The Influencers
"Influence is like water, always flowing somewhere."— veteran strategy guru Gary Hamel.
With that in mind,
BusinessWeek, working with an advisory board of 14 academics, consultants, and industry leaders worldwide, has developed a list of the World's Most Influential Companies. 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. Have a look at the names on our list, as well as two other categories we think are worth noting: companies that are masters of their domain because they dominate their market and those up-and-comers likely to emerge as the next generation of influence leaders.
By Peter Burrows
Apple
Location: Cupertino, Calif.
Industry: Information Technology
Annual Sales: $24 billion
It’s the epitome of cool—a company that has gained a cultlike following because it somehow manages to breathe new life into every category it touches. From sleek laptops to the even sleeker iPhone, Apple (AAPL) products are imaginative, irreverent, and pleasing to the eye. They’re fun to use and have wreaked havoc on competitors. Consider how the iPod and iTunes software created a new business model for the global music industry. CEO Steve Jobs’ initial pitch in 2001: Put 1,000 songs in your pocket. Slowing iPod sales are just a sign of how ubiquitous the music player has become.
Now Jobs is shaking up the tech industry again with the iPhone. Apple has sold more than 13 million of them in the past 18 months. Samsung, Research in Motion (creator of the BlackBerry), and LG Electronics (page 56) have tried to copy its touchscreen-based design while counterfeiters raced to produce knockoffs.
One-Stop Shop
What rivals lack is the AppStore. Instead of just using a smartphone for talking and e-mail, Apple customers can download more than 10,000 applications within seconds on their iPhones. One lets you turn your iPhone into a flute. Other applications enable inventory tracking. Outsiders make them, and Apple keeps 30% of the revenue.
Now companies such as Google, T-Mobile, Microsoft, and RIM are creating AppStores of their own. Good luck. Apple’s U.S. partner, AT&T, is basking in the Apple glow. “AT&T used to be seen as this wheezing, oversized telco, but Apple’s hipness has rubbed off on it,” says tech consultant Paul Saffo.
For Apple, the key has been turning its isolated flashes of brilliance into a science. “They have been astoundingly consistent,” says Saffo. Even amid a recession, Jobs is obsessing over new products. And he knows everyone else is obsessing over what he’ll do next.
by Kerry Capell
Unilever
Location: London
Industry: Consumer Products
Annual Sales: $52 billion
There used to be one way to sell a product in developing markets, if you bothered to sell there at all: Slap on a local label and market to the elite. Unilever (
UN) changed that. The Anglo-Dutch maker of such brands as Dove, Lipton, and Vaseline built a following among the world’s poorest consumers by upending some of the basic rules of marketing. Instead of focusing on value for money, it shrunk packages to set a price even consumers living on $2 a day could afford. It helped people make money to buy its products. “It’s not about doing good,” but about tapping new markets, says Chief Executive Patrick Cescau.
“Unilever was among the first to prove you can build brands at the bottom of the pyramid,” says Martin Roll, head of Singapore branding consultancy Venture Republic. Companies from Nokia to Royal Philips Electronics have followed suit.
Priced To SellThe strategy was forged about 25 years ago when Indian subsidiary Hindustan Lever. found its products out of reach for millions of Indians. HLL came up with a strategy to lower the price while making a profit: single-use packets for everything from shampoo to laundry detergent, costing pennies a pack. A bargain? Maybe not. But it put marquee brands within reach.
Unilever continues to woo cash-strapped customers. In India, it has trained rural women to sell products to their neighbors. “What Unilever does well is get inside these communities, understand their needs, and adapt its business model accordingly,” says Joan E. Ricart, a professor at IESE Business School in Barcelona.
Three years ago the company built a free community laundry in the biggest slum in São Paulo. Named after its Omo detergent brand, the laundry created an oasis of cleanliness that helps explain why Unilever has 70% of the Brazil detergent market—despite charging 20% more than Procter & Gamble’s Ariel brand.
By Mara Der Hovanesian
JPMorgan Chase
Location: New York
Industry: Banking
Annual Sales: $64.5 billion
It’s a testament to the times that CEO Jamie Dimon has become a towering figure in finance. As rivals were leading the charge into esoteric mortgage-backed products, he shied away. Instead of steering JPMorgan Chase (
JPM) into new realms of risk and reward, Dimon beefed up reserves and told staff to pay for their own newspaper subscriptions.
But the conservative banker has had greatness thrust upon him. By shunning the deals that sent others crashing, he helped JPMorgan emerge as the king of banking. Even as its own fortunes suffer amid the turmoil, regulators trust it. Politicians cite the bank as a model of the kind of management needed to save Wall Street from future bouts of greed. And some rivals have looked to it for survival.
In March, as Bear Stearns was set to implode under the weight of its bad bets, Dimon came forward to pick up the pieces. While Federal Reserve Chairman Ben Bernanke helped broker the deal, Dimon says “it was our capital, our reputation, the work of our people that got the thing done.” Six months later regulators helped JPMorgan pick up collapsed mortgage lender Washington Mutual in one of the largest bankruptcies ever.
Other banks have absorbed troubled institutions, too, but none has proved as essential as JPMorgan. Buying Bear Stearns stabilized a jittery market. The bank’s balance sheet showed that some segments of Wall Street still valued prudence. Dimon couldn’t stave off the global turmoil, but Burnham Financial Industries fund manager Anton V. Schutz argues that JPMorgan’s absence would have made things worse. “These deals saved us all a lot of problems,” he says.
D.C. CloutHow Dimon ultimately will choose to leverage his company’s newfound dominance is unclear. With a $330 billion mortgage and home-equity loan portfolio, he is on the front lines of the housing crisis. JPMorgan was early in offering assistance to homeowners to stave off foreclosure and went beyond federal guidelines to modify loans. Dimon is also becoming more of an industry voice in Washington. “It’s an endorsement of the way he’s handled the crisis and managed risk,” says Brad Ziff, head of the hedge fund advisory practice at Oliver Wyman.
While Dimon says JPMorgan faces “a lot of issues” along with the rest of the sector, he’s acutely aware of his moment in history. But his first priority is to get back to boosting reserves. This time, others want to follow his lead.
By Adam Aston
Wal-Mart
Location: Bentonville, Ark.
Industry: Retailing
Annual Sales: $379 billion
With its unparalleled buying power and reach, Wal-Mart (
WMT) has revolutionized retailing and business practices worldwide. Name practically any product category, from groceries to photo processing, and there’s a good chance Wal-Mart is the No. 1 player in that space. It became the world’s largest retailer by cutting costs to deliver rock-bottom prices. And it made thousands of suppliers do the same. With about 100 million Americans shopping at its stores every week, vendors have no choice. A deal with Wal-Mart can make or break a business.
Wal-Mart has been criticized for allegedly applying its low-cost ethic to people. Critics cite low wages for its 2 million workers, as well as goods sourced from countries where factory conditions are a concern.
Green MachineBut Wal-Mart is determined now to use its sway for good, especially to better the environment. It’s pushing to create “zero waste” stores and sell more green products, with its sales of 145 million energy-saving light bulbs already dampening U.S. electricity consumption.
More significant, perhaps, it’s forcing Chinese manufacturers to clean up their ways. In November, Wal-Mart told big mainland suppliers that they must become 20% more energy-efficient within three years to stay on contract, and they must disclose more. As incoming CEO Mike Duke told suppliers, “If you sell us tennis shoes, we expect you to know—we expect you to tell us—not just where the tennis shoes were assembled, but which subcontractors played a role in making them.”
With Wal-Mart’s pressure on the world’s fastest-growing polluter, the impact could be profound. As sustainability consultant Andrew Winston argues: “Only Wal-Mart is big enough to daunt China’s worst practices.” Even those who like to blame it for other practices recognize Wal-Mart’s power in going green.
By Ronald Grover
News Corp.
Location: New York
Industry: Media
Annual Sales: $33 billion
The media business looks depressing, unless you’re Rupert Murdoch. Even as News Corp.’s assets suffer amid a global recession, Murdoch continues to place big bets, from buying up TV stations in Eastern Europe to turning
The Wall Street Journal into an even bigger brand. His critics can be merciless, but his rivals always pay attention. “This is a company that can see around corners,” says Merrill Lynch analyst Jessica Reif Cohen. “And everyone watches what they do.”
With his fearless and sometimes reckless empire-building, Murdoch has changed the game. Objectivity was the stated goal in U.S. news journalism until the boldly partisan Fox News Channel stole share from CNN. Social networking looked like a fad until News Corp. (
NWS) ponied up more than $580 million to buy MySpace.com. China was impenetrable—until Murdoch penetrated it. And rivals look on with envy as News Corp. has become the dominant force in TV in countries from India to Britain.
High StakesLong before “multiplatform” became the mantra of every media baron worth his private jet, Murdoch showed how it was done. News Corp. is both a producer of content—movies, books, TV shows, and newspapers—as well as a distributor of it. He has demonstrated that mighty brands such as Britain’s BBC can falter if you dare to give people what they want, as BSkyB’s satellite service has proved. He is willing to lose staggering amounts of money to build newspapers, such as The New York Post and, now, the Journal, into bigger properties. Opponents call it pride. Murdoch says he’s looking for the next big thing. Strike that; he wants to create the next big thing.
Whether Murdoch will fall flat on his face is always a question. Certainly his tendency to bet the farm on new ventures has taken News Corp. to the brink before. But, at 77, he continues to be the pioneer who makes everyone else hold their breath. “We’re almost paranoid to any sense of creeping incumbency,” says James Murdoch, Rupert’s son and chief executive of News Corp.’s European and Asian operations. “We may fail sometimes. But when we see an opportunity, we try to run with it as fast as we can.” That could be the expanded Journal or BSkyB’s new online subscription service, which other TV companies shied away from for fear of cannibalizing their core businesses. One thing is certain: News Corp. lives to make waves.
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