Deploying in China:

4 key questions to ask before taking the plunge

Here are four important questions an electronics executive should ask before investing in China.

Deploying in China:

5 rules to live by when doing business in China

Follow this expert advice when doing business in China.

Deploying in China:

How to find a local intermediary

Electronics companies deploying in China for the first time face daunting challenges, such as setting up supply chains, contracting for facilities, and appeasing government bureaucracies. Selecting an effective intermediary can be perilous. Here’s a five-step process to help you make the best decision.

The World’s 50 Most Innovative Companies Interactive Scoreboard

The World’s 50 Most Innovative Companies
Special Report

Not so long ago, no conversation about innovation would be complete without the story of 3M inventor Art Fry’s eureka moment that led to the Post-it Note. Today, that tale, which verges on cliche, has been almost universally replaced by the story of the iPod, Apple’s omnipresent icon of design.

It should come as little surprise, then, that Apple tops the BusinessWeek-Boston Consulting Group’s list of the World’s Most Innovative Companies for the third year in a row. That sort of staying power speaks volumes about the sort of innovation that matters today. Unlike the Post-it Note, which proves the value of lone inventors, the iPod epitomizes today’s innovation sensibilities. These include the ascendance of design, the focus on the user’s experience, and the power of ecosystems: The iPod is a hit because it works so seamlessly with the iTunes software. The company’s much-anticipated iPhone, which launches in June, will likely keep Apple high on our list next year too.

There are some surprises this year, including four new companies in the top 25—Disney, Boeing, Genentech, and Cisco Systems. In other cases, the resilience of corporate reputation was surprising. Wal-Mart Stores suffers from slow growth, but still commands respect for its supply-chain innovations. Dell wears the brand halo of an innovator for its efficient direct-to-consumer model, though it suffered through a management shakeup and fell from No. 14 to No. 22. And what of 3M? It fell too, from No. 3 in 2006 to No. 7 this year.
Click column heading once to reorder from highest to lowest. Click twice to reorder from lowest to highest.
2007 Rank
2006 Rank
Company Name
HQ CITY
HQ COUNTRY
HQ CONTINENT
STOCK RETURNS
2001-2006*
REVENUE GROWTH
2001-2006*
MARGIN GROWTH
2001-2006*
PATENT CITATION
INDEX**
1 1 APPLE Cupertino, CA USA North America 50.60 29.21 NA*** 34
2 2 GOOGLE Mountain View, CA USA North America NA^ NA^ NA^ 1
3 4 TOYOTA MOTOR Toyota Japan Asia 20.50 8.30 5.21 361
4 6 GENERAL ELECTRIC Fairfield, CT USA North America 1.11 5.06 1.36 155
5 5 MICROSOFT Redmond, WA USA North America 0.83 11.85 -3.04 174
6 7 PROCTER & GAMBLE Cincinnati, OH USA North America 12.20 11.69 3.70 105
7 3 3M St. Paul, MN USA North America 7.77 7.35 5.49 57
8 43 WALT DISNEY CO. Burbank, CA USA North America 11.71 6.29 7.35 8
9 10 IBM Armonk, NY USA North America -3.48 1.26 4.97 94
10 13 SONY Tokyo Japan Asia -2.62 0.60 1.14 418
11 20 WAL-MART Bentonville, AR USA North America -3.35 9.79 3.54 0
12 23 HONDA MOTOR Tokyo Japan Asia 13.61 7.40 0.38 377
13 8 NOKIA Espoo Finland Europe -9.24 5.68 4.37 287
14 9 STARBUCKS Seattle, WA USA North America 30.04 24.07 1.51 2
15 22 TARGET Minneapolis, MN USA North America 7.55 8.32 4.23 0
16 16 BMW Munich Germany Europe 4.30 4.96 -1.23 84
17 12 SAMSUNG ELECTRONICS Seoul South Korea Asia 36.24 4.60 8.07 1000
18 11 VIRGIN GROUP London United Kingdom Europe Private Private Private 0
19 17 INTEL Santa Clara, CA USA North America -7.57 5.92 12.55 216
20 21 AMAZON.COM Seattle, WA USA North America 29.53 27.96 NA*** 0
21 70 BOEING Chicago, IL USA North America 19.91 1.12 -4.23 59
22 14 DELL Round Rock, TX USA North America -1.59 12.87 -5.24 16
23 27 GENENTECH South San Francisco, CA USA North America 24.50 34.85 32.40 4
24 18 EBAY San Jose, CA USA North America 12.45 51.47 4.91 1
25 28 CISCO SYSTEMS San Jose, CA USA North America 8.58 5.02 205.04 20
26 30 MOTOROLA Schaumburg, IL USA North America 10.10 7.40 NA*** 466
27 25 SOUTHWEST AIRLINES Dallas, TX USA North America -3.57 10.34 -1.98 0
28 15 IDEO Palo Alto, CA USA North America Private Private Private 1
28 19 IKEA Helsingborg Sweden Europe Private Private Private 0
30 31 DAIMLERCHRYSLER Stuttgart Germany Europe 4.22 -0.16 19.00 181
31 42 HEWLETT-PACKARD Palo Alto, CA USA North America 16.70 15.17 10.47 258
32 29 NIKE Beaverton, OR USA North America 13.21 9.58 3.78 822
33 40 BP London United Kingdom Europe 11.80 8.52 3.49 2
34 24 RESEARCH IN MOTION Waterloo Canada North America NA^ NA^ NA^ 34
35 NR AT&T San Antonio, TX USA North America 3.00 6.55 -7.27 16
36 NR CITIGROUP New York, NY USA North America 6.70 5.57 3.81 1
37 NR VERIZON New York, NY, USA North America 0.20 5.58 -6.80 5
38 67 ROYAL PHILIPS ELECTRONICS Amsterdam The Netherlands Europe -1.10 -3.56 NA*** 97
39 NR NINTENDO Kyoto Japan Asia 7.80 2.60 0.30 8
40 84 COSTCO WHOLESALE Issaquah, WA USA North America 4.07 11.57 -1.44 0
41 NR VOLKSWAGEN Wolfsburg Germany Europe 14.66 3.44 -18.88 4
42 55 PFIZER New York, NY USA North America -5.89 8.56 -4.36 15
43 NR BEST BUY Richfield, MN USA North America 8.86 10.71 3.20 0
44 53 JOHNSON & JOHNSON New Brunswick, NJ USA North America 4.14 10.02 1.33 31
45 87 AMGEN Thousand Oaks, CA USA North America 3.89 28.86 -4.33 1
46 NR MERCK Whitehouse Station, NJ USA North America -1.20 -13.86 6.16 7
47 NR NEWS CORPORATION New York, NY USA North America 11.00 14.19 4.18 0
48 100 MCDONALD’S Oak Brook, IL USA North America 12.87 7.74 1.61 0
49 85 LG ELECTRONICS Seoul South Korea Asia NA^ NA^ NA^ 394
50 51 EXXONMOBIL Irving, TX USA North America 16.75 15.03 9.09 17

Methodology
The BusinessWeek-Boston Consulting Group 2007 list of the World’s Most Innovative Companies is based on a senior management survey about innovation and was distributed electronically to executives worldwide in late 2006. In October, surveys were sent to the 1,500 largest global corporations, determined by market capitalization in U.S. dollars, with instructions to send the survey to their top 10 executives in charge of innovation. We also distributed the survey to senior management members of the BusinessWeek Market Advisory Board, an online panel consisting of BusinessWeek readers, and via the Knowledge@Wharton e-mail newsletter. Survey participation was voluntary and anonymous, and the survey closed in March, 2007. The survey consisted of 20 general questions on innovation and an optional 12 questions focused on innovation metrics.

A total of 2,468 executives answered the survey. Of those indicating their location, 77% were from North America, 12% were from Europe, and 9% were from Asia or the Pacific region. A larger share of North American voters this year may explain some movement in the rankings of some companies on our list.

Analysis and data provided in collaboration with the innovation practice of The Boston Consulting Group, BCG-ValueScience, along with Standard & Poor’s Compustat data and company reports, and the Delphion patent database. We broke ties by comparing one-year total shareholder returns between 12/30/05 and 12/29/06. In ties between a public and a private company, we assumed the private company’s shareholder return to be equal to the average return of the public companies on the list, or 19.6%. Ties remain only where two or more private companies receive the same number of votes.

*Stock returns are annualized,12/31/01 to 12/29/06, and account for price appreciation and dividends. Compound growth rates for revenues and operating margins are based on 2001-2006 fiscal year data as it was originally stated. Operating margin is earnings before interest and taxes as a percentage of revenue. Where possible, quarterly and semi-annual data are being used to bring performance for pre-June year ends closer to December 2006. Financial figures are calculated in local currency.

**The patent citation index reflects how often the company’s patents filed over the past five years have been cited as a basis for other innovation. The number is calculated by adding, for all patents filed between 2001 and 2005, the number of times each patent or application has been cited or mentioned by other patents up until December 31, 2006. We then adjusted the citation counts for patent age, since older patents have a greater likelihood of being cited than more recent ones. The age-adjusted counts were then indexed to a linear scale

***Calculating five-year compound annual growth rate for operating margins was not possible when either figure was negative.

Advertisements