What is a sure sign that a business has too much power?

If a company can create an impact on the country’s GDP it’s a sure sign that a business has too much power.

Short Answer

Imagine your day starts with checking your Whatsapp on your Samsung Galaxy. You get ready to drive your Tata Tiago, Google maps shows traffic. You are low on petrol decide to halt at Reliance petrol pump. At work, you start working on your Macbook while your favorite music is playing on Amazon music. In between, you check stock market news about Saudi Aramco on Money Control app. As the weekend approaches it’s time for Netflix and chill.

Long Answer

  • FAANG (Facebook, Amazon, Apple, Netflix, Google)
  1. Data is the new oil and these companies thrive on user data. Can you imagine your day without using the ecosystem provided by FAANG companies? More importantly, they have the power to change user perception and consumer behavior.
  2. Makeup about 15% of the S&P 500 which is generally viewed as a proxy for the US economy as a whole → US GDP of $24.28 Trillion
  3. Market capitalization of over $4.1 trillion as of January 2020
  • Samsung Group (South Korea)
  1. Contributes 12.5% to South Korea’s GDP of $1.7 Trillion.
  2. 25% market capitalization in South Korea’s benchmark Kospi stock index
  3. 1,80,000 employees directly employed

  • Saudi Aramco (Saudi Arabia – 100% state-owned)
  1. Pumping about 10 % of the global supply.
  2. World’s 2nd largest proven crude oil reserves, at more than 270 billion barrels
  3. 23% Saudi Arabia’s GDP of $779.29 Billion is based on oil rent
  4. Most profitable company in the world, $110.9 Billion profit
  5. Assets worth $358 Billions
  6. The firm’s net income in 2018 was $111.1bn > Combined net income of oil giants (BP PLC, Chevron Corp, Exxon Mobil Corp, Royal Dutch Shell PLC and Total SA)

In Indian Perspective

Tata Group and Reliance are 2 major conglomerates which hold significant power

Tata Group

  • There are 28 publicly-listed Tata enterprises with a combined market capitalization of about $160 billion (as on March 31, 2019)
  • Employs 7,20,000 employees

Reliance Industries Limited

  • Market capitalization of $141 billion
  • 3.3% contribution to India’s GDP of $3.2 Trillion

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