GLOBAL 500;2003.

Sure as monsoons year after year; since 1955, FORTUNE, has been publishing their
Magnum Opus, GLOBAL 500, world’s largest five hundred companies. They have published in their issue of 21st July 2003, their list of the 500 largest companies in the world, based; on the company- details for the year 2002. In some cases it is based on data of twelve months ending 31st March, 03
Monsoons bring in a lot of, guessworks, conjectures, surprises, interpretations, analysis.. There are , unexpected pourings, and draughts, some; sure- showers, too.

SOME SURPRISES
AOL Time Werner , which is the parent company of FORTUNE
publishers, has recorded the largest corporate loss at $ 98.7 Bn. To give you an idea about the magnitude, of the loss, it is about 4.5 times the turnover of our country’s largest corporate, I.O.C.
On account of the pressure on prices due to the global competition, there has been an erosion in revenues. The costs were not pruned proportionately, resulting in lowered profits, globally. In respect of the 500 companies referred overall the revenues fell by $ 281 Bn , and profits plunged by 56%.

As compared to 1995, when the first three largest companies were Japanese, ahead of General Motors( who were the largest in the list, for the next four years); this year there are only two companies from Japan in the first ten, that is Toyota Motor at $131 Bn. and Mitsubishi, at $109 Bn.
The other surprise is that TOYOTA has surged ahead of the rest of the Japanese giants such as Mitsubishi, Mitsui, Itochu, Marubeni etc., and is heading the pack of 88 of their nation.

Last year’s number one company Wal-Mart stores, has emerged as the largest company in the world, during this year too at $ 246.5 Bn. They have put behind them, General Motors at $186 Bn, and Exxon Mobil which is the third at $182. This is indicative of the fact that the service sector will be gaining in importance in times to come; ahead of the traditional, manufacturing.
“Enron “the company which has been creating waves worldwide and storms in our country, had figured as the sixth largest company, based on their revenues of 2001,last year. This year they don’t figure in the listing at all.
In our country we have been riddled with and rattled by, Bank scams. A large number of NPAs are taking the Banks to doom. In Japan too, there were 12 Banks who did not do as well as they should have done,last year and they had lost their place in the FORTUNE ranking.2002.
Some consolation for our Banking sector? Or a writing on the wall, for them.
In this year’s listing there are 62 Banks featuring in the sector, same as last year’s However,of all the 500 companies, CITIGROUP has emerged as the highest profit earner, at $15.2 Bn, on a turnover of $100 Bn..

Surprise LOSSES
Ford Motor, at $163 Bn have, reduced their losses from $ 5 Bn, last year to 0.9Bn . Daimler Chrysler, after their much hyped merger of Nov,’98 and with revenues of $ 141 Bn have turned the corner. From a loss of 0.5Bn last year they have notched a profit of
$4 Bn.

One is aware of the fact of the bursting tyres and the imbroglio thereafter, at FORD After the change of guard at Ford, in management. I have high hopes that the young C E O from the family of Ford, William Clay Ford Jr. will soon turn the corner. Similarly the German technology and quality, coupled with management skills of Jurgen Schrempp, will lift the spirits of the merged entity, of Diamler Chrysler.. They have also the fuel- cell technology of Daimler to bank on. Let us hope for better results from both of them in the. next year.
Wyeth a pharmaceutical company from U.S. is the one who replaces Microsoft, who have been for a few years the company having the highest profitability. Wyeth earned a profit of $4.4 Bn on a turnover of $ 14.5 Bn, i.e. 30% profitability. The next is, and hold your breathe, a company from Russia, in Petroleum refining, Yukos, with 28% profitability;
They have earned a neat profit of $ 3Bn, on revenues of, $10.9Bn. Ready for another surprise?. Out of a total of three companies in the listing, from Russia, there is one , in addition to Yukos, from petroleum refining, who have noteworthy profits, i.e. LUKOIL,
They have earned a profit of $1.8 Bn, on a turnover of $13.4 Bn. , i.e. 13.7%. No wonder Russians have been insulated from oil crisis to a large extent, all along. .

SURE SHOWERS
There are some, listings ,which are certainties, so ; no great surprises. They are affirmations of what we already know and expect.

Wal-Mart stores, is the biggest employer, with 1,300,000, employees, ahead of China National Petroleum, who employs 1,146,194, persons.
General Electric have earned a profit of $14.1 Bn,on a turnover of $131 Bn

From India there is only one company as usual which has made the grade i.e. I.O.C.
at $ 22.5 Bn they are ranked 191.. I am really proud of them. They are the only one who make it to the list, year after year. This year their; ranking has gone up from last; year’s 226.
Microsoft is again a very profitable company. Their profitability has taken a beating. They have revenues of $ 28 Bn and a profit of $7.8 Bn i.e.27 % of the revenue. Their revenues have gone up by about 12% but their profits have dipped as a percentage of their revenues. Last year their profitability was 29%, Hopefully Windows PX could come to their rescue this year.
Like last year Pharmaceuticals as an industry- segment in the list, is having the highest profitability i.e. 17% return, on revenues.

WOOING AND DELIGHTING THE CUSTOMER PAYS.
Service sector will keep booming as the PRIME ONE, e.g. Banking, Insurance , health care etc.
Sam Walton opened his first Wal-Mart discount stores in 1962. By 1985, the value of his stocks in the venture had made him the wealthiest American. This year his chain stores have topped the list. A man constantly on the move, he had anticipated well in time the worth of Information Technology in data processing. Excellent inventory control,
effective logistics could be achieved due to computerized operations. He had set in motion these way back in 1966. At one point of time his Database was second only to that of Pentagon.
His motto was “WE SELL FOR LESS ALWAYS”. He has taken discount retailing to a new height, by identifying, and discarding non-value added costs in the entire merchandising operations, eliminating middlemen etc.
A great lesson for our country, where costs are added up unnecessarily by a variety of dispensable middlemen. The result is that the consumer ends up in paying more and the producer gets less and less.
In our country Health care and Insurance; the two major sectors in Service Industry have a tremendous scope.

COUNTRYWISE LISTING
In the total list of 500; U.S figures as the highest with 192companies, next is Japan with 88. Although they rank second; it is a great fall from its surprise 149 in 1995, and 104 of year2000.
France and Germany are next with 40 and 35 respectively ahead of Britain who have 34.companies in the list.
China with 11 is great news, which equals Switzerland. China will surge ahead soon, with their aggressive marketing skills, and commercial acumen.
Perhaps India could have had three, in the rightfully. The last one in the list i.e. 500th is Kawasaki Heavy Industries, from Japan, at $10.17 Bn. It is reported that two of our Companies i.e. Bharat Petroleum, at $ 10.37 Bn and the other Hindustan Petroleum, at $10.33Bn, are decidedly having a turnover more than the last listed.
Hopefully the correction will come , later on . It is like the SSC Exam results, when once declared results even if corrected later lose the charm of the celebrity status. .

LESSONS FOR INDIA
Soichiro Honda founded Honda Motor, in 1948, to make motorcycles. When he had only 30 people working with him he announced to them that they would make; the world’s best two-wheelers. His VISION was adequately subscribed to by proper missions, goals, and objectives achieved by the team. They did make excellent two -wheelers. Later they embarked on making cars and were eminently successful in it too. With their popular models Accord, Logo, City, Odyssey etc. they captured overseas markets. Today they are rated the sixth largest automobile manufacturer in the world, with $65Bn, in revenues; they are ahead of FIAT, Nissan, BMW etc. An amazing feat.

WINNER’S ATTITUDE
Intel, the chipmakers, rank 155thd, with $ 26.7 Bn in turnover, and $ 3 Bn in profits. Their philosophy is simple, if the competitors are at “ n “; they will always be n+1, i.e.a
jump ahead of the rest. In India, we lack this attitude to; win. We have to POSSESS THE FEROCITY TO BE ahead of the pack.
Steve Jobs, who lobbed the limelight with his PC, “ Apple”, in eighties, used to say,
“ Do something insanely great, one which can make a dent in the Universe.”

This is achievable by many of our countrymen. We have the required HUMAN CAPITAL, and abundant resources. What we lack is the VISION, a collective will, and the attitude to think big. I have high hopes from Reliance that have displayed great ambition .
As a group, they have the will and the determination to achieve heights and stay there without feeling dizzy.

Our Nation should breed many more “Jonathans” with a burning desire to reach 10,000 feet altitude. There is no dearth in our country of talent or ones; that can train them to translate their DREAMS TO REALITY. .

M. S. RANADE
Chairman & CEO
Placewell Consultants, Pune 411007
mranade@vsnl.com