ExxonMobile Critical Success Factors Essay Sample

July 19, 2017 Marketing

ExxonMobile Corporation is the 2nd largest integrated oil company in the universe. In 2011 it ranked 3rd in the world’s largest companies with a gross of $ 354. 674 million and entire net income of $ 30460 million.

ExxonMobil has evolved from a regional seller of kerosine in the U. S. to the largest bargainer of crude oil and petrochemical endeavor in the universe. They are best known by their familiar trade name names: Exxon. Esso and Mobil and they supply to more than 40. 000 service Stationss under this name. They make merchandises that drive modern transit. power metropoliss. lubricate industry and supply petrochemical edifice blocks that lead to 1000s of consumer goods. The company has 38 oil refineries in 21 states with a combined refinement capacity of 6. 3 million barrels. Its day-to-day production is 3. 921 million barrels of oil equivalent. They employ around 80000 people in locations around the Earth.

ExxonMobil’s history goes back to the 1870 when John D. Rockefeller and spouses formed the Standard Oil Company. By 1878 Standard Oil controlled 95 % of the U. S. refinement capacity. This had been achieved by giving cut pharynx competition to the rivals. and by acquiring secret discounts.

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In 1882 Standard Oil Trust was formed. This attracted all the interested groups of oil manufacturers. In 1911 the U. S. Supreme Court eventually broke the Standard Oil Trust into 34 different companies. Two new companies were Jersey Standard and Socony. the main predecessor companies of Exxon and Mobil severally. Over the old ages the two companies spread their involvements to all over the universe

In 1931 Socony merged with Vacuum Oil Company. an industry innovator founded in 1866 and a turning Standard Oil by-product in its ain right. Socony changed its name to Socony-Vacuum. Socony-Vacuum became Socony Mobil Oil Co. in 1955 and. merely Mobil Oil Corp in 1966.

Mobil Chemical Company’s chief merchandises were alkenes and aromatics. ethene ethanediol and polythene. The company produced man-made lube base stocks and lube additives. propene packaging movies and accelerators. Manufacturing installations were located in 10 states.

In 1972 Jersey Standard changed its name to Exxon Corporation as a hallmark throughout the United States. Esso hallmark was continued to be used in other states. In 1970 Exxon. Mobil had developed in the Middle East. Africa. Asia. Gulf of Mexico.

Exxon Chemical Company was a major manufacturer and seller of alkenes. aromatics. polythene and polypropene along with merchandises such as elastomers. plasticisers. dissolvers. procedure fluids. oxo intoxicants and adhesive rosins. The company was an industry leader in metallocene accelerator engineering to do alone polymers with improved public presentation. Manufacturing installations were located in 24 states.

In 1999. Exxon and Mobil merged together and formed a new company called ExxonMobil Corporation. This was the largest amalgamation in the history. This proved to be a great advantage for them and they became more competitory in the volatile universe. The bing Mobil stockholders own about 30 per cent of the new company. while bing Exxon stockholders own about 70 per cent.

This company has a comparative advantage over its rivals due to economic systems of graduated table that aid in cut downing the production costs and besides technological advantage that helps in cut downing these costs through optimum boring and grapevines used in transporting their merchandises.

The long established trade name name of ExxonMobil gives clients a sense of security while covering with the company. The company spends a batch on research and development to come up with efficient ways to pull off the energy resources and cut down the negative impact on the environment. They are really committed in taking action to cut down nursery gas emanations. This includes puting in energy efficiency in their installations. working with car and engine shapers on plans that could significantly cut down vehicle emanations. The biggest chance of this company is the increasing demand of energy by taking economic systems in the South Asiatic and South East Asiatic parts like Vietnam. Malaysia. Korea and Indonesia.

The factors which have lead to the success of ExxonMobil are:

Committedness to engineering leading

Global distribution and strong trade name image

Large refinery capacity and fiscal strength

Vertical integrating of concern

Cost efficiency and increased net incomes

Competitive advantage

CRITICAL SUCCESS FACTORS OF EXXONMOBIL:

COMMITMENT TO TECHNOLOGY LEADERSHIP

Technology leading is another critical factor contributes to the success of Exxon Mobil in the oil and gas industry. Obviously. in this country. the engineering leading is chiefly used for researching. detecting. refinement. storing. and transit oil merchandises. Hence. the ability to happen new energy beginnings in shortest period of clip in any status has been seen as an indispensable component of any oil companies want to be the market leader. It determines the efficiency. productiveness. quality. dependability and high criterion merchandises of an oil company like Exxon Mobil.

Committedness to engineering invention helps Exxon Mobil additions foremost mover advantages over its rival in this industry. It besides helps Exxon Mobil expedites and cuts down the clip devouring in detecting oil beginnings and gas. In Addition. it enables Exxon Mobil explores oil and gas in unconventional countries such as deep sea and tar littorals or in really difficult conditions. On the other manus. Exxon Mobil is able to cut down costs of production and heighten delivery merchandises into the supply concatenation from feasible oil beginnings to marketplace quicker than other rival to run into up energy demands.

For illustration. Exxon Mobil has taken advantage on speed uping and low costs production by using advanced engineering. Exxon Mobil used “Fast Drill Process” is new engineering which made an of import public presentation betterment in boring operation of Exxon Mobil in recent old ages. This technique ensures the efficiency and speeds up the timing of boring procedure. It has resulted public presentation betterment of Exxon Mobil up to 100 per centum. Another illustration. Horizontal Drilling technique which allows Exxon Mobil explore natural gas in unconventional countries. It enables boring a 1000s of pess vertically follow by drill a thousand pess horizontally along targeted reservoir. It consequences good bore to reach a larger cross subdivision which addition efficiency of boring procedure and productiveness rates.

GLOBAL DISTRIBUTION NETWORKS AND STRONG BRAND IMAGE

Global distribution web and well-marketing scheme besides play of import functions in the the success of ExxonMobil in the oil and gas industry. Equally far as concern. Oil and gas are trade good merchandises hence it is really of import to convey them to the right market places with sensible monetary value. Constructing a planetary distribution webs enhances the capacity and distribution efficiency of ExxonMobil’s merchandises to the market and concluding clients quicker than other rival such as Chevron and Shell. It will carry through the outlook of clients and do them satisfied. It besides cut down the cost and increase the profitableness of production. As we know. ExxonMobil is the world’s largest oil company which operates in more than 100 states with over 40. 000 retail service station that enables ExxonMobil to present dependable and high quality merchandises to clients around the universe.

Following. ExxonMobil is a celebrated trade name which exist in the most market place around the universe. It is really easy to recognize its trade name image at anyplace. In the oil and gas industry. the overpowering popularity of ExxonMobil is noncontroversial. Almost drivers are the loyal client of ExxonMobil. merely because of its trade name name is widely accepted globally. ExxonMobil has positioned as the leader who provide dependable services. high quality merchandises. competitory pricing. With the right scheme ExxonMobil has built a good relationship with clients along the history. It is difficult for ExxonMobil to distinguish itself with other rivals because oils and gas merchandises are trade goods therefore ExxonMobil better to construct a good trade name image in the heads set of clients. ExxonMobil has been successful in constructing a clear image which increases client trueness. trade name consciousness and leads to quicker and reiterating purchase determinations by consumers. ExxonMobil has spent immense budget for corporate societal duty to keep its trade name image by and large for big consumer audiences and therefore the consequence will be effectual over a longer period of clip.

Corporate societal duty refers company’s activities towards the community and environment which it operates in. Back to April 2010. the image of ExxonMobil has been damaged by the largest Oil Spill in US which killed 11 people and consequence in leaking oil and gas on the ocean floor about 42 stat mis off the seashore of Louisiana. Concentrating on corporate societal duty helps ExxonMobil solves this job and maintains repute as high value trade name which attention about the peoples. society and the environment. For illustration. ExxonMobil contributes over $ 35 million yearly through its foundation to a broad assortment of corporate societal duty in the countries of wellness. instruction. environment. humanistic disciplines. museums. adult females. minority involvement and community services.

It has made great part in bettering the measure and quality of malaria grant proposals. Besides. Exxon Mobil responds to the planetary fund’s challenge to assist better the intolerably low rate of malaria grant applications from hapless countries such as Africa. ExxonMobil have ever tried to be the first to derive entree to a market and to turn along with that market by supplying occupations. investing and economic chances. ExxonMobil provides community members the ability to afford an improved criterion of life.

Large REFINAERY CAPACITY AND FINANCIAL STRENGTH

Refinery capacity is one major factors contribute to the success of ExxonMobil in the oil and gas industry. Obviously. in this country. the company has refinery capacity is able to bring forth and fabricate big sum of high quality oil and gas merchandises from its ain installations to run into up the demand of consumers. In contrast. if the house is unable to supply required end product volumes clients will exchange straight to other rival due to the nature of trade good merchandises. Harmonizing to the instance. ExxonMobil has the largest refinery capacity 46 refineries in 26 states and distillment about 2 million barrel day-to-day basic and production efficiency hence it additions competitory advantage over competitions which guarantee the success of ExxonMobil. Large refinery capacity enables ExxonMobil to capture supply and logistics efficiencies and supplier adequate oil and gas merchandises to the supply concatenation which carry throughing the outlooks every bit good as the demands of energy markets. It besides helps ExxonMobil better feedstock flexibleness and lower site-operating costs.

On the other manus. fiscal strength is another indispensable factors in the success of ExxonMobil. Equally far as concern. The oil and gas industry is a really intensive capita concern which required heavy investing. To be success an oil house must put a batch of money for buying fixed assets such as mill. equipment. engineering. distribution web. and refinerie which cost billion of dollar. Furthermore. geographic expedition of newer oil and gas beginnings and the ability to setup good production procedure will take considerable sum of money and clip consuming. Hence. an oil house like ExxonMobil must hold a strong fiscal backup to maintain path with demands of market place. Financial strength besides provides ExxonMobil the ability to supply merchandises to market.

Apart from capital intensive fabrication and assets. the industry’s accident prone nature requires companies to be prepared taking high degree of hazard. Without fiscal stableness oil houses can non retrieve its concern if the investing fails or capital dislocation. ExxonMobil has important fiscal stableness to put to death this successfully comparing to other rivals in the market. ExxonMobil’s turning net income is justified by its increasing trade name value over decennaries. Its earning net income is far better than any other competitions in the industry. Based on fiscal strength. ExxonMobil can reinvest in engineering. invention and selling. refinery capacity to heighten the productiveness. efficiency fabrication and deriving economic sciences of graduated table which consequence in more profitable in the hereafter.

VERTICAL INTEGRATION OF BUSINESS

Vertical integrating of concern is puting in other concerns within the same industry which carries out and sustains the nucleus concern. This helps the concern to derive power and control of the entire production. cut down on cost on and in add-on to it generates gross for them.

ExxonMobil have vertically integrated themselves in all concerns which involve oil. geographic expedition. boring and petrochemical refinement. Exxon and Mobil are posterities of The Standard Oil Company. In 1870. the company vertically integrated its concern by holding ownership of a barrel-making works. dock installations. convoy of railway armored combat vehicle autos. warehouses in New York. and land for providing timber which is used in bring forthing barrel staffs and doing them all an of import supporting concern for the company. Due to this policy of perpendicular integrating. the company made immense net incomes of $ 830 million from 1899 to 1911.

In 1931. Mobil which was earlier known as Socony Mobil Oil Company merged with Vacuum Oil Company and subsequently in 1959 got merged with the Magnolia Petroleum Company which had a market capitalisation of $ 125 million and was a major refiner. seller and grapevine transporter at that clip. All the operations of the company were taken over by Socony. except for its marine transit in the United States and Canada.

Recently in 2009 the company decided to purchase XTO Energy for $ 31 billion in stock and $ 10 billion in debt which is a natural gas manufacturer. and this has been the greatest energy amalgamations in old ages. This trade would supply the company with approximately 45 trillion three-dimensional pess of natural gas throughout the United States and the demand for this will go on lifting.

This factor of perpendicular integrating has helped the company to carry through their ends and take power of every market niche in each several industry.

Cost EFFICIENCY AND INCREASE OF PROFITS

Several concerns don’t make adequate net income. the ground being they run high on cost. By following to be cutting steps in concern operations. a batch of money can be saved. therefore increasing net incomes for the company.

Exxon Corporation’s chief scheme was to cut cost and remain profitable even during the falling of oil monetary values in 1980 and 1990. By the twelvemonth 1996. the company’s runing cost was lessened by $ 1. 3 billion on a annual footing. doing a net income of $ 7. 51 billion during that twelvemonth. Their disposal doctrine is to do certain that their operations are unflawed. better efficiency and profitableness. and do stockholders gain net incomes excessively.

For illustration in one of the Memorandums submitted by ExxonMobil in 2011 on promoting declines in nursery gas. the company declared that it believes in a well-designed and revenue-neutral C revenue enhancement emanation which would be really cost effectual to the company. This along with new engineering would assist cut downing GHG emanation doing a diminution in cost and an addition in production.

The subordinate of ExxonMobil in Australia believes that regardless of the clime alteration. the increasing GHG emanations cause hazard to society and disrupts the ecosystem. They adapted to schemes which were sustainable. stable. seeable and simple and which helped maximum decrease in gas emanations at the least cost to society and an increased production for the company.

This factor has helped the company earn immense net incomes twelvemonth after twelvemonth and has been having on the Fortune 500 list since old ages and being ranked on the 2nd place in the 2011 list.

COMPETITIVE Advantage

ExxonMobil has several competitory advantages in their industry. The chief cardinal advantage of the company is their duty and alone committedness towards engineering that make the concern to larn. develop. create. refine and market the oil and gas resources which are non available to the rivals. It maintains a strong committedness towards engineering compared to all other companies in the industry. They derive legion and outstanding technological finds from the sum of research and development done by them. The planetary web the company has is greater than all the other crude oil companies in the universe. They have been consistent in seeking to develop engineering that provides them with a competitory border.

The quality of all its refineries besides provides a competitory advantage to the company. The refineries owned by the company are amongst the largest in every geographical country. They are 50 % more than the mean industry size. Besides this more than 80 % of their refineries are combined with chemical or lubes operations. This combination provides a competitory advantage to the company through improved feedstock snap and lower site operating costs.

The employees of the company besides provide a valuable competitory border to the company. The company hires and preserves the most qualified people available and gives them several chances for success through rigorous preparation and development. The company works in a safe environment which is enhanced by diverseness and gives employees a just intervention and an chance to show themselves at all times.

Therefore the competitory advantages of ExxonMobil have helped them maintain up the rubric of a leader in all the industries they contribute in. With the other competitory advantages of planetary operation company. committed employees. fiscal strength and a singular portfolio of chances have helped the company rise as a awful rival in this dynamic market place.

RECCOMENDATIONS:

To keep its place as the taking energy manufacturer. ExxonMobil must be willing to take

on the world’s toughest energy challenges. It must concentrate on sharpening its operational excellence. To accomplish sustainable competitory advantage. ExxonMobil must put in technological invention that will assist the company distance itself from its competition. The undermentioned paragraphs provide a description of the recommendations which ExxonMobil can set about.

1. Addition INVESTMENTS IN OIL EXPLORATION. PRODUCTION AND REFINING.

ExxonMobil should step up its investing in conventional oil from proven Fieldss and new oil dramas which will assist increase the near-term gross. ExxonMobil has about 2. 1 million net estates in the Gulf. The company besides discovered a big oil modesty at the Hadrian composite.

These would be good chances to put. ExxonMobil should spread out activities on the basin where the company was successful in the past – e. g. Indonesia. Gulf of Mexico. and Angola. Africa. ExxonMobil late discovered new basins in the Black Sea where it now holds about 6. 3 million net estates. ExxonMobil should step up investings in these attractive chances to hold a moderate hazard profile. This would be a cardinal determiner of execution of engineering and expertness to detect and develop oil in unproved Fieldss.

2. EXPAND CHEMICAL OPERATIONS INTERNATIONALLY. TARGET EMERGING MARKETS.

ExxonMobil has a really good chance to utilize its selling and geographical presence to present its merchandise development scheme to emerging markets. This recommendation would assist the company better both the cost drivers and value drivers.

3. Focus ON INCREASING WHOLESALE SALE AND RETRENCHING RETAIL SALE

With over 26. 000 service Stationss and 600. 000 commercial clients in the retail operation. the retail mercantile establishment is one of the large cost constituents in the Downstream concern. There is an chance to increase the sweeping client base through longterm contracts. By implementing this. the company can sell merchandises rapidly to increase stock list turnover. ExxonMobil can besides salvage costs through cut downing its retail shops through depriving retail gasolene Stationss in strategically less important locations. avoid regenerating rentals and transportation.

4. INVEST IN NATURAL GAS EXPLORATION AND PRODUCTION

Natural gas is a preferable beginning compared to char or oil because of its increasing consciousness and concentrate on the environment. Natural gas monetary values are still excessively low for ExxonMobil to do an aggressive investing that could turn out extremely profitable. For the monetary value of natural gas to increase. the demand for and acceptance of natural gas demands to increase. But the investing in natural gas now would turn out profitable in the long term.

5. INVEST IN UNCONVENTIONAL OIL AND GAS PLAYS

ExxonMobil should do a long-run committedness towards unconventional dramas. Chevron has been successful in unconventional energy by taking necessary and deliberate hazards. as apparent from its recent oil discoveries in Wafra3. There is an chance for ExxonMobil to set up a dominating place by moving early. but can non wait so long to make so that Chevron is able to construct a important advantage.

Execution Scheme: To successfully put to death this recommendation and operate productively. ExxonMobil must procure an attractive place early through its technological art and so accomplish economical cost of production and output through its operational excellence. Investing in lone geographic expedition and production is non plenty. as the substructure and engineering needed to transport and treat heavy petroleum and unconventional gas is much different. This might necessitate the company to reshape certain value concatenation activities with newer engineering and efficiency procedures. impacts due to this recommendation. ) This may besides necessitate the company to turn up or relocate processing workss closer to production activities as heavy petroleum transit has been a combative issue. as apparent from a Wall Street Journal article titled “Oil-Sands Pipeline Fuels

Organizational Impact: ExxonMobil is a company with long-run vision. and is much more conservative than its rivals. as evident from the type of hazards that Chevron assumes ( e. g. early mover in Russian oil Fieldss and early mover to Wafra ) versus the type for hazard that ExxonMobil avoids. Executing this recommendation would necessitate the company to take deliberate hazards which in bend would necessitate leading committedness and an organisational and cultural head displacement. Implementation attack: Since unconventional drama is hazardous due to geological. operational and technological terra incognitas. ExxonMobil should seek joint ventures where possible. This would assist equilibrate the conservative internal civilization and the demand to take a measured hazard to be competitively strong.

Fiscal Impact: ExxonMobil has the fiscal strength and strong direction subject on its side to do this happen. By transporting out this recommendation. ExxonMobil stands to better its modesty replacing ratio. which would act upon the overall rating of the company.

6. INVEST IN RENEWABLE ENERGY SOURCES

The growing in renewable energy is projected to be the fastest among assorted energy beginnings but is non likely to be profitable. ExxonMobil must do an incremental and meaningful investing in this maintaining in head the corporate societal duty and stockholder involvement entrepreneurial ventures and academic research. This will besides assist ExxonMobil remain competitory and would hold a technological invention in the company.

7. IMPROVE ETHICAL OPERATING Standard

ExxonMobil’s go oning investing in educating. monitoring and purely implementing ethical. anti-corruption and other operating criterions would better the company’s operational and fiscal strength.

Mentions

Harry J. . Longwell. 2002. The hereafter of oil and gas industry: Past attacks and new challenge. World energy mentality 2002. vol. 5. issue 3

Davis. H. . Hale. W. . Long. M. . and Wilburn B. . ( 2008 ) . “One Hundred 20 five old ages of History” . ExxonMobil Corporation. Texxas.

Kannan A. . Bhajiwala P. . 2011. Exxonmobil taking on the world’s toughest energy challenge. working paper MGMT 619: Finishing touch. Santa Clara University. 2011

O’Brien D. . 2001. Integrating Corporate Social Responsibility with Competitive Strategy. working paper. Georgia State University 2001

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