Characteristics of Fortune Global 500_Assignment-2_Akhil and Namuun

8/2/2019 Characteristics of Fortune Global 500_Assignment-2_Akhil and Namuun

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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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Characteristics of Fortune Global 500_Assignment-2_Akhil and Namuun