Characteristics of fortune 500 companies

April 11, 20231

Characteristics of Fortune 500

Group 1:

Tae-Wooing Park

Abhay Agarwal

Pengna Chen

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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

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1. Introduction of Fortune 500 1. Introduction of Fortune 500

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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

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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.


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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.


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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

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Top 10 Brands on Fortune List 2010

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2. Ranking Factors of Fortune 500

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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

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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

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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.

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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, accounts receivable, inventory, office equipment, and property.

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Earnings Ranking

Earnings

= Revenues – Cost of Sales – Operating Expenses – Taxes

Earnings are often the single most important determinant

of a corporation's stock price.

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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#

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3. Country by Country Analysis 3. Country by Country Analysis

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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

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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

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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%)

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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

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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

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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)

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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

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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

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The continuously promising country is China.

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The number of Indian company is increasing.

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The number of American company is decreasing.

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The number of South Korean company is decreasing since 2008.

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4. Characteristics (12) of Companies on Fortune List 4. Characteristics (12) of Companies on Fortune List

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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.”

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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

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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.

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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

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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.

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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

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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.

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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

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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.

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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.

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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

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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.

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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

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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.

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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.

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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.

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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

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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.

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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%

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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

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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.

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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

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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

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Thank You!

Characteristics of fortune 500 companies

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