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Characteristics of Fortune Group 5: Global 500 Usukh Ochir Namuun

Akhil Agrawal

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 ‡ ‡ ‡ ‡


Introduction of Global Fortune 500

‡ 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.

What is it?

‡ This list ranks only public companies, or those which have issued securities through an offering and which are traded on the stock market. ‡ 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.

What is it?

and a move up the list generally signals good news. 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.

‡ 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.‡ It shows the snapshot of USA. China and Japan¶s commercial progress. ‡ Act as a evaluation criteria for evaluating company¶s performance Influence of Fortune 500 . where the money has gone and how it¶s moved to new industries over time.

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.

Growth by Revenues Growth by Profits Top companies: Fastest Growing .

Top companies: Most profitable .

Top companies: Biggest employers .

Top companies: Movers .

Top 11 countries with the most Global 500 companies .

Top companies in South Korea .

900 34.837 58.945 26.046 26.450 28.Country Company Rank 1 2 3 4 5 6 7 8 Indian Oil Reliance Industries Bharat Petroleum State Bank of India Hindustan Petroleum Tata Motors Oil & Natural Gas Tata Steel Global 500 rank 98 134 272 292 336 359 361 370 Revenues ($ millions) 68.065 Top companies in India .102 32.593 27.

Japan China India South Korea Comparative analysis of # of companies in TOP countries .180 160 140 120 100 80 60 40 20 0 2006 2007 2008 2009 2010 2011 U.S.

Ranking factors .

Sales Growth Ranking 2.1. Capitalization Ranking 4 main factors . Assets Ranking 3. Earnings Ranking 4.

Sales Growth Ranking . ‡ Companies on the Fortune 500 list typically exhibit more than one success measure that may be important for competitors to emulate. the firm is obviously outperforming the market due to some process within the company.‡ When a company's sales grow faster than the general economy in the markets in which the firm operates.

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 Sales Growth Ranking .

‡ An asset is any item of economic value owned by the corporation. and property. including cash. securities. Assets Ranking . office equipment. inventory.‡ Companies listed on the Fortune 500 usually have large and growing asset balances. accounts receivable.

‡ Earnings are often the single most important determinant of a corporation's stock price. ‡ Earning = Revenue ± (Cost of Sales + Operating expenses + Taxes) Earnings Ranking .

‡ Capitalization = long-term debt + stock + retained earnings ‡ It may also be called invested capital. it is possible to determine the market price of an entire company or its market capitalization. ‡ By multiplying the number of shares outstanding by the price per share. Capitalization Ranking .

Characteristics of Fortune 500 companies .

Consistent Vision . ‡ Proper articulation of vision across the organization 1.‡ Everyone on the management team shares the same clear vision of where the company is heading and should be head in future.

partnership and performance Vision of top fortune 500 companies . At the heart of The Chevron Way is our vision to be the global energy company most admired for its people.To become worldwide leader in retailing Exxon Mobil Corporation is committed to being the world's premier petroleum and petrochemical company.

2.‡ Great emphasis on developing leadership excellence in the company ‡ Develop leadership among employees by providing learning opportunities to them. Leadership Development .

Example of leadership development .‡ 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.

‡ Some of the values are: ‡ ‡ ‡ ‡ ‡ ‡ Integrity Fairness Customer satisfaction Sustainable growth Innovation Respect 3. customers. Strong values .‡ All fortune 500 companies have strong values which they followed continuously ‡ Most important generating trust among shareholders. society and government.

and employees.‡ Microsoft: ‡ Integrity and honesty ‡ Passion for customers. ‡ Self-critical. Core values of top fortune 500 companies . questioning. shareholders. ‡ Willingness to take on big challenges and see them through. ‡ Accountable for commitments. partners and technology ‡ Open and respectful with others and dedicated to making them better. results. partners. and quality to customers. and committed to personal excellence and self-improvement.

It¶s best to do one thing really. . Fast is better than slow. Democracy on the web works. really well. ‡ We believe in the simple. not the complex. You can make money without doing evil. ‡ Apple: ‡ We believe that we¶re on the face of the Earth to make great products. ‡ We believe that we need to own and control the primary technologies behind the products we make. ‡ We believe in deep collaboration and cross-pollination of our groups Values contd.‡ Google: ‡ ‡ ‡ ‡ ‡ ‡ Focus on the user and all else will follow. You don¶t need to be at your desk to need an answer.

to the business.‡ Employees are treated as though they are partners. 4. Empowerment . ‡ The organization expects a lot from every employee. not slaves. but is willing to help employees do their job with minimal barriers.

5.‡ 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. Customer satisfaction .

‡ Produces high quality goods and services all the time. quality relationships and to build quality products. 6. ‡ 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. Commitment to Quality .

Ethics .‡ The company expects all employees to be ethical and to act on a daily basis in a way that is consistent with this belief ‡ Creates proper guidelines and code of conduct 7.

‡ 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. Effective Communication .‡ Management knows that communication is the oil that keeps the company operating smoothly. 8.

‡ Companies understands that teamwork is most important factor to increase employees productivity satisfaction and relationship with each other. 9. self-confidence encouragement and leadership. patience. Teamwork . ‡ Companies appreciates different people with different ideas. individuality.

‡ Wal-Mart: ‡ Important value of Wal-Mart ‡ Company considered itself as a group of dedicated. hardworking. Example of teamwork . ordinary people who have teamed together to accomplish extraordinary things.

Stories of some fortune 500 companies that started with next to nothing. .

Apple continues to grow and prove to be a wise investment . Apple .‡ It was started in the garage of a young man by the name of Steve Woznaick ‡ Convince local electronic to buy first PC ‡ Both woznaick and Jobs penniless at the time. 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 35 on the Fortune 500. went to a local computer parts supplier and ordered parts on credit. ‡ Though the company has had its ups and downs in its 30year history.

‡ Throughout the 20th Century Nordstrom grew from the one shoe store in downtown Seattle to what is now a multi-billion dollar retail empire. just 14 years after coming to America. a 16-year-old boy form Sweden left his home and took manual jobs to survive.000. ‡ In 1901. Nordstrom opened his first shoe store. the 26-year-old Nordstrom was able to save nearly $13. Nordstorm . ‡ After struggling for ten years.‡ In 1887.

000 investment. the company produced the first computer of its own design. ‡ In 1985. ‡ While attending the University of Texas in 1984. Michael Dell founded the company as PCs Limited. and by 1988 had an initial public offering that valued the company at nearly $80 million. DELL . ‡ Initial operations of Dell¶s company ran from Dell¶s dorm room.‡ The path to the success that Dell now enjoys began with an idea and a $1. until he decided to drop out of college to run his company full time.

‡ Though Starbucks has seen experienced a decline in popularity in the last several years the brand¶s exponential growth is impressive. and proved to be one of the most successful IPOs that year. Starbucks . ‡ They continue to open new stores.‡ In 1971. the three borrowed another $5000 from the local bank. three academics each invested $1350 of their own money into the first Starbucks located in downtown Seattle. ‡ Starbucks began to strategically expand all over the US. at one point. and to continue their operations. ‡ Shortly after opening. ‡ Starbucks went public in 1992. at the rate of opening one new store per day.

How to become a Fortune 500 Company .

1. Articulate . ‡ This would include specific descriptions of what each value would look like in practice on a daily basis.‡ Top management needs to establish a clear set of values that they want the organization -and its employees -to represent. as well as a methodology for measuring each practice on an ongoing basis.

historical documents. Identify and describe key organizational practices. and so on. ‡ This information would come from a variety of methods including interviews.‡ Key organizational practices need to be assessed to determine a baseline of current business operations. 2. observation of operational meetings. .

3. ‡ It is helpful in this step to obtain additional information from focus groups. employee and customer surveys. and to conduct an analysis of practices compared with the experience of other companies.‡ The extent and nature of alignment (or misalignment) of the actual practices of the organization versus its stated values is then determined. Compare values with practices .

‡ Changes that are deemed to have the greatest impact are scheduled to be made first. 4.‡ Issues and priorities regarding alignment of organizational practices with stated values are then itemized. Establish priorities for realignment .

products and markets. . 5. Recommend changes and implementation strategy.‡ The required changes are defined and integrated with one another to create a vision of how the company would be run based on today¶s information. An implementation strategy and timeline is then developed. ‡ This vision includes a process for continual change as new information or priorities dictate.

‡ This requires the combined and managed efforts of many people in the organization over a period of one to three years. team building. Make desired changes . 6. ‡ Outside expertise may be helpful in specific areas. performance management. compensation and reward systems. management training. such a s business planning.‡ Alignment changes are made with care being taken that they are effectively integrated with existing organizational practices. Involvement of people is a key way to build commitment. customer responsiveness.

and alerts management to the needs for mid-course corrections as they are needed. ‡ An effective monitoring system helps maintain the appropriate degree of involvement by employees at all levels of the organization.‡ A process for measuring the organization¶s on-going performance and progress is developed and installed. Monitor progress . 7.

com/encyclopedia/ References http://www.cnn.wikipedia.html http://en.htm http://www.html http://www.missionstatements.‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡