This paper explores the Analysis of ExxonMobil -history and mission, generic strategy positioning. It also focuses on the corporations key resources and capabilities, core strategy, detailed strategy, business model, value chain. The paper also gives an Analysis of Shell -history and mission, generic strategy positioning. The research in the paper continues to elaborate on its’ SWOT analysis, key resources and capabilities, core strategy, detailed strategy, business model, value chain. The paper lastly Concludes with key points of company comparison, and challenges and recommendations for the future.
History and mission of Exxon Mobil
The Exxon Mobil Corporation is an American multinational oil and gas corporation that operates across the globe and has its headquarters located at Irving, Texas. It was formed in 1999 through a merger between two major oil companies, Exxon and Mobil. Both companies were direct descendant of john D. Rockefeller’s Standard Oil Corporation, a company that was established in 1870. This company is engaged in the exploration, production, refining, and supply of oil and natural gas. It is also engaged in the production of petrochemical products, chemicals and generation of electricity.
Following a public outcry about the operations of John D. Rockefeller’s Standard Oil corporations, the United States Supreme Court ruled that Standard Oil should be dissolved ad split into 34 companies. Two of these companies, Standard Oil Company of New Jersey became Exxon and Standard Oil Company of New York became Mobil. Both companies grew significantly and in 1998, Exxon and Mobil signed an ultimate agreement to merge and form a new company called Exxon Mobil Corporation, the largest company all over the world. After regulatory approvals the amalgamation was completed in November 30, 1999.
According to Forbes global research, ExxonMobil has been ranked at top position for the past five years in a row. It is one of the largest publicly traded companies in the world. Exxon is the world’s largest refiner, a title similar to one associated with Standard Oil since it was incorporated, with about 72 billion oil-equivalent barrels of oil reserves by the end of 2007. Exxon Mobil has 37 oil refineries in 21 countries, which constitutes to a combined refining capacity of approximately six million barrels daily. These reserves are expected to last for a period of over fourteen years approximately.
The company’s mission is taking on the world’s toughest energy challenges. ExxonMobil is the largest of the six oil super majors with a daily production of about four million oil equivalent barrels. It markets its products all over the world under the brand names of Esso, Mobil and Exxon. It also owns other smaller subsidiaries such as Sea River Maritime, a petroleum shipping company and Imperial Oil Limited in Canada. The upstream division dominates the company's cash inflow, accounting for approximately 70% of the revenue Exxon Mobil earns. As indicated in their report, this company has employed over 82,000 people worldwide.
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The reunion of Exxon and Mobil resulted in the biggest merger n US corporate history. In 2000, ExxonMobil sold a refinery in Benicia, California and 340 Exxon-branded gas stations to Valero Energy Corporation as part of the Federal Trade Commission mandated divesture of its California assets. However, this company still supplies petroleum products to over 700 Mobil-branded retail outlets in California.
In 2005, oil prices rose and also ExxonMobil's stock price went up becoming the leading corporation globally in terms of market capitalization in comparison to other large industries such as banking and pharmaceutical industries. At the end of 2005, it reported a 42% increase in income from the previous year recording a profit of US $36 billion in annual income. In 2008, this company publicized that it was exiting the retail fuel trade, quoting the increasing difficulty to operate gas stations under the rising crude oil costs. Approximately 820 company-owned stations and 1,400 other stations operated by dealers distributing oil across the United States will be affected by this multi-year process which will gradually phase Exxon Mobil out of the direct market. However, this sale will not result in the disappearance of Exxon Mobil branded stations, since the new owners will continue to sell ExxonMobil gasoline and license the appropriate names from ExxonMobil, who will in turn be paid for use of the brand. (Welch, 2003)
Exxon Mobil Corporation - SWOT Analysis
The strengths, weaknesses, opportunities and threats- SWOT analysis of ExxonMobil examines the history and products, the main business operations and structure and also provides a summary of the company’s main revenue sources and future strategies. Through this data monitoring of the company, the management is able to better manage the organization as this profile is a vital source of information and data for the top-level management.
Exxon Mobil Corporation has various strengths that give it a competitive edge over other companies in the oil industry. Among these strengths is the fact that it has an established title that has been in existence for over a hundred years. This gives the consumers a sense of security when dealing with the company. This company has also broadened its horizons into many other different areas of the energy industry and has various strong brands under its main group. The organization has in the past been able to earn itself a good reputation, which has enabled it to survive without bleach to its reputation even after the oil spill. This is partly attributed to the appropriate crisis communication and crisis management strategy and good business citizenship of the organization. The company has been inventive in the past and has continued to be very innovative presently too, by undertaking a lot of research and development works to come up with more effective and efficient ways to control the energy resources and lessen the negative impacts of oil pollution to the environment.
Exxon Mobil is an organization that has a worldwide presence and therefore has access to a wider consumer base and enjoys a larger market than the other energy companies. This company has an incredibly strong presence in both China and India, which are the emerging markets whose energy demand levels have increased exponentially in the recent past. Consequently, the organization has earned from this venture at a higher rate than moost other organizations in the same industry.
On other hand, Exxon Mobil has its weaknesses and drawbacks which have had a negative impact on its reputation. For instance, this company has been accused of destroying and polluting the environment instead of making efforts to conserve it. While the rest of the world is fighting to go green in terms of energy resources, this company is aiming at exploring more sites to mine oil from, this drillings and deepwater exploration of oil has been perceived by most people and groups as a move aimed at thus destroying the environment. The Exxon Valdez spill has impacted negatively on the image of the company, with the human rights groups generating negative rumors about the organization to the public and its employees. Further, this company has suffered negative publicity for exorbitant profits from the escalating oil prices in the recent years. This has cost it the goodwill earned from its consumers who think that the company is becoming rich at their expense.
Exxon Mobil has various viable opportunities in the oil industry. The major opportunity available to this company is the currently increased demand for oil energy by developing states more so in Asia like Korea, Malaysia and Indonesia. (H, 2005)
With opportunities also come threats, from the recent recession by developed countries. This has reduced the levels of oil energy consumption among the developing countries like India and China that have been the largest demanders of oil energy in the recent past. Due to the recession, these countries have opted for other sources of energy like solar power, hence causing the company to lose out on their projected levels of revenue. Also, the increased attention by environment conservatism groups has led to a great decline in the use of oil energy. Such reduced use of energy will in the future cause a reduction in the profit levels of the company.
Key resources and capabilities
Key resources include already proven reserves and other viable quantities of oil and gas that are likely to be produced in the future. Yearly resource additions of oil have exceeded two billion barrels of oil-equivalent since 2000, these resource additions have been in most of the major oil reserves in the world which include the Middle East and Australia, the Caspian, the Gulf of Mexico and West Africa. In order to achieve these results, they rely on a functional and global approach to put superior technology, talented people and the appropriate investments.
This Company is charged with exploring and adding new oil and gas resources to replenish those already produced, in order to enable future production growth. With a leadership position in all of the major exploration areas worldwide and exploration activities in approximately 40 countries, ExxonMobil Exploration and subsidiaries have the oil industry’s largest exploration range.
This portfolio includes more than 60 million gross undeveloped acres and a total resource base of 70 billion barrels of oil-equivalent, which includes established reserves of 20 billion oil-equivalent barrels. Safety at Exxon Mobil is a core value, as regards safety and health in the places of work. This has enabled the company to ensure an enduring and sustainable performance.