunities that maycomeup later.
reat businessopportunitiesdont comeeveryday, ifwearenot prepa red forthembyhavingenough funds to invest when theyappear, will loseout.
We could also use our savings to expand our business into a biggerenterprise.
RECOGNIZINGGOODBUSINESS OPPORTUNITIES
The oil industry possessed huge profit potential and Rockefeller quickly
recognized it even at the early stage of the industry. And this shaped his
vision for his company taking a leading role in the industry, which he
eventuallyachieved.
An important success factor in business is to be able to recognize a good
businessopportunity when you seeoneandgo for it. Assessingabusinessidea tobesure it will beprofitable involveschecking if it carters fortheneedof
ahugepopulationofpeople, and if theproduct it offers isneededrepeatedly
and frequent ly.
FORMING PARTNERSHIP FOR SUCCESS
Workingandpulling resources together withotherpeople inpartnership canenableachieveourgoal fasterandeasier. etting intopartnership isagreat
way to leverageonotherpeoples talent, skill, energy, andmon ey, however,besurewearegoing intopartnershipwithpeople trust, andwith the termsofthe partnership known and agreed on by the partners and legallydocumented.
rom partnering with Clark, Andrews, and lagler, Rockefellers rise inbusiness was largely due to his going into partnership with other peoplepossessing the talent orfundingheneeded toaccessbiggerbusinesses.
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FOCUSINGON CORE BUSINESS
A lot of times business owners fall into the temptation of abandoning their
major business to try to make quick and seemingly easy money from other
businesses. Unfortunately, theyusuallyendup failingat both.
Without theknowledgeandexperience tosucceed, it isveryunwise to leave
yourcorebusinesswhere theyhavebuilt enormousexpertise to getting intoa
turf they are not familiar with. ont abandon core business because it is
havingproblemat themoment. Continue toworkon it;soonwewill discover
thesolution to thechallenge.
It best bet to achieving success in business is to remain focused on the
businessyouhaveadequateknowledge, experience, andexpertise in.
Exxons venturing intootherbusinesses thanoil in the s inresponse to
OPECs refusal to sell crude to the United States was a huge failure
billiondown thedrain.
CUTTING COST CANREMARKABLY INCREASE PROFIT
Cost cutting was Exxon
Corporations top strategy for remaining profitable in the face of falling oil
prices in the s and s. By 6, thecompanys operating cost had
beenreducedby . billionyearly, allowing it tomakeprofit of .5 billion
that year.
By following these strategies ExxonMobil became successful
company in the world and secured nd position in ortune 5 company
magazine.
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SEEKINGTO VERTICALLY INTEGRATE BUSINESS
As business grows, plan to vertically integrate it by investing in others
businesses that support yourcorebusiness. By , StandardOil Company
hadvertically integrated, owningbarrel-makingplant, dock facilities, a fleet of
railroad tank cars, warehouse in New York, and forest land for providing
lumber used in producing barrel staves all these other businesses were
supportingbusinesses to StandardOil Companyso peration.
LEARNINGBUSINESS BEFORE STARTING
aving a thorough knowledge of your business before investing time and
money into it ispivotal to thesuccessof thebusiness. It gives theknowledge
and the insight requires to deal favourably with the stakeholders in the
industryand torecognizeopportunitieswhen theycome.
Rockefellers success in his commodity trading
business can largely been attributed to his four year job with ewitt Tuttle
wherehe learnt all hecouldabout succeeding in largescale trading in the US.
COMM
ITTIN
GTO
IM
PRO
VIN
GYO
URO
PERATION
Business growth and success is achieved when you commit to investing in
developing and improving your operational facilities In 6 , Rockefeller
Andrews invested 6 , to improving andexpanding its plants capacity.
Thiswashugemoney, but it waswell worth it, as thecompanycould increase
its production to 6 carloads a day, thereby making more income and
attractingmore investments.
Byusingabove strategy Exxon Mobile isable to achieve Economies of
scaleand economies ofscope.
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ABOUT CHEVRON
Type Public
Industry Oil and gasoline
Mining
Founded 1879 as Standard Oil of California
Headquarters SanRamon,California U.S.
Areaserved Worldwide
Key people John S. Watson
(Chairmanand CEO)
Products Oil
Petroleum
Natural gas
PetrochemicalFuel
Lubricant
List marketing brands
Revenue US$163.52 billion (2010)
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STRATEGIES THAT CHEVRONFOLLOWEDTOBECOME
NUMBER- 3 COMPANY
STRATEGIES
y TEC NOLOGY AN EMERGINGENERGY
y VALUING SCIENCE
y ENVIRONMENT SA ETY
y NEW RESERVES TOMEETGROWING EMAN
TECHNOLOGYAND EMERGING ENERGY
Technology is propelling their growth. They're focusing on technologies thatimprove their chances of finding, developing and producing crude oil andnatural gas. Theyalsoare investing in thedevelopment of emergingenergytechnologies, suchas findingbetterways tomakenon food -basedbio fuels,integrating advanced solar technology into their operations and expandingtheirrenewableenergyresources.
VALUING SCIENCE
Castingasidehisoriginal misgivingsabout thevalueofscience inexploration,illman soon built a strong staff of geologists under the leadership of Eric
Starke. Usingascientificapproachbecameparticularlyvaluable inassessingCalifornia'ssoft subsurface formations.
illman'searliest oil andgasexplorationsuccessescameat Midway, where
the company made seven discoveries in an -month period, including the
largest, McNee No. 4, whichproducedarecord , barrelsaday in April. That same month, erby No. blew out with a daily flow of gas
estimatedat 6 millioncubic feet. On uly 4, McNee No. came inat ,4
feet, flowingat , barrelsadayandprompting illman tosendhis former
employerat OhioOil acable that read:
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"Canyoumatch it, ordo I take first place?" Twodays later, illman'squestion
wasansweredwhen thesamewell broke loose, at least doubling itsoutput.
ENVIRONMENTAND SAFETY
Asacompanyandas individuals, they takegreat pride incontributing to thecommunitieswhere they liveandwork. Theyalsocareabout theenvironmentandareproudof themanyways inwhich theiremployeeswork tosafeguardit. Theirpersistent efforts to improveon theirsafeworkenvironment continuetopayoff. In2009, Chevronmaintainedadays -away-from-work injuryrate thatisamong thebest in the industry.
NEWRESERVES TOMEETGROWINGDEMAND
After moving into the Los Angeles basin, red illman led his explorationteam in delivering five gushers at theEmery ield in theWest Coyote illsbetween ecember 912 and October 1913.Standard Oil Co. (California)scoredbig in ecember1913when it purchased theMurphyOil Co. holdingsinWest Coyote andEast Whittier. By 1917, Standard had added two othergreat Southern California discoveries in the Montebello and Baldwin No. 3fields. Thecompany'sefficiencyandability to findnewreserveshelped it keep
pace with the surging demand for energy products fuelled by the dramaticpopulation growth and increased reliance on automobiles throughoutStandard's marketing area. In anuary 1919, the company had the first ofseveral discoveries in Elk ills in California's San oaquin Valley. WhileStandard was compiling an impressive producing record, it also became aleader in conserving energy resources. Th e Starke gas trap, an inventiondevised by Standard engineer C.C.Scharpenberg and geologist Eric Starke,wasoneof themore ingeniousmethods for "capturing" gas froma well thatthencouldbeused tomeet energyneeds. Toservemarkets inareassuchasthe Northwest United States, Standard more than doubled its ocean -goingcapacity between 1912and 1916 by adding five tankers, the A. . Lucas, ElSegundo, Richmond, .A. Moffett and .G. Scofield. By1926, the fleet grew
to 40 vessels, including 22 ocean-going tankers as well as stern-wheelers,launches, barges and tugs. Standard saturated its marketing territory withsalesoutlets, tripling thenumberofsmall bulkplantsby theendof1916 andquadrupling the number of substations between 1911 and 1919.And , byturning fromhorse-drawnvehicles tomotor transport, thecompany increasedthespeedandrangeof itssalesoperations.
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GENERAL ELECTRIC
Type Public (NYSE: GE)
Dow Jones Industrial Average Component
Industry Conglomerate
Founded Schenectady, New York(1892)
Headquarters 3135 Easton Turnpike
Fairfield, Connecticut, U.S.
Areaserved Worldwide
Key people JeffreyR. Immelt
(Chairmanand CEO)
Products Appliances,Aviation, Consume,Electronics, Electrical
distribution, Energy, Entertainment, Finance, Gas,
Healthcare, Lighting, Locomotives, Oil, Software,
Water, Weapons, Wind turbines
Revenue US$156.77 billion (2010)
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STRATEGIES THATGE FOLLOWEDTOBECOME NUMBER- 4
COMPANY
SIX SIGMA STRATEGYTRAININGMENTORINGLEA ERS IPOCUSED IMPLEMENTATION
S OWMETHEMONEYEVERYBODY PLAYSIN RASTRUCTURE CONCENTRATION
THE STORYOF SIX SIGMAANDGE
GEs tryst with Six Sigma started in 1995 when CEO ackWelchmade it a
corporategoal tobea Six Sigmacompanyby 2000. He led from the front and
ensuredGEattained its Six Sigmagoalswithin thestipulatedperiod. Readon
to findout moreabout Six SigmaandGE.
General Electrics (GE) focus on quality started in the
late1980swith the launchof the Work-Out program that openedGEculture
to ideas from everyoneand everywhere. The resultant learning environment
prepared theground forSix Sigma.
Credit for the implementationof Six Sigmaat GEgoes to CEO ackWelch,
whomade it acorporatepolicy toattain Six S igmagoalsby2000. GEadopted
most of its Six Sigma concepts and methodology from pioneers such as
Motorola.
TRAINING
Six Sigma implementationat General Elect ricstartedwithaheavyemphasis
on training theworkforce fordata -basedproblemanalysis.
GE requiredall exempt employees toundertakea13-day, 100hour training
program in Six Sigmamethodologiesandcompletea Six Sigmaproject by the
endof1998.
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The trainingcovered theDMAIC procedure:
y Definitionoridentificationof theprocessy Measurement ofprocessoutputy Analyzingprocess inputs forcriticalityy Improvingprocessbymodifying inputsy Controllingprocessbycontrolling theappropriate input
Employeescompleting the initial coursewent through follow -up training to
reinforce thesenewlyacquiredskills.
MENTORING
Thesuccessstoryof Six SigmaandGEwouldnot havebeenpossiblewithout
GE'ssystemofmentoringprograms.
ull-time Master Black Belts, hired specifically for implementation of Six
Sigma, led theprocesschange. EachMasterBlack Belt trainedandmentored
keyprocessemployees for the Black Belt level. Employeesselected forBlack
Belt underwent four-month trainingandapplied Six Sigma toolsat workunder
the guidance of the Master Black Belt mentor. GE soon deployed full time
Black Belt teams to implement Six Sigmaprojects throughout GE.
Part timeproject leadersoremployeeswho received Six Sigma training thatwereplacedon Six SigmaprojectsonlybecameGreen Belts.
LEADERSHIP
General Electrics experience in the implementation of
Six Sigmashows that thebest of trainingandmentoringeffortswouldcrumble
without effective leadership.
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JackWelch, GEs CEO supported the Six Sigma initiative not just with the
necessary financial resources, but also through securing vital commitment
from both the senior executives and the workforce. Welch linked promotion
and bonus to quality improvement. orty percent of each top management
bonusdependedon thesuccessful implementationof Six Sigmagoalsanda
Green Belt became the minimum requirement for the promotion of anyemployee.
JackWelchandother topmanagement, most notablyDave Cote, President,
and CEOofGE Appliances followedahands-onapproach to Six Sigmaand
led from the front through the followingmethods:
y Spending time in Six Sigma Training sessions and personallyansweringquestions foremployeesundergoing training
y Surprisedvisits to Six Sigmareviewsessionsy Work-floor visits to make first hand observations on the extent of Six
Sigma implementationat theworkplace y Weekly summary reports and monthly reviews with the Master Black
Belt team.
FOCUSED IMPLEMENTATION
Onemajorreason for thesuccessstoryof Six SigmaandGE is the focused
approach toward implementation.
GE's three time-tested implementationapproachesare "ShowMe theMoney,"
"Everybodyplays," and "SpecificTechniques."
y S owMetheMoney-GEapproaches Six Sigmawitha focuson thebottom-line. The need to cut costs in a competitive price-sensitivemarketplacemadeGEapplies Six Sigma toremoveworkplacedefectsand improveproductivity, besides improvingproduct quality.
y E erybody Plays-MuchofGEsproduct linesarecomprisedofmany
outsourced parts.GE
understood the need for the supplier toparticipate in the Six Sigma initiative to make the product fully SixSigmacompliant and invested inbringing thesuppliers to Six Sigma.
y Specific Techniques -GE cultivated the art of ranking projects andaligning them to the business goals through Six Sigma tools such astheprocessmap
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Concentration (Infrastructure) OneofGEsalternatives is to implement aconcentrationstrategy foroneof itsbusiness within the overall Corporation. One of the best businesses toconcentrateon is Infrastructure. InfrastructurecurrentlymakesmoreprofitforGE thenanyof theirotherbusinesses. Byconcentrating theireffortsand
resources toward Infrastructure, GE can make theirbusiness even stronger.By working to improve the weaknesses that they are currently experiencing,GE could turn Infrastructure into a powerhouse for the company. That way,GE Infrastructurecancompeteagainst othercompanies that focussolelyonthe products and services that they offer. or information on how thisalternativewasanalyzedusingvariousdimensions,
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Industry Banking
Financial services
Investment services
Key people Charles O. Holliday
(Chairman)
Brian Moynihan
(President and CEO)
Headquarters Charlotte, North Carolina
Areaserved Worldwide
Products Financeand insurance,Retail banking, Commercial
banking, Investment banking,
Investment management, Private banking, Private
equity, Mortgages, Credit cards.
Revenue $150.45 billion (2010)
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STRATEGIES THATBANK OFAMERICAFOLLOWEDTO
BECOME NUMBER- COMPANY
DELIVERY OF A BROAD RANGE OF PRODUCTS AND
SERVICES
Global Consumer and Small Business Banking (GC&SBB) is the largest
division in thecompany, anddealsprimarilywithconsumerbankingandcredit
card issuance. Now it deals also withprovidedmergers and
acquisitionsadvisory, underwriting, capital markets, aswell assales & trading
in fixed incomeandequitiesmarkets. Itsstrongest groups include Leveraged
inance, SyndicatedLoans, andmortgage-backedsecurities. It alsohasone
of the largest research teamson W
all Street.
It has five primary lines of business: Premier Banking & Investments
(including Bank of America Investment Servi ces, Inc.), The Private Bank,
amilyWealth Advisors, and Bank of America Specialist. B of Ameri
si e, scale and global presence enable it to provide customers and clients wit a full
range of world-class products and services, delivered wit convenience and
efficiency.
LOCALTOGLOBAL
Bank of America serves clients in more than 150 countries and has a
relationship with 99% of the U.S. ortune 500companies and 83% of the
ortuneGlobal 500. Expanding internationally isagreat opportunity for Bank
of America. Through its expansion in developing countries like India and
China, helps in increasing revenue. Bank of America is always working to
improvesatisfaction, reduceproblemsandcreatesolutions. Bankof America
is attracting and retaining associates who can lead ina global organization,
and is building on leading staffing, training and leader ship development
programs. As Bank integratesbusinesses, it meansbringing togetherawide
spectrumofproductsandservices forcustomersandclientswhile improving
quality, accuracyandefficiencyand loweringcosts. Investment in technology
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and innovation to improve productivity andbetter meet associate, customer,
client andshareholderneeds
MERGERANDACQUISITION.
Mergershelped BankAmerica Corporation toonceagainbecome the largest
U.S. bank holding company in terms of deposits, but the company fell to
second place in 1997 behind fast-growing NationsBank Corporation, and to
third in1998behind North Carolina's irst Union Corp.
BankAmerica'snext bigacquisitioncame in1992. Thecompanyacquired its
Californiarival, Security Pacific Corporationand itssubsidiary Security Pacific
National Bank in California and other banks in Arizona, Idaho, Oregon,
andWashington BankAmericaacquired the Continental Illinois National Bank
andTrust Co. of Chicago.
TECHNOLOGYADVANCEMENT
Technology will also be a major emphasis amongst financial service
companies as it provides a new outlet to consumers all across the globe.
Howeffective the Internet will beremains tobeseen, but it isalreadycausing
majorchanges. Thosecorporations that canmakee-commercesucceedwill
besuccessful and those that cannot will facemajorobstacles. Thecredit card
industryalonewill providebillionsofdollars in income through the Internet for
financial companiesand therewill bea lo t ofcompetition.
CREATINGRELATIONSHIP
Bank of America seeks to build broad, deep and long-lasting relationshipswith its customers by providing a full range of banking, investing and
insurance products and services, and to create value for customers by
delivering financial solutions within the context of each customer's complete
banking relationship and financial situation, as one company with one
customer experience. Middle-market and large corporate clientsalso benefit
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from the company's relationship-based approach, with client managers
coordinatingdeliveryofabroadrangeofproductsandservices, including (but
not limited to) commercial lending, treasury management, debt and equity
capital rising, risk management and mergers and acquisitions advi sory
services.
AGGRESSIVE MARKETING
The Bank has todo aggressive marketing andalso have to provide various
promotional schemes tocatertheneedsof thepeople.
Bank of America is affected directly by market conditions. or example,
changes in interest rates could adversely affect net interest margin - the
differencebetween theyield thebankearn sonassetsand the interest rate itpays for deposits and other sources of funding - which could in turn affect
earnings. Market risks include fluctuations in interest and currencyexchange
rates, and equity and futures prices. Such risks affect loans, deposits,
securities, short-termborrowings, long-termdebt, tradingaccount assetsand
liabilities, andderivatives.
PRODUCT INNOVATION
Bank of America is dominated greatly by product innovation. Technology is
the main factor that is dominating the industry. Bank also provides wide
varietyofproductsandservices. Various typesof accountsandcredit cards
areprovidedby Bankof America. The Bank isalsoaffectedbydemandand
thesupplyconditionsprevailing in the industry. Bankof Americaalsoenjoys
economiesofscaledue to itsstrong learningandexperienceeffects.
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Type Public (NYS COP)
Industry Oil and Gasoline
Founded August 30, 2002 (merger)
1875 (Conoco)
1917 (Phillips)
Headquarters Energy Corridor
Houston, Texas U.S.
Area served Worldwide
Keypeople James J. Mulva
(Chairman & CEO)
Products Oil & Natural Gas ,Petroleum
Lubricant
Petrochemical
Revenue
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STRATEGIES THAT CONOCO PHILIPS FOLLOWEDTO
BECOME NUMBER- 6 COMPANY
Success inbusiness isachievedby theapplicationofeffectivestrategies. And
the good thing is that with a little modification one can make use of the
winning strategies of one business to achieve the same success in theirs.
This is irrespectiveofdifference in timeandgeography.
Herearestrategieswhich ConocoPhillipshave implemented in thecourseof
theirhistory, andwhichhaveenabled them toachieve theirgoalsandbecome
oneof thebiggest companies in theworld.
IDENTIFYINGA PROBLEMAND PROVIDING SOLUTION
Theability to identifyapressingneed that is facedby lotsofpeople, and then
set up a business to provide the needed solution at affordable price is the
foundation of business success. Business is not an organization set up
primarily to make money, but to offer solution to an identified problem at a
cost theconsumercanafford.
The more the number of people needing the solution, and the more their
frequency of needing it, the greater and more consistent your business will
thriveandmakemoney.
Conocos business was an immediate success right from its inception
because it providedahugerelief to themasses inOgden, Utahwhocouldnot
purchase kerosene to light their homes because it was too expensive. By
noticing thisproblemandgoingahead to fixing it immediatelyput Conocoon
thepathofsuccess.
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SEEKING SYNERGYWITHOTHERBUSINESSES
Two heads are always better than one. Combining resources with other
businesses can enable you to easily and quickly achieve your goals. Its agreat way to leverage on other businesses expertise, experience and
facilities.
Therearedifferent ways throughwhichsynergycanbeobtained. It canbeby
formingpartnership, orbyacquiringormergingwithotherbusinesses.
rommergingwith StandardOil, DuPoint, Phillips, and Burlington Resources,
seeking synergy has always been Conocos vital strategy for achieving its
businessgoals.
GROWINGYOURBUSINESS AS QUICKLYAS YOU CAN
You shouldnt remain offering one product or service for too long. There
should be other related products you can create or acquire and grow your
business quickly. Relying on a single product offering is dangerous to your
business as your income could suddenly freeze if the product goes out of
need.
Apart from kerosene, which it started business with; Conoco alsosoldother
products, suchasbenzene tocleanstoves, candles, hoofoil forhorses, and
ready-mixedpaintsat theearlyyearsof itsexistence.
Then recognizing thesurge in thenumberofautomobilesonroads, Conoco
knew it wouldbeprofitable running refineriesandservice stations toprovide
fuel forautomobiles, and thereforemergedwithMarlandOil in1929.
DOINGWHATYOUNEEDTODO
oryourbusiness tosurvivedifficult times, youmust have thecourage to take
certaindecisions, whichmaynot bepopular, but needed tosave thesituation.
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In the wake of the stock market crash of 1929, Conoco had to cut down
salaries, amongst othermeasures that it took to salvage thesituation. Though
these were tough decisions, theyhowever helped tosave lots of money for
thecompany, whichwasused to finance important projects.
REWARDINGYOUR STAFFAPPROPRIATELY
Just as you shouldnt hesitate to cut staff salaries in d ifficult times, you
shouldnt alsohesitate to lavish themwith incentivesandbonuseswhenyour
business isdoingwell.
ew years after the stock market crises of 1929 that made Conoco to cut
downonstaffsalaries, thecompanysstaffwasrewardedwithbonuschecks
worth 770,000 in1937when Conococameback toprofitability.
EXPANDTOFOREIGNLANDS
Themore thenumberofpeopleneedingyourproduct orservice, themore
yourbusinessprospers. Youneed to findawayofexposingyourproduct or
service to the international market, andyouwill besurprised to findyour
product couldevenbemoreaccepted in foreign lands thanat home.
Expanding tomarketsoutsideyourlocal operationshouldbeprepared forand
shouldbe inyourbusinessplan. Today, withh ugeadvancement in
communication technology it hasbecomea lot easiertoexposeyourbusiness
to theglobal market using Internet technology.
Theerabetween1945 and1972saw Conocoexecutingagreat deal of its
expansionist plan, expanding itsrefineryoperationsnationally, and its
petroleumexplorationandproductionoperation internationally.
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AT&T
Type Public (NYSE: T)
Dow Jones Industrial Average Component
S&P 500 Component
Industry Telecommunications
Founded October 5,1983
Headquarters Whitacre Tower
Dallas, Texas, United States
Areaserved Worldwide
Key people Randall L. Stephenson
(Chairman, President and CEO)
Services Telephone
Wireless
Internet
Television
Revenue US$124.280 billion (2010)
Employees 294,600 (2010)
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STRATEGIES THATHELPEDAT&T INACHIEVING
ECONOMIES OF SCOPE AND ECONOMIES OF SCALE
ACQUISITIONOFMANYOTHER COMPETITOR COMPANIES INTHE
MARKET
Isbiggernecessarilybetterwhen it comes torunninga telecommunications
company? Apparently AT&T thinksso inannouncingplans tobuy BellSouth,
theprimaryphoneandbroadbandproviderin the Southeast, for 67billion.
Thecompanyacquired BellSouthand CingularNetworks to increase itssize
and tocut competition. A decadeago, when thereg ional Bell companieswere
thenation'smainprovidersof telephoneservice buyingacompetitorwas
easiertoexplain. Addingphonecustomersmeant morerevenue, economies
ofscaleonequipment andnetwork investment, and theability tocut
overlappingadministrativejobs.
ATELECOMMUNICATIONS SUPERMARKETAS IT CAN SELL MORE
SERVICES WHETHER PHONE, BROADBANDORTELEVISION TO
CUSTOMER EVERYWHERE
Tocompete inan Internet economy, AT&Texecutivessay thecompanyhas
tobecomea telecommunicationssupermarket so it cansell moreservices
whetherphone, broadbandortelevision tocustomerseverywhere.
AT&T'schairmanandchiefexecutive, EdwardE. WhitacreJr., saidonacall
withanalystsyesterday that themerger"will createastrongnational and
global competitor, betterpositioned to innovateanddelivernewservices to
bothbusinessesandconsumers.Tomerge itsbusinesses, thecompanywill
buynewnetwork technology that integrateswirelessandwirelinephonesso
that customers, amongother things, will beable touseonehandset that runs
onacellularnetworkoutdoorsand thenswitch toawireless Internet
connection indoors.
Thesekindsofservicesareparticularly important tobigcorporateclients thathave thousandsofcorded telephones, mobilephonesand Internet lines.
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VOLUME DISCOUNTS AND EXPERIENCE CURVE EFFECTS
It is true that largeserviceproviderscanachieveeconomiesofscale through
volumediscounts, experiencecurveeffects, andconsolidateoperationsat a
scale that minimizesunit costs, saysWeinman. A volumediscount isa
methodusedbysellersandmanufacturers toreward thosewhoareable to
purchase inbulkamountsorinmassquantities.
CONSOLIDATE OPERATIONS ATA SCALE THATMINIMIZES UNIT
COSTS
Different taskscanbeclubbed togethersoas tominimize thecost andwhich
are linkedwitheachother. As is thecasewithmost companyacquisitions, AT&T Inc.'sdeal toacquireDeutscheTelekom AGsubsidiaryT-Mobile USA, couldmeanconsolidationsat the twocompanies'call centres,
headquartersandretail operations.As Co StarGroup Inc. reportedWednesday, T-Mobile USA isa tenant in
5,100 locationsnationally, and AT&Thasabout 4,600 locations. Themergercouldmeanoneorbothcompanieswill shedsomeof those locations. AT&T
hassaid it expects tosave 3billion inconsolidationofoperationsover thenext threeyears.
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FORD MOTORS
Type Public (NYSE: F)
Industry Automotive
Founded June 16,1903
Headquarters Dearborn,Michigan, U.S.
Area served Worldwide
Key people William C. Ford, Jr.
(Executive Chairman)
Alan R. Mulally
(President & CEO)
Products Automobiles
Automotive parts
Services Automotive finance
Vehicle leasing
Vehicle service
Revenue US$128.954 billion (2010)
Employees 164,000(2010)
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STRATEGIES THATHELPEDFORDMOTORS INACHIEVING
ECONOMIES OF SCOPE AND ECONOMIES OF SCALE
FOCUS ONAUTOMOBILE DESIGNANDMANUFACTURING
During the mid to late 1990s, ord sold large numbers of vehicles, in a
booming American economy with soaring stock market and low fuel prices.
With thedawnof thenewcentury, legacyhealthcarecosts, higher fuel prices,
and a faltering economy led to falling market shares, declining sales, and
sliding profit margins. Most of the corporate profits came from financing
consumerautomobile loans through ordMotorCredit Company.
By2005, corporatebondratingagencieshaddowngraded thebondsofboth
ord andGM to junk status, citing high U.S. health care costs for an aging
workforce, soaringgasolineprices, erodingmarket share, anddependenceon
declining SUV sales forrevenues. Profit marginsdecreasedon largevehicles
due to increased "incentives" (in the formofrebatesor low interest financing)
tooffset decliningdemand.
In the faceofdemand forhigher fuel efficiencyand fallingsalesofminivans,
ordmoved to introducearangeofnewvehicles, including "Crossover SUVs"
built onunibodycar platforms, rather than morebody-on-framechassis. Indeveloping the hybrid electric powertrain technologies for the ord Escape
Hybrid SUV, ord licensedsimilarToyotahybrid technologies toavoidpatent
infringements ord announced that it will team up with electricity supply
company Southern CaliforniaEdison (SCE) to examine the future ofplug-in
hybrids in termsof howhomeandvehicleenergy systems will workwith the
electrical grid. Under the multi-million-dollar, multi-year project, ord will
convert ademonstration fleet of ordEscapeHybrids intoplug-inhybrids, and
SCE will evaluate how the vehicles might interact with the home and the
utility's electrical grid. Some of the vehicles will be evaluated "in typicalcustomersettings," according to ord.
History Since the ordMotorCompany's incorporationbyHenry ord in1903,
itsstrategic focushasremainedonautomobiledesignandmanufacturing. Up
until 1970, competitionwas from the twoothermanufacturersmakingup the
BigThree Automakers;General Motorsand Chrysler. However, starting in the
1970's, foreigncompetition, mostly fromToyotaandHonda, eventually lead to
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overcapacitywithin the industry. Asmoreandmoredevelopingand industrial
nationsencourageddevelopment into theautomobile industry, overcapacity in
theautomobilemarketsreachedanestimated20millionvehicles.
PROVIDES WIDE RANGE OF PRODUCTS
Ford isoneof fourmanufacturers in NASCAR's threemajorseries: Sprint Cup
Series, Nationwide Series, and Camping World Truck Series. Major teams
include Roush Fenway Racingand Yates Racingand Richard Petty
Motorsports. Ford is represented by the mid-sizeFusion in the Sprint Cup,
theMustang in the Nationwide Series, andby the F-150 in the CampingWorld
Truck Series. Some of the most successful NASCAR Fords were the
aerodynamic fastbackFord TorinoandMercury Montegos, and the aero-
eraFord Thunderbirds. The Ford nameplate has won eight manufacturer's
championships in Sprint Cup, whileMercuryhaswonone. TheFordFusion is
also used in the ARCA Remax Series. It also manufactures FormulaOnecars, Rally, sportscars, touringcars, trucks, busesand tractors.
SAVING POWER COST AND REDUCED CARBON FOOTPRINT
THROUGH POWERMANAGEMENT
OnMarch2010, Fordannounced its PC PowerManagement systemwhich it
developedwith Night Watchmansoftware from1E. Thecompany isexpected
to save 1.2m on power cost and reduce carbon footprint by an estimated
16,000 to25,000metric tonsannuallywhen thesystem is fully implemented.
PC power management isbeing rolledout toall Fordcomputerusers in US
thismonthand it will beused inFordoperationsaround theworld later in the
year. Computerswith thispowerprofileenabledwill monitoritsusagepatterns
and decides when it can be turned off. PC user will be alerted of the
approachingpowerdown timeandgiven theopportunity todelay it.
According to company reduction in carbon footprint and power cost will be
achievedbydeveloping'PowerProfiles' forev ery PC in thecompany.
ENVIRONMENTAL INITIATIVES
Fordannounced in late2008July that it will bringsixof itsmore fuel -efficient
Europeanmodels to the U.S.
Compressednatural as
Thealternative fossil fuel vehicles, such as some versions of the Crown
Victoriaespecially in fleet and taxi service, operate on compressed natural
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gasor CNG. Some CNG vehicles have dual fuel tanks - one for gasoline,
theotherforCNG - thesameenginecanoperateoneither fuel viaaselector
switch.
Flexiblefuel ehicles Flexible fuel vehicles aredesigned tooperatesmoothlyusingawiderangeofavailableethanol fuel mixturesfrom pure gasoline, tobioethanol-gasoline
blends such asE85 (85% ethanol and 15% gasoline)
orE100 (neat hydrousethanol) in Brazil. Part of the challenge of successful
marketingalternativeand flexible fuel vehicles in the U.S., is thegeneral lack
of establishment of sufficient fueling stations, which would be essential for
these vehicles to be attractive to a wide range of consumers. Significant
efforts torampupproductionanddistributionofE85 fuelsareunderwayand
expanding.
Ford isalsoplanning toproduce250,000E85 -capablevehiclesayear in the
US, adding tosome1.6 millionalreadysold in the last 10years.
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J. P. MORGAN CHASE
Type Public (NYSE: JPM)Dow Jones Industrial Average Component
Industry BankingFinancial services
Founded New York City, New York (1799)
Headquarters New York City. New York, U.S.
Area served WorldwideKey people Jamie Dimon
(Chairman, President & CEO)
Products Finance and insuranceConsumer bankingCorporate banking
Investment bankingGlobal wealth managementMortgage loans
Credit cards
Revenue US$ 102.694 billion (2010)
Profit US$ 17.370 billion (2010)
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Demandandmaintainstrongfinancialdiscipline, buildingfor
good andbadtimes:
Financial discipline is a bedrock of great companies, particularly financialcompanies .Financial discipline including sound accounting standards,transparent public report ing and great management information systems leads to high-quality earnings that are recurring and predictable in nature;yields high returns on capital; produces good margins; and providesreasonableriskrelative to thecapital deployed.
Financial discipline must be matched with superiornot just averagerisk
management. If we properly manage risk, we should get a good return
through thecycle, not just during thegood times. Wemust cons iderwalking
away from business where we cannot see a fair return over the cycle. This
mayslowshort-termgrowth, but it underscoresourcommitment togrow ina
sustainableway. It isa trade-offwewill alwaysbeprepared tomake.
The Companywasnot hi t byrecessionassaidThroughout the financial crisis,JPMorgan Chasenever posteda quarterly loss, served as a safehaven for
depositors, worked closely with the federal government, and remained an
active lender toconsumers, small and largebusinesses, government entities
and not-for-profit organizations. As a result of our steadfast focus on risk
management andprudent lending, andourdisciplinedapproach tocapital and
liquidity management, we were able to avoid the worst outcomes
experiencedbyothers in the industry.
Maintainastrongsystemofinternalgovernanceand controls:
Good internal governance is essential to effective management. It tiestogether all our businesses worldwide with a common set of rules,
expectations and oversight activities. These help safeguard our reputation,
which we believe is one of our most important assets, and align thecompanys performance with the best interests of our shareholders. Some
codeofEthicsaregivenbelow :
y Engage in and promote ethical conduct, including the ethical handling ofactual orapparent conflictsof interest betweenpersonal andprofessionalrelationships, and to disclose to theOffice of the Secretary any materialtransactionorrelationship that reasonablycouldbeexpected togiverise t o
suchaconflict.
y Carryout yourresponsibilitieshonestly, ingood faithandwith integrity, duecareanddiligence, exercisingat all times thebest independent judgment.
y Assist in the production of full, fair, accurate, timely and understandabledisclosure in reportsand documents that the firm and its subsidiaries filewith, or submit to, the Securities and Exchange Commission and otherregulatorsand inotherpubliccommunicationsmadeby the firm.
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HEWLETT PA ARD
Indust ute ha dwa e
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ounded Palo
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STRATEGIES THATHEWLETT PACKARDFOLLOWEDTO
BECOME NUMBER- 1 COMPANY:
HP isa technologycompany that operates inmore than170countriesaround
the world. We explore how technology and services can help people and
companies address their problems and challenges, and realize their
possibilities, aspirations and dreams. We ap ply new thinking and ideas to
create more simple, valuable and trusted experiences with technology,
continuously improving the way our customers live and work.
No other companyoffers as complete a technologyproduct portfolioas HP.
We provide infrastructure and business offerings that span from handheld
devices tosomeof theworld'smost powerful supercomputer installations. We
offer consumers a wide range of products and services from digital
photography to digital entertainment and from computing to h ome printing.
Thiscomprehensiveportfoliohelpsusmatch theright products, servicesand
solutions to our customers' specific needs.
Globalbusinessstrategy
Global citizenship is one of HPs corporate objectives, a commitment
spanning our entire organization and rooted in values that have guided the
companysince it was founded. Forover70years, thiscommitment hasdriven
us tomeet higherstandardsof integrity, contributionandaccountabilityaswe
alignourbusinessgoalswithourimpactsonsocietyand theenvironment. HP
is in a unique position to make meaningful and lasting contributions to
improve peoples lives and work.W
e regularly communicate and meet withstakeholders to respond to their feedback, express our views, gain insights,
sharebest practices, shapestandardsand influencepublicpolicydiscussions.
Inall matters, wearecommitted tocarryingout engagements ina transparent
and appropriate way .Our global citizenship efforts span a broad range of
areasfrom ethics and compliance, environmental sustainability and
education to responsible supply chain management, privacy and social
innovationasdetailedby thisreport.
Therecent economicdownturn, combinedwithpowerful social, d emographic
and environmental forces, is creating unprecedented challenges and
opportunities for individuals, communities, companiesandgovernmentsalike
Issues such as meeting the resource needs of a fast-growing global
population, mitigating the effects of climate change, managing rapidly
increasing volumes of information and opening up educational opportunities
forall cut across industries, economiesandbordersandrequirenew levelsof
leadership, innovationandcollaboration.
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HavingBigBusinessHousesas Customer:
Walt Disney was the first customer of HP. The companyhas tie with SAP ,
ORACLE , Microsoft etc.
In Australia, abankuses theHP CarbonFootprint Calculator toevaluate the
greenhousegasemissions frompowering itsprintersand PCs. In Singapore,
asales teamgathers inan HP Halo solutions room rather thanboardingan
airplane to meet with colleagues in Germany. In Canada, a nonprofit
organization taps into HP cloud computing technology to developa solution
that reduces the time for manufacturers to trace and remove recalled food
products from thesupply chain. In the United States, anurse ina Veterans
Affairs hospital scans bar codes created by the HP Patient ID system to
ensure patients receive the correct medication. And in India, Lithuania and
Nicaragua, teachers and students use HP Tablet PCs to connect and
collaborate, opening up new avenues for learning. In these and countless
otherways, HP products, servicesandsolutionsareprofoundlychanginghow
theworld livesandworks.
Long history of doing theright thing: since 19 7, HP hashaddefined
CSRvalues:
RecentlyHP Pledge1million US in INDIA forScienceandTechnologyand
MathEducation. HP was first to introduced greenhouse emission reduction
program. Ourcommitment to Social Innovationandeducationstretchesback
more thansixdecades. HP focusesonprogramsandorganizations that help
educatorsbuildskillsanduse technology toenhance lessonsandre -imagine
theirapproach to teaching. Wehelpeducators combineexcellent instruction
with the unique capabilities of technology to transform the learning
experience.
HP awardsgrantsofcash, HP technologyandotherresources toprimaryand
secondarypublicschools, colleges, anduniversities. Evidence shows that the
effectiveuseof technology, combinedwithexemplary teaching, canpositively
impact student academic outcomes, and create a more engaging,
personalized and collaborative learning environment. Since 2000, HP has
providedmore than 250million in funding, equipment and training tosupporteducation, including 60million forourHP Technology. Part ofouremphasis
on education is cultivating tomorrows entrepreneurs. HP works with
organizations to help young people acquire the IT skills and knowledge
required to succeed in the workforce, launch new business and help
communities toprosper.
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Employees are supported as they try new approaches, even
whentheyfail;
Our employees are integral to the success of our business. Their talent,expertise and skills drive everything from how we innovate products and
manageoursupplychain tohowweconnect withcustomersandcollaborate
with partners. Recruiting and retainin g the best people is a key competitive
advantage, andwestrive tocreateasupportive, motivatingworkenvironment
where all employees can flourish. Much of our focus in 2009 was on
integrating those who joined HP through the acquisition of EDS, which
increasedournumberofemployees to304,0001. Thissectionrepresentsour
combinedworkforce. Insomecases, thismakes it difficult tocomparedataor
progress in2009withpreviousyears, whichwehavenoted. Ouremployment
policies apply globally and reflect our commitment to fair treatment of allemployees wherever we operate. At a minimum, we comply with local laws,
but ourownpoliciesoftenset amoredemandingstandard:
VariousdivisionofHP:
y Personal systemsHP is the worlds leading vendorof personal computers,
shippingover 50milliondevicesannually. And thats just onesegment ofour
personal systems offering. We have the industrys broadest portfolio of
notebooks, desktops, workstations, thin clients, displays, handheld devices
andpersonal storagesolutions.
y Imaging and printingThe worldwide leader in inkjet and laser printing for
over 20 years, HP is advancing the digital transformation of printing while
offering customers new ways to be creative, save money, improve
productivity, andstandout.
y Enterprise BusinessHP helps large organizations establish strategic
advantagesbycreatingecosystems that use technology torespondefficiently
to dynamic conditions in real-time. Our solutions use HP servers, storage,
software, networkingandservices tocreateorstrengthenbusiness elasticity,
insight andsustainability.
y ServicesHP is the second-largest IT services company in the world, giving
us the scale and scope to manage customers' most critical business
technology needs. We offer one of the industry's broadest portfolios of
technology services, including applications services, infrastructure services
andbusinessprocessoutsourcing.
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BIBLIOGRAPHY
Textbook
1. DereskyHelen: International Management: Managing Across Boardersand Culture, PearsonEducation, 2003.
2. Paul J: International Business, Prentice-Hall, 2004.
Website
BankAmerica Corp.," WallStreetJournal, February 4, 1993, p. B6.
BankAmericaEnvironmental Progress Report, BankAmerica Corporation,
1992.
Successprincipleonline.com
y www.walmart.com
y www.exxommobil.com
y www.ge.com
y
www.hp.comy www.chevron.com
Othersources
y Companysannual report
y Magazines
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