International Business

Characteristic of Fortune 500

Kim Jae Pil (116034)

Oh Kwang Ho (117065) Lee Mi Ju (118809)

Contents
1
Introduction of Fortune 500 Ranking factors Country by Country analysis Characteristics(12) Reference

2
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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.

Source: http://en.wikipedia.org/wiki/Fortune_Global_500
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What is Fortune 500 ?

Until 1989, it listed only non-US industrial corporations under the title "International 500", while the Fortune 500 contained and still contains exclusively US corporation. 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. Source: http://en.wikipedia.org/wiki/Fortune_Global_500
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What is Fortune 500 ?

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.

Source: http://en.wikipedia.org/wiki/Fortune_Global_500
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What is Fortune 500 ?

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 2011

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2. Ranking Factors of Fortune 500

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Four Ranking Factors

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

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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

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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Ranking Factors Used in Determining the Fortune 500

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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Ranking Factors Used in Determining the Fortune 500

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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Ranking Factors Used in Determining the Fortune 500

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

(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

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Country-by-country analysis
The number of country that has over 10 of Global 500 company is 10 countries.
Rank
1 2 3 4 5 6 7

Country
U.S Japan China France Germany Britain Switzerland

# of Global 500 Companies 2011(2010) 133(139)

68(71) 61(46) 35(39) 34(37) 30(29) 15(15)

8
9 10

South Korea(12)
Netherlands Canada

14(10)
12(13) 11(11)

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Country-by-country analysis
The number of country that has Global 500 company is only 33.
No. 1 2 3 Country Australia Austria Belgium # of Global 500 No. Companies 8 1 5 1 7 12 14 15 16 17 Country France Germany India Ireland Italy # of Global 500 No. Companies 35 34 8 2 10 24 25 26 27 28 Country Russia Saudi Arabia Singapore South Korea Spain # of Global 500 Companies 7 1 2 14 9

4 Belgium/Netherlands 5 Brazil

6
7 8 9 10 11 12

Britain
Britain/Netherlands Canada China Columbia Denmark Finland

30
1 11 61 1 2 1

18
19 20 21 22 23 24

Japan
Luxembourg Malaysia Mexico Netherlands Norway Poland

68
1 1 3 12 1 1

29
30 31 32 33 34 35

Sweden
Switzerland Taiwan Thailand Turkey U.S. Venezuela

3
15 8 1 1 133 1
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Country-by-country analysis
U.S., Japan, and China accounted for over 50 percent.
Rank Country Companies(2010) Companies(2011)
# of Global 500 # of Global 500 Graph from 2005 to 2011

1 2 3 4

U.S. Japan China France Total

139 71 46 39 256(51.2%)

133 68 61 35 262

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Industry Analysis
Five companies of top 10 are petroleum refining industries.
Rank Rank 2011 2010 1 2 3 4 1 2 3 4

Company
Wal-Mart Stores Royal Dutch Shell Exxon Mobil BP

Country
U.S. Netherlands U.S. Britain

Industry
Retail Petroleum Petroleum Petroleum

5
6 7 8

7
10 8 5

Sinopec
China National Petroleum State Grid Toyota Motor

China
China China Japan

Petroleum
Petroleum Power Automobiles

9
10

6
11

Japan Post Holdings

Chevron

Japan
U.S.

Diversified
Petroleum
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Industry analysis
Wal-Mart Stores were ranked No.1. recaptured No.1 in two years
Year Rank 2006 2 2007 1 2008 1 2009 3 2010 1 2011 1

Year 2011

Revenue ($ millions)
421,849

Profits ($ millions)
16,398

2010
2009
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480,214
405,607

14,335
13,400
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Industry analysis
Top 50 Headquarters Top 500 Headquarters

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
Nestle is the most profitable company in 2010.
Rank 1 2 3 4 5 6 7 8 9 10
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Company Nestle Gazprom Exxon Mobil Industrial & Commercial Bank of China Royal Dutch Shell China Costruction Bank AT & T Petrolbras Chevron Micorsoft

Global 500 Rank 42 35 3 77 2 108 30 34 10 120

2010 Profits ($ millions) 32,843.0 31,894.5 30,460.0 24,398.2 20,127.0 19,920.3 19,894.0 19,184.0 19,024.0 18.760.0
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Industry Analysis
Rank
1 2 3 4 2009 Revenues company ($millions)
Royal Dutch Shell Exxon Mobil Wal-Mart Stores BP Chevron Total

2010 2011 Revenues Revenues company company ($millions) ($millions)

Wal-Mart Stores Royal Dutch Shell Exxon Mobil BP Toyota Motor Japan Post Holdings

458,361 442,851 405,607 367,053 263,159 234,674

408,214 285,129 284,650 246,138 204,106 202,196

Wal-Mart Stores Royal Dutch Shell Exxon Mobil BP Sinopec Group China National Petroleum

421,849 378,152 354,674 308,928 273,422 240,192

5
6

7
8 9 10

ConocoPhillips
ING Group

230,764
226,577 207,814 204,352

Sinopec
State Grid

187,518
184,496 175,257 165,496

State Grid
Toyota Motor Japan Post Holdings Chevron

226,294
221,760 203,958 196,337

Sinopec
Toyota Motor

AXA
China National Petroleum

Country-by-country analysis
The continuously promising country is China.
The number of Fortune Global 500
70 60 50 40 30 20 10 0 2006 2007 2008 2009 2010 2011

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Country-by-country analysis
The number of Indian company is increasing.
The number of Fortune Global 500
9 8 7 6 5 4 3 2 1 0 2006
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2007

2008

2009

2010

2011
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Country-by-country analysis
The number of U.S.A company is decreasing.
The number of Fortune Global 500
180 160 140 120 100 80 60 40 20 0 2006
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2007

2008

2009

2010

2011
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Country-by-country analysis
The number of South Korean company is fluctuated.
The number of Fortune Global 500
16 14 12 10 8 6 4 2 0 2006
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2007

2008

2009

2010

2011
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Country-by-country analysis
Top 14 S.Korean Breands on Fortune List 2011

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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
Toyotas 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 big companies to work for

Rank
20 49 4 67

Company Name
Cisco Systems American express Google Publix Super Market

Global Rank#
62 91 92 102

Industry
Network and Other Communications Equipment Internet Services and Retailing 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 # 1. 2. 3. 4.
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Company Name Wal-Mart Stores Royal Dutch Shell Exxon Mobil BP

Industry General Merchandisers Petroleum Refining Petroleum Refining Diversified Financials

Revenues ($ million)
421,849 378,152 354,674 308.928
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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. Companys image and stakeholders 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
2 3

Nestle
Gazprom Exxon Mobil Industrial and Commercial Bank of China

42
35 3

Beverage Industry
Energy Petroleum Refining

32,843.0
31,894.5 30,460.0

77

Finance

24,398.2
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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 Global Rank#
132

Rank 1

Company Name United Services Automobile Association General Motors Nordstrom Toyota Motors

Industry Insurance

Service Index 992.6

3 4 7
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15 270 5

Motor Vehicles General Merchandisers Motor Vehicles

985.4 947.1 932.5

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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 1 2 Company Name Walt Disney Intel Global Rank# 57 62 Industry Entertainment Semiconductors Industry Rank 1 1

3
4

UPS
Apple

43
56

Delivery
Computers

1
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 1
2 3 4

Company Name Goldman Sachs Group

Apple Nike UPS

Global Rank#

Industry Megabanks
Computers Apparel Delivery

Industry Rank

39
56 124 43

1
1 1 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
1

Company Name
Old Mutual American International Group Aegon Gruppo Mediolanum

Global Rank#
220

% Growth in Revenue
39,434.1%

2
3 3

41
103 472

829.3%
485.6% 421.1%

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Top companies by Growth in Profit

Rank Company Name

Global Rank# 383

460 223 215

% Change in Profit 5,170.3

2,551.7 1,924.5 940.4

Profits ($ million) 2,032.3

1,643.4 1,070.2 1,969.4

1
2 3 4

Ping An Insurance
Sistema Shanghai Automotive Scottish & So. Energy

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Character 12. Innovation

Executives now firmly believe that innovation is central to a companys 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

Apple

56

Computers Internet Services and Retailing Apparel Internet Services and Retailing

Google

102

Nike

124

Amazon.com

100

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Reference
1. 2. 3. 4. 5. http://en.wikipedia.org/wiki/Fortune_Global_500 http://www.google.com.hk http://www.inc.com/encyclopedia/fortune-500.html# http://money.cnn.com/magazines/fortune/global500/2010/index.html http://money.cnn.com/galleries/2010/fortune/1002/gallery.mostadmird_product_quality.fort une/2.html 6. http://articles.moneycentral.msn.com/News/25CompaniesWhereCustomersComeFirst.aspx? page=3 7. http://www.uspages.com/fortune500.htm
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