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

Contents

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?

 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 list generally signals good news.

Why it matters?

 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

Influence of Fortune 500

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.

Top 10 on Fortune 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

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) 68,837 58,900 34,102 32,450 28,593 27,046 26,945 26,065

Top companies in India

180 160 140 120 100 80 60 40 20 0 2006 2007 2008 2009 2010 2011 U.S. Japan China India South Korea

Comparative analysis of # of companies in TOP countries

Ranking factors

1. Sales Growth Ranking 2. Assets Ranking 3. Earnings Ranking 4. Capitalization Ranking

4 main factors

 When a company's sales grow faster than the general economy 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 more than one success measure that may be important for competitors to emulate.

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

Sales Growth 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.

Assets Ranking

 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. By multiplying the number of shares outstanding by the price per share, it is possible to determine the market price of an entire company or its market capitalization.

Capitalization Ranking

Characteristics of Fortune 500 companies

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

1. Consistent Vision

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

Vision of top fortune 500 companies

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

2. 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.

Example of leadership development

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

3. Strong values

 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.

Core values of top fortune 500 companies

 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 technologies behind the products we make. We believe in deep collaboration and cross-pollination of our groups

Values contd.

 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.

4. Empowerment

 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.

5. Customer satisfaction

 Produces high quality goods and services all the time. 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.

6. Commitment to Quality

 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. Ethics

 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.

8. Effective Communication

 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.

9. Teamwork

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

Example of teamwork

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

 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, 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, 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, Apple continues to grow and prove to be a wise investment .

Apple

 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.

Nordstorm

 The path to the success that Dell now enjoys began with an idea and a $1,000 investment. While attending the University of Texas 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 his company 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.

DELL

 In 1971, three academics each invested $1350 of their own money into the first Starbucks located in downtown Seattle. 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 in popularity in the last several years the brands exponential growth is impressive.

Starbucks

How to become a Fortune 500 Company

 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 well as a methodology for measuring each practice on an ongoing basis.

1. Articulate

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

2. Identify and describe key organizational practices.

 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, and to conduct an analysis of practices compared with the experience of other companies.

3. Compare values with practices

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

4. Establish priorities for realignment

 The required changes are defined and integrated with one another 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 as new information or priorities dictate. An implementation strategy and timeline is then developed.

5. Recommend changes and implementation strategy.

 Alignment changes are made with care being taken 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. 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.

6. Make desired changes

 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 all levels of the organization, and alerts management to the needs for mid-course corrections as they are needed.

7. Monitor progress

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-toriches/ http://www.missionstatements.com/fortune_500_mission _statements.html http://www.ehow.com/facts_7338887_do-becomefortune-500-company_.html http://www.uspages.com/fortune500.htm http://www.company-statements-slogans.info/fortune500

References