The World's 10 Most Influential and Innovative Companies

The December 22nd edition of Business Week published an article titled “The World’s Most Influential Companies”. As per Business Week, “they are the innovators and front-runners that are shaping business today”.

The following is a brief overview of the the top ten companies from the list. These 10 companies “have devised winning strategies in their industries. They are the ones with the game-changing ideas, the greatest impact on consumers, and the bold tactics rivals emulate. None is infallible or without controversy”. Five of the 10 companies are US-based.

1. Apple (AAPL) is a Cupertino, California-based maker of many technology products like cool laptops, iPhones, iPods, etc. that are “imaginative, irreverent, and pleasing to the eye”. Apple’s annual sales are $24.0 B. AAPL does not pay a dividend. After reaching a high of $200 in January, the stock closed at $85.04 yesterday. Annual revenue growth in the past 5 years is 39.23%. However, sales may not continue at this pace due to the economy being in recession and many folks who own iPods, iPhones do not find the need to replace them.

2. Google (GOOG) is the world’s top search engine. It processes “3,000 queries per second in the U.S. alone”. GOOG has a P/E of 19.07 and does not pay a dividend. Late last year the stock reached a peak of $716. Yesterday it closed at $302.95.

3. Huawei is a Shenzen, China-based maker of “networking equipment, cellular handsets, and other telecommunications gear. Huawei’s stock is not listed in the US markets. The company competes against other network equipment makers like Nortel (NT), Alcatel-Lucent (ALU), Cisco (CSCO),etc. Annual sales are $12.6 billion.

4. JPMorgan Chase and Co (JPM) is one of the so-called three giant “superbanks” that dominate the financial industry in the USA. JPM currently pays a dividend of 5.22%. In September, Chase bought the failed West Coast bank Washington Mutual (WaMu).

5. St. Louis-based Monsanto (MON) is “a global provider of agricultural products for farmers”. Business Week said, “About 97% of U.S. soy is now grown using Monsanto technology, and the company’s insect- and herbicide-resistant corn and cotton have become the default standard for U.S. farmers”. The current yield is 1.45%.

6. News Corp (NWS) is one of the world’s largest media conglomerates. In the US, News Corp. owns many newspapers including The Wall Street Journal, New York Post and the Fox TV news channel. NWS pays a dividend of 1.36%.

7. The oil company Saudi Aramco is based in Dhahran, Saudi Arabia. Annual sales are $210 B. As the world’s largest oil producer it “ships around 8 million barrels to industrial powers” everyday. Saudi Aramco does not trade in the USA.

8. Toyota Motor Corp (TM) is one of the world’s largest auto makers. TM’s current yield is 4.8%. While revenue increased annually about 11% in the past 5 years, this week Toyota announced that auto sales plunged 21.8% in November, the biggest drop in 8 years. The company also projected that it will report its first operating loss in 70 years due to the current slowdown in the global economy.

9. Unilever PLC (UL) is one of the parent companies of the Unilever Group (Unilever) with headquarters in London, UK. Unilever owns brands such as Dove, Lipton, Vaseline, etc. and they are popular in many emerging countries such as India and Brazil. Unilever was successful in marketing its products to poor consumers by making the packages very small and setting the price accordingly. The P/E is 9.48 and the yield is 2.91%.

10. Wal-Mart Stores Inc (WMT) is the world’s largest retailer. The company operates the Wal-Mart Stores and Sam’s Club in the USA. Sam’s Club’s sales accounted for 11.8% of total net sales in 2008. About 100 million Americans visit its stores each week. WMT pays a dividend of 1.72%.

Comments

[Sailorman:]

What a disappointing article! The title is all wrong! AAPL and Google may qualify, but all the rest absolutely not. How about Valcent, or some biotech, or medical, ore drug. What's so sophisticated about pumping oil out of the ground or a bank that rips us off, and a news conglomerate the promotes lies?

2008 Dec 25 08:31 AM

[mollytjm:]

i laughed at the bit about people with iphones and ipods not needing or wanting to replace them because,i assume, the economy. hello...the world is calling. Apple isn't relying on U.S. growth...our population is pretty small compared to some countries. Apple will continue to grow because it's global now. when the new store opened in Germany, it was a mob scene..no Apple store opening in the U.S. was better than that one and it's being repeated all over the world. and i had an ipod last year...so i bought an iphone this year. my friend had a shuffle and she bought an iphone and bought her kids ipods and her oldest the Touch.

but the big news is the app store. ipods always were the 'lead in'. i've already downloaded a lot of apps to my iphone and i'm not alone. this is a story that will continue to grow, even in a lousy economy.

2008 Dec 25 10:25 AM

[Factoid:]

I agree on Apple. The rest are not the most innovative from a raw creation perspective. Maybe they have improved but not created new technology.

Hewlett Packard, has been more innovative than any of the above. Just look at their patents this past 12 months. So has IBM and Siemens and Phillips Electronics (medical innovation). What about Medtronic, Edwards Life Sciences, St. Jude Medical, KCI Concepts and a host of other innovators in the medical arenal.

Google has contributed what *-*new*-* technology this year?
Test other search engines and I think you'll get better results.

Wal-Mart is the most innovative?
Huawei is the best copycat company in the world. True.

JP Morgan has been "innovative" by NOT participating in sub-prime junk.
Otherwise it has done what?
So has Bank of America.

Toyota and Honda have indeed been innovative over the past 20 years, with superior products and energy efficiency.

Yes, Unilever has Dove etc. What is their new innovation this decade?

2008 Dec 25 01:41 PM

[Kevin Walmsley:]

How did they manage to ignore General Motors, Chrysler, and AIG? AAPL will remain influential only so long as they keep making cool stuff. But companies that are so innovative that they lose money in every single economic environment can zip up to Washington, and the geriatric ward that masquerades as the United States Congress will crawl over broken glass to give them blank checks, to be paid in higher taxes and inflation, by me.

THAT is influence.

2008 Dec 25 07:22 PM

[LilBob:]

This article should have included the prefix: "Looking backward, the ten most influential companies of last year." With the consumer based economy grinding to a halt and an inevitable shift toward a value-based economy on the horizon many of these companies are bound for hard times. I disagree that Apple is the top dog in the business world now, they are a marketer of gadgets for self-absorbed elitists; and that's just the start of the list. The only one on this list that I mostly agree with is Monsanto, and even that pick may see declining sales in the next year with grain prices falling and interest in ethanol production declining.

2008 Dec 25 09:09 PM

[Ricard:]

I think this article fails because the title is not meant to do much more than draw one's attention. You can define "Influential" through market value - companies with high market caps influence their industries, sectors, and even governments by using their stock as the corporate currency with the most integrity (think of a very strong dollar). Then, combine that with whatever you think is innovative, which is what I hoped to glean from this article. AAPL and GOOG...wow, let's move on, shall we? Nothing new there, although outside of the IPhone, I can't really point to AAPL profiting from innovation besides bringing fashion to tech. Where is CSCO and INTC? Don't tell me that these two companies have little influence, or lack innovation. Although I agree that Aramco is very influential, I cannot seen any signs of innovation coming out of that company - indeed, companies like XOM deserve high marks for bringing innovative Western technology to the Sauds - and it has a high market cap to boot. I'd expect at least one defense industry company, and was hoping for more biotech...ideas that I don't get much exposure to due to my sector preferences. WMT and TM being innovative? TM wins over the Big 3 because they dug their own grave and jumped in...TM only innovated the concepts of underselling your opponents and appealing to the spendthrift...but wait, that's nothing new. Ditto WMT.

I'm sorry...I guess I was expecting a lot more out of an article with this kind of title. Great pick on Huawei though...now if you can just tell us how to buy it...now I remember why I cancelled my Businessweek subscription.

2008 Dec 26 01:47 AM

[Vienna:]

I think the article should be called ... from the US perspective. All US statistics always tend to enhance US corporations, a declining 300 mio market.

e.g. If I look at all the "world series" sport events, which only take place in the US.

I do think that a lot of prospectice companies will come from somewhere else, maybe we have not even heard of them, but they are currently serving 1,3 billion people in China.

And for all patriots, think about what happened to the automotive industry.

2008 Dec 26 08:03 AM

[Maxe Paul:]

Let me redo this for you
Microsoft
Google
Apple
BHP Billiton
GE
Wallmart
Toyota
BP
Unilever
and News Corp would just scrape in, maybe. the others you mention are a non entity worldwide. BHP is a massive player, has to be on any list.

2008 Dec 26 09:08 AM

[catbird:]

Kudos for MONSANTO. Its research developing new hybrid seeds continues to save the world from food shortages and famines. Many successes. Seeds resistant from drought conditions. How important this is with less fresh water and adverse climate changes. Disease resistant. Increased yield. The list goes on.

2008 Dec 26 10:56 AM

[antek:]

Our economy has to evolve and companies like Apple, Monsanto, and yes J P Morgan et al bring inovative technology to our everyday activities that changes our routines, A LOT! I love what J P Morgan Chase has done at the ATM; your deposit receipt has a picture of the check WOW! And, yes I have an iTouch. I purchase it and not the iPhone because I have a cell phone and I have another year on the contract.

When my wife and I travel, we text our family and friends with pictures. We don't always talk, not with a camera phone and texting.

My cell phone accesses the internet but the screen is too small. My iTouch is better for accessing the internet. The iTouch is the coolest, with games like flick bowling, Koy pond and more ... it just doesn't get any better.

Now what about oil? Hmmmmmmm, it's all going to be about electrons in the future.

2008 Dec 26 11:03 PM

[David Hunkar:]

Guys
Thanks for your comments.

Sailorman
Sorry that the title was a bit misleading.I agree
with you.There are many others who qualify to
be in this list than the ones listed here.


mollytjm
A while ago there was an article in BW where it said that
when Apple opened a store in Hungary I believe it
was not successful as they expected. It also mentioned
that Europeans considered ipods and iphones to be
expensive.

InterestingTwist
While Unilever may not have had new innovations
this decade BW may have selected them for their
influence in the developing world due to their
successful marketing of products to people earning
less than $2 a day.

Lilbob
Agree I should mentioned what you suggest.
Business Week says "We selected 10 companies that played a major role
in their industry over the past year and could shape the corporate
landscape for years to come."
So it based on the past year.

-David

2008 Dec 27 11:19 PM

[adavivan:]

this article does have some sense , but some where down the line it missed , yep if the article is based on the number of population then huawei can make it , since the company is wel known for copying others and selling to third world and african countries it does have some colut .

I would rather have telecom , BT companies on the list , apple , google are correct in terms of innovation , but by sheer vol Nokia is no where , wonder why is that
it is only fair if article publishes the measuring critera

Jan 04 10:17 PM