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Climate Survey 1993
Early 1990's
- internal reporting requirements
- administrative processes
- top-down policies
To make the most of its existing assets and focus more intensively on customers
McCool initiated major studies of business processes and organizational effectivness
- flat demand for gasoline and other petroleum
- increased competition
- limited capital to invest in a highly capital-intense business
"...You didn't need an MBA to know we were in trouble"
Reorganization of USM&R, 1994
- Exploration & Producing (the "upstream" business)
- Marketing & Refining (the "downstream" business)
- Chemical
- Mining & Minerals
- Real Estate
sales and distribution units
integrated refining, sales and distribution units
- 17 Natural Business Units
- 14 Service Companies
specialized products and proces units
Mobil Corporation
Reasons for Reorganization
Goals of Reorganization
- operates more than 100 countries
- 18,9% increase in revenue
- 2,8% return-on-capital-employed, 1995
- 19,1% average annual return to shareholders
Mobil USM&R(A): Linking the Balanced Scorecard
- exceed index S&P500 more than 2% points
- "get staff costs under control"
- "learn to focus on the customer"
- "get everyone in the organization thinking"
- USM&R decided to focus on 59% of gasoline buyers (first three segments)
- upgrade all service stations
- redesign and reorient Mobil's C-stores
- newly developed strategy on customer segmentation
- Road Warriors (16%)
- True Blues (16%)
- Generation F3 (27%)
- Homebodies (21%)
- Price Shoppers (20%)
USM&R Balanced Scorecard
Results
- USM&R's income per barrel = $1.02
- Global operating return from refining, marketing and transportation operation = 10.1% per dollar
McCool concluded:
"In 3 to 4 years, we have come... to a company that ranks #1 in its peer group, and generates hundereds of millions of dollars of positive cash flow"