Financial ratios make room for "fitness"

March 5, 2002 - Today's release of a report ranking global firms puts BMW, Nokia, and Pfizer at the top the list. Each year since 1998, Jean-Claude Larreche, Professor of Marketing at INSEAD business school, has put managers from top North American an European global firms to the test - the corporate competitive fitness test that is. His 2002 study ranks 326 firms in 8 sectors on their fundamental business capabilities. Saatchi & Saatchi is the agency covering the study and hosting the corporate launch event in London.

Initial assessment, ongoing measurement, and staying the course are the biggest business challenges today. Corporate competitive fitness provides a framework to address those challenges and works alongside other, more traditional financial indices. Corporate competitive fitness is the roadmap to building long-term shareholder value.

An executive at a luxury goods firm said the study is, "Extremely interesting to compare company positioning per sector and activity." In contrast to other rating systems, this study requires multiple executives within a firm to evaluate the state of the business. Executive opinions are gauged on a 182-item questionnaire. Questions represent 12 fundamental business Capabilities such as Market Strategy and Innovation, along with an E-Business Capability designed to measure large multinational corporations implementing end-to-end strategies ¾ not tech firms employing the latest gadget. Over 1,200 members of the International Executive Network contributed to the 2002 survey.

So which are the most competitively fit firms for 2002? Out of the 326 evaluated, 86 achieved a World Class rating of 65 or higher. The Computers & Electronics sector was the highest rated sector making up about 19% of the World Class firms. Finance & Insurance and Process Industries comprised 17% each and Consumer Goods 14%. The remaining 33% of World Class firms were from Pharmaceuticals & Healthcare, Services, Automobiles & Automotive and Engineering & Machinery - in that order.

Computers & Electronics outscored other sectors with the highest average sector ratings, E-Business ratings, and Capability ratings on seven out of 12. Nokia, the Computers & Electronics sector leader, shared the Top 10 spotlight with three other firms from its sector. Firms ranked Top 10 out of 86 were:

"It provoked several reactions and discussions and all this strategic information should be worthwhile for managers", a Consumer Goods Executive said about preliminary results to the study. Firm results are readily available at  www.corvaltec.com .However, individual responses are kept confidential.

As companies juggle priorities to rise above the slumps in corporate revenues, some are better positioned to remain competitive in the New Economy - or whatever it will be termed in the aftermath.

About The Competitive Fitness of Global Firms Report
This report publishes results of an annual study conducted by Professor Jean-Claude Larreche, at INSEAD business school. The study ranks top North American and European firms based on fundamental business capabilities based on a survey of top managers from those firms. The capabilities measured are: Mission & Vision, Customer Orientation, Corporate Culture, Organization & Systems, Planning & Intelligence, Human Resources, Technical Resources, Innovation, Market Strategy, Marketing Operations, International, Performance and E-Business. Out of the 326 firms covered, a total of 86 firms achieved above a World-Class rating for 2002 with BMW, Nokia, and Pfizer ranking as the "best". For more information and results of the study, visit: www.corvaltec.com.