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Exxon- Mobil: A Corporate

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Giancarlo Montenegro

on 9 December 2013

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Transcript of Exxon- Mobil: A Corporate

Exxon- Mobil: A Corporate
Analysis

History
Leadership
Walter C Teagle
- Responsible for leading Standard Oil of New Jersey (Later Exxon)to forefront of oil industry
- Director of Standard Oil in 1910, eventual VP in 1913
- Became youngest President of St. Oil (Age 39) (1917-1937)
- Increased market share nearly fourfold
- Charismatic Transactional

Rex W. Tillerson
- Chairman and CEO since 2006
- Transactional

Lee Raymond
- CEO of Exxon during Mobil merger
- CEO and Chairman of Exxon-Mobil (1999-2005)
- Transactional

Lucio A. Noto
- CEO of Mobil at time of merger
- Transformational

John D. Rockefeller
- Founder of the Standard Oil Company
- Turned Exxon into the first oil monopoly
- Charismatic Transactional
Culture
Exxon- Mobil can be categorizes as having a strong adaptive culture.
-Fluid
-Flexible
-Innovative
Structure
ExxonMobil is: Organic
1. Flexible
2. Creative
3. Fluid
4. Employee empowerment and safety
General Environment

Sociocultural – Anticipation of increased regulation stems from global concerns of global warming, carbon emissions, etc.

Economic – Current Global GDP has slowed drastically since 2007 ($71.6 T), heavily tied to industry growth, 18% decrease in consumer oil spending

Poli/Legal – Global Supply frequently threatened since many OPEC countries are economically and politically unstable, Highly regulated industry as a whole

Demographic Shifts – Aging Workforce, along with a shift to emerging geographic markets

Technological- Hydraulic Fracturing, Liquid Natural Gas, Deep Water Exploration, Directional Drilling

Global Issues – Ongoing wars and general instability, in conjunction with government regulators and environmental concerns create a general arena for concern in this industry
Mission Statement
"Exxon Mobil Corporation is committed to being the world's premier petroleum and petrochemical company. To that end, we must continuously achieve superior financial and operating results while simultaneously adhering to high ethical standards. By running the business profitably and ethically, we expect our investors to be rewarded with outstanding returns. Our success depends on our ability to meet the rapidly changing customer preferences. We want to produce high quality products at competitive prices. We wouldn’t be able to compete on a global level without the exceptional quality of our workforce. We are dedicated to running safe and environmentally responsible operations. While we maintain flexibility to adapt to changing conditions, the nature of our business requires a focused, long-term approach. In order to maintain a competitive advantage over our rivals, we must strive to use the most advanced technology possible to be the world’s leader in oil and gas"

Vision Statement
"Exxon-Mobil Corporation aims to be the competitive leader across all of our business ventures. This requires proper allocation of our resources - technological, operational, financial, and personal in order to maximize our efforts"
Porter's 5 Forces
Business rivalry - high because of the commodity-based nature of the business. In addition, there is competition with other industries that supply chemical, energy, and fuel for consumers

New entrants - low because barriers to entry include high capital cost, economies of scale, distribution channels, proprietary technology, environmental regulation, geopolitical factors, and high levels of industry expertise

The threat of substitutes is low and comes from nuclear power, hydroelectric, biomass, geothermal, solar, photovoltaic, and wind. Nuclear and hydroelectric energy sources are not a threat within the next decade because of government regulation, environmental concerns, and a high barrier to entry.
Corporate Governance
Board of Directors
- 13 Members
Current CEO/Chair - Rex Tillerson
Committees
-Audit
-Compensation
-Board Affairs
-Finance
-Public Issues and Contributions
- Executive
Informal
Basing decisions on facts & figures
Results Oriented
Taking initiative & rising to the challenge
- ExxonMobil has a divisional based organizational structure by product.

- Consists of 10 core companies
CPM
SWOT
Distinctive
Competencies:

Space Matrix
Porter's Generic
Strategies
Top 15 Stakeholders
Financial Strength (Score 1-6)
Liquidity 5
Leverage 5
Activity 3
Growth 4
Profitability 4
Equity 3
Cash 4
Total Average Score 4
Competitive Advantage (Scored -1 to -6)
Top 5 CPM Factors:
Market Share -2
Security -2
Global Presence -1
Financial Strength -3
Economies of Scale -2
Product Life Cycle -4
Technological Knowhow -3
Brand Image -2
Total Average Score -2.37

Industry Strength (Scored 1-6)
Suppliers 4
Distributors 3
Consumers 5
Competitors 2
Substitutes 2
ADD Growth Potential 3
Financial Stability 4
Profit Potential 4
Technological Knowhow 3
Resource Utility 3
Total Average Score 3.3

Environmental Stability (scored -1 to -6)
Demographic Shift -4
Sociocultural Trend -3
Economic -2
Technological -1
Poli-Legal -3
Global -3
Risk Involved in Business -2
Total Average Score -2.57

Space Matrix
As the space matrix is placed in Quadrant 1, they are considered aggressive, and are free to pursue any of the strategies we have chosen for potential implementation
1911
1999
1989
John D. Rockefeller
- Started the Standard Oil Trust 1870
- Controlled most of the oil production; Moved to
New York in 1885

1882 - Standard oil of New York (Saucony), Standard oil
of New Jersey (Jersey Standard)
Standard Oil Trust dismantled
into 34 different companies
1966 - Standard oil of New York
became Mobil Oil Corp.
1972 - Standard Oil of New
Jersey becomes Exxon Corp.
December 24, 1989
- Exxon Valdez Oil Spill
Exxon Corp. bought Mobil Corp.
to officially become ExxonMobil
Strategy Recommendation
Recommendation Cont.
ExxonMobil operates as a low-cost-producer
Achieves cost leadership by competing through technological & operational efficiencies
Their Chemical division operates under a best-value strategy
Leadership in production costs and proprietary chemical and polymer offerings prove the use of this strategy
Strategy Recommendation: Australia
1. Area Energy
2. Esso
3. Esso Australia
4. Imperial Oil
5. Exxon Neftegas
6. Mobil Producing Nigeria
7. SeaRiver Maritime
8. Superior Oil Co.
9. Vacuum Oil Co.
10. XTO Energy
1870s
Supplier Power - Suppliers are the oil mining and extraction firms (includes Exxon). Their power is high because OPEC controls 40% of oil supply. Power does fluctuate somewhat pending the price of the commodity, as is the nature of the market.

Buyer Power: Industrial buying power is low because upstream suppliers have incentive to limit supply; keep prices high. Individual buyers have just as low power as high volume of demand increases despite economic hardship and lack of growth
Investment in
R+D
Making sure
employees know
how to perform
Patents on new
equipment and
technology
Exploration
Production
Refine and selling
crude oil and
natural gas
Financial Ratios
Strategic SWOT
Strategy
Strategy
QSPM
IE Matrix
Estimated total recoverable resource in excess of 40 trillion cubic feet of natural gas
Pipeline will allow the continued delivery of crude/condensate
will also ensure that natural gas from our offshore Gippsland operations continues to flow to Australian households and businesses
expand to include onshore exploration activity
minimize energy consumption and flaring which directly reduces greenhouse gas (GHG) emissions

Formed a partnership with Russia’s Rosneft last year

Exxon raised its long-term global energy demand growth estimate to 35 percent

Strategy: Africa
-Constructive strategy would be to further invest in these new technologies

- Initiate a joint venture with a pre-existing green energy company and attack this potential market
that by partnering with Statkraft in Europe we will save cash assets

- Should invest specifically in hydropower and wind power projects

-Already has presence in the wind energy sector with their synthetic gear oil lubricated over 40,000 wind turbines all over the world

-Working for over 100 years now is in Southeast Asia and India
-Singapore is the Asia Pacific hub for ExxonMobil’s downstream and chemical business
-The ever expanding population and markets within Asia and all of the country’s
surrounding it make it a key find in the expansion
-Center hub for all of Asia and the South Pacific
Full transcript