Characteristics of fortune 500 companies


Published on

Published in: Business, Economy & Finance
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide
  • Characteristics of fortune 500 companies

    1. 1. Characteristics of Fortune 500<br />Group 1:<br />Tae-Wooing Park<br />AbhayAgarwal Pengna Chen<br />January 25, 2011<br />1<br />
    2. 2. January 25, 2011<br />5<br />Outline<br /> 1. Introduction of Fortune 500<br /> 2.Ranking Factors <br /> 3. Country by Country Analysis <br /> 4. Characteristics (12) <br /> 5. Reference<br />2<br />
    3. 3. January 25, 2011<br />1. Introduction of Fortune 500<br />3<br />
    4. 4. What is Fortune 500 ?<br /><ul><li>The Fortune Global 500 is a ranking of the top 500 public corporations worldwide as measured by revenue.
    5. 5. The lists complied and published annually by Fortune magazine.
    6. 6. 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. </li></ul> Source:<br />January 25, 2011<br />4<br />
    7. 7. January 25, 2011<br />What is Fortune 500 ?<br /><ul><li>In 1990, US companies were added to compile a truly global list of top industrial corporations as ranked by sales.
    8. 8. Since 1995, the list has had its current form, listing also top </li></ul>financial corporations and service providers by revenue.<br /> Source:<br />5<br />
    9. 9. January 25, 2011<br />What is Fortune 500 ?<br /><ul><li>In 2005, more than 450 of them were headquartered in Europe (195), the United States (176), and Japan (80).
    10. 10. This list ranks only public companies, or those which have issued securities through an offering and which are traded on the stock market. </li></ul>Source:<br />6<br />
    11. 11. January 25, 2011<br />What is Fortune 500 ?<br /><ul><li>This list is important to a number of financial groups, but particularly to investors, who study the performance of these select companies.
    12. 12. 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. </li></ul> Source:<br />7<br />
    13. 13. January 25, 2011<br />Top 10 Brands on Fortune List 2010<br />8<br />
    14. 14. January 25, 2011<br />2.Ranking Factors of Fortune 500 <br />9<br />
    15. 15. January 25, 2011<br />Four RankingFactors<br /> 1. Sales Growth Ranking<br /> 2.Assets Ranking <br /> 3. Earnings Ranking<br /> 4. Capitalization Ranking<br />10<br />
    16. 16. January 25, 2011<br />Ranking Factors Used in Determining the Fortune 500<br /><ul><li> Sales Growth Ranking</li></ul>Tracking the increase in sales of a company is a way to <br /> determine if the company is indeed growing. This is very <br /> important to investors. <br /> Sales growth is also indicative of the state of the economy. <br /> One would expect a company's sales to grow during a <br />healthy period of economic activity. <br />growth rate> general growth in the industry  outperform <br />11<br />
    17. 17. January 25, 2011<br />Ranking Factors Used in Determining the Fortune 500 Cont’d<br /><ul><li> Sales Growth Ranking</li></ul>OUTPERFORM <br /> a superior quality product, low-cost production or service <br />delivery methods, excellent customer service and support, or <br />innovations in production and/or processing. <br /> ( characteristics )<br /> Companies on the Fortune 500 list typically exhibit more <br />than one success measure that may be important for <br />competitors to emulate.<br />12<br />
    18. 18. January 25, 2011<br />Ranking Factors Used in Determining the Fortune 500<br /><ul><li> Assets Ranking</li></ul> Companies listed on the Fortune 500 usually have large and <br />growing asset balances. <br /> An asset is any item of economic value owned by the <br /> corporation, including cash, securities, accounts receivable, <br />inventory, office equipment, and property.<br />13<br />
    19. 19. January 25, 2011<br />Ranking Factors Used in Determining the Fortune 500<br /><ul><li>Earnings Ranking</li></ul>Earnings<br /> = Revenues – Cost of Sales – Operating Expenses – Taxes <br /> Earnings are often the single most important determinant <br /> of a corporation's stock price.<br />14<br />
    20. 20. January 25, 2011<br />Ranking Factors Used in Determining the Fortune 500<br /><ul><li>Capitalization Ranking</li></ul> Capitalization is the sum of a corporation's long-term debt, <br /> stock, and retained earnings. It may also be called invested <br /> capital. <br /> Number of shares outstanding * Price per Share<br /> market price of the entire company / market capitalization<br />Source:<br />15<br />
    21. 21. January 25, 2011<br />3. Country by Country Analysis<br />16<br />
    22. 22. Country-by-country analysis<br /><ul><li>The number of country that has over 10 of Global 500 company is 12 countries.</li></ul>January 25, 2011<br />17<br />
    23. 23. Country-by-country analysis<br /><ul><li>The number of country that has Global 500 company is only 33.</li></ul>January 25, 2011<br />18<br />
    24. 24. Country-by-country analysis<br /><ul><li>U.S., Japan, and China accounted for over 50 percent.</li></ul>January 25, 2011<br />19<br />
    25. 25. Industry Analysis<br /><ul><li>Five companies of top 10 are petroleum refining industries.</li></ul>January 25, 2011<br />20<br />
    26. 26. Industry analysis<br /><ul><li>Wal-Mart Stores were ranked No.1.
    27. 27. recaptured No.1 in two years</li></ul>January 25, 2011<br />21<br />
    28. 28. Industry analysis<br /><ul><li>The revenue decreased due to the global financial crisis for 2009.
    29. 29. Decreased total sales compared with the previous year
    30. 30. Decrease of 8.3 percent(global 500)
    31. 31. Decrease of 11.4 percent(global 100)
    32. 32. But, increased operating profit
    33. 33. Increase of 16.9 percent(global 500)
    34. 34. Increase of 18.9 percent(global 100)</li></ul>January 25, 2011<br />22<br />
    35. 35. Industry Analysis<br /><ul><li>Gazprom is the most profitable company.</li></ul>January 25, 2011<br />23<br />
    36. 36. Industry Analysis<br /><ul><li>Wal-Mart Stores are the biggest employer.</li></ul>January 25, 2011<br />24<br />
    37. 37. Country-by-country analysis<br /><ul><li>The continuously promising country is China.</li></ul>January 25, 2011<br />25<br />
    38. 38. Country-by-country analysis<br /><ul><li>The number of Indiancompany is increasing. </li></ul>January 25, 2011<br />26<br />
    39. 39. Country-by-country analysis<br /><ul><li>The number of Americancompany is decreasing. </li></ul>January 25, 2011<br />27<br />
    40. 40. Country-by-country analysis<br /><ul><li>The number of South Korean company is decreasing since 2008. </li></ul>January 25, 2011<br />28<br />
    41. 41. January 25, 2011<br />4. Characteristics (12) of <br /> Companies on Fortune List<br />29<br />
    42. 42. Character 1. Vision<br /><ul><li> Fortunate 500 companies have a clear vision stemming from </li></ul> top management as to what they are about and what they <br /> want to be. This vision is clearly communicated to all <br /> employees and used on a daily basis for making decisions. <br /><ul><li> The vision of Wal-Mart is quiet straight forward. </li></ul>“To become a world wide leader in retailing.”<br />January 25, 2011<br />30<br />
    43. 43. Character 1. Vision Cont’d…<br /><ul><li> “Toyota’s aims to achieve long term, stable growth in </li></ul> harmony with the environment, the global economy, the <br />local communitiesit serves and its stakeholders.”<br /><ul><li> “To design and create in the decade the new global network, </li></ul> processes of human resources to more complex and<br />productive work.” – AT&T<br />January 25, 2011<br />31<br />
    44. 44. Character 2. Empowerment<br /><ul><li> Employees are treated as though they are partners, not </li></ul> slaves, to the business. <br /><ul><li> The organization expects a lot from every employee, but is </li></ul> willing to help employees do their job with minimal barriers.<br /><ul><li> Employees are expected to constantly be learning new skills </li></ul> and growing, and the organization provides training and <br /> career development options to facilitate that growth. <br />January 25, 2011<br />32<br />
    45. 45. Best Employers<br />January 25, 2011<br />33<br />
    46. 46. Character 3. Performance<br /><ul><li> Employee performance is measured and monitored in a way </li></ul> that encourages optimal performance. <br /><ul><li> Goals are set for all major areas for performance, and </li></ul> feedback is routinely provided as to how employees are <br /> doing against those goals. Even the individual projects and <br /> company has certain goals and performance is measured <br /> against them.<br />January 25, 2011<br />34<br />
    47. 47. Top companies by revenue<br />January 25, 2011<br />35<br />
    48. 48. Character 4. Profit<br /><ul><li> The company is profitable because being so is necessary to </li></ul> survive, but does not treat this objective as its sole purpose <br /> for being. <br /><ul><li> A company invests and involves in those transactions </li></ul> which bring in profit for the company. <br /><ul><li> Company’s image and stakeholder’s confidence largely </li></ul> depend on the profits a company earn.<br />January 25, 2011<br />36<br />
    49. 49. Top companies by profit<br />January 25, 2011<br />37<br />
    50. 50. Character 5. Team Approach<br /><ul><li> Employees are organized as much as possible into teams </li></ul> to facilitate the best means for solving problems, building <br /> morale, and creating synergy for achieving group and <br /> organizational goals.<br />January 25, 2011<br />38<br />
    51. 51. Character 6. Customer Service<br /><ul><li>Customers are treated as if they are the most important </li></ul> part of the business, which they are. Every employee and <br /> manager seeks to serve the customer or support those <br /> employees that are doing so. All work towards a common <br /> goal of customer satisfaction.<br />January 25, 2011<br />39<br />
    52. 52. Top companies by Customer Service - According to a survey by J.D. Power & Business Week<br />January 25, 2011<br />40<br />
    53. 53. Character 7. Quality<br /><ul><li>The organization prides itself on producing quality goods </li></ul> and services all the time. The company knows that long-term <br /> success depends in large part upon the long-term reputation <br /> of the company and so consistently seeks to develop lasting, <br /> quality relationships and to build quality products.<br />January 25, 2011<br />41<br />
    54. 54. Top Companies by quality<br />January 25, 2011<br />42<br />
    55. 55. Character 8. Communication<br /><ul><li> Management knows that communication is the oil that keeps </li></ul> the company operating smoothly. It seeks to communicate <br /> frequently to employees at all levels of the organization and <br /> to allow optimal opportunity for employees to communicate <br /> in any direction within the organization. <br />January 25, 2011<br />43<br />
    56. 56. Character 9. Ethics<br /><ul><li> Ethics in business are about distinguishing between the </li></ul> right and the wrong and adhering to the ethical principles. <br /><ul><li> The trustworthiness of a business, its customer service, its </li></ul> employee care, its way of dealing with customers and its <br /> urge to retain their old customers, is a part of the business <br /> ethics which plays a important role for long term success <br /> of companies.<br />January 25, 2011<br />44<br />
    57. 57. Character 10. Employee Management<br /><ul><li> One of your strongest assets is a loyal and content work force.
    58. 58. 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.
    59. 59. It includes their work, surrounding environment, pay and growth opportunities.
    60. 60. An efficient reward system is present in these companies, to reward those who make steady improvements and perform beyond expectations, which includes profit sharing.</li></ul>January 25, 2011<br />45<br />
    61. 61. Top companies in people management<br />January 25, 2011<br />46<br />
    62. 62. Character 11. Acceptance to Change<br /><ul><li>Changes are necessary for a company to excel and improve </li></ul> its performance over time. <br /><ul><li> These companies make changes taking care that they are </li></ul> effectively integrated with existing organizational practices. <br /> This requires the combined and managed efforts of many <br /> people in the organization over a period of one to three years. <br /><ul><li> Involvement of people is a key way to build commitment. </li></ul> They follow a strategy of constant change and improvement.<br />January 25, 2011<br />47<br />
    63. 63. Top companies by Growth in Revenue<br />January 25, 2011<br />48<br />
    64. 64. Top companies by Growth in Profit<br />January 25, 2011<br />49<br />
    65. 65. Character 12. Innovation<br /><ul><li> Executives now firmly believe that innovation is central to a </li></ul> company’s strategy and performance, but getting it right is <br /> as hard as ever. <br /><ul><li> Corporate performance is most likely to be affected by </li></ul> breakthrough innovations. <br /><ul><li> Companies generally focus on innovation in areas such as </li></ul> product or service development. In certainly helps them in <br /> maintaining their market leadership.<br />January 25, 2011<br />50<br />
    66. 66. Top Companies by Innovation<br />January 25, 2011<br />51<br />
    67. 67. Reference<br /><br /><br /><br /><br /><br /><br /><br />January 25, 2011<br />52<br />
    68. 68. January 25, 2011<br />Thank You!<br />53<br />