Company DescriptionExxon mobile also know as Xom in the New York Stock Exchange is on of the largest producers of fossil fuels. Exxon engages in oil and gas exploration, production, supply, transportation and marketing in a global economy (Bloomberg). They hold over 13 billion barrels of oil in reserve. Exxon also has thirty eight refineries spread over 21 countries (Annual Report). The company also has a thought put capacity of 6.3 million barrels of oil daily.
Target MarketExxon has a huge target market in today’s economy. They not only provide to anyone driving a commercial motor vehicle but also to larger wholesalers. These wholesalers consist of smaller independent gas and service stations that do not have their own refineries. Xom also provides six hundred airports and two hundred seaports with fuel (Annual Report). These two markets consume a tremendous amount of fuel each year. This is a niche market for Xom because these airports and seaports can not use alternative energy in their endeavors.
CompetitionAlthough Exxon is the largest fossil fuel producer they do have some competition with British Petroleum, Royal Dutch Shell and Chevron. These companies’s do not have the same output as Xom, but some might say they are ahead in many ways. British petroleum (BP) has been doing a lot with alternative energy for the future unlike Exxon which has mainly focused on gasoline. Shell has also made some large landmarks in alternative energy like the use of sugar cane for fuels (Bloomberg).
Competitive AdvantagesExxon Mobile conducts oil and gasoline exploration in every major accessible area in the world (Integrated Solutions). They also have the largest amount of financial capital for new research and exploration. Exxon is also the largest publically traded energy company in the world and serves over two hundred countries (Annual Report). They also have discipline and consistency which means that they continue to grow in the areas they feel necessary while holding back in others like alternative energy.
Current ChallengesOne of the biggest challenges that Exxon faces is the huge increase in energy by new developing nations. By 2030 there is an estimated forty percent increase in energy. This poses a problem because Xom must learn to boost efficiency, develop new supplies while still managing environmental risks. That is the next challenge that they face managing environmental risks like mitigating global co2 emissions. They have started to face this problem already by investing in CO2Remove project.
This project is set to develop ways to lower co2 emission and create new guidelines for the industry (Integrated Solutions). Exxon also faces challenges with alternative energy like wind power, ethanol and solar power. The last challenge is with nuclear power and its high cost particularly in the U.S. In the U.S the cost of nuclear energy highly exceeds the cost of coal and gas. There is also the problem of how to properly dispose of radioactive waste and safe control of nuclear material. Exxon also is having trouble opening new facilities because no one wants nuclear plants near them.
Part II Exxon Mobil is the world's largest publicly traded international oil and gas company, providing energy that helps underpin growing economies and improve living standards around the world. To be successful, ExxonMobil must be at the leading edge of competition in every aspect of our business.
This requires that the Corporation's substantial resources, including financial, operational, technological, and human, be employed wisely and evaluated regularly. The success of the company depends mainly on customer satisfaction. For this reason, it is good for a company like Exxon Mobil to have solid mission and vision statements to act as a guideline for the sales and services to be implemented by the company. The mission statement and vision statement are as follows: 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 adhering to the highest standards of business conduct. These unwavering expectations provide the foundation for our commitments to those with whom we interact (Annual Report). Vision Statement
-providing reliable, affordable energy supplies in a reasonable manner. -safely and reliably producing oil, natural gas, and hydrocarbon -finding and developing new supplies and products to bring to the market - maximizing resource and asset value
-improving energy efficiency and minimizing environmental impacts -developing the next generation of scientists and engineers Strengths: The size of the Corporation is the most obvious strength for Exxon Mobil. Exxon Mobil is affiliated with over 200 countries and territories (Annual Report). There are 6.1 billion shares and over 2.5 million shareholders. Another strength of the company is the diverse workforce that allows them to achieve superior results.
Exxon Mobil benefits from the cultural differences, knowledge, and skills of our employees who represent the diverse communities of the world. Weaknesses: There were three employee fatalities and five contractor fatalities since 2005. However, the company has learned from these incidents and is working hard at preventing such incidents in the future. Also, replacing the oil that is extracted from the locations is another weakness.
They also face the challenge of continuing their pace of significant energy efficiency improvements year after year. Opportunities: ExxonMobil has a list of significant Arctic opportunities, with ongoing studies spanning the range of exploration, project assessment and planning, and technology development. We recognize that energy is vital to economic progress. Exxon Mobil is drilling in some of these areas, which helps boost their economy. Other such opportunities include the Canadian Beaufort Sea, West Greenland, and the Orphan Basin.
Threats: Threats to Exxon Mobil include drilling restrictions, other independent companies, global warming. Managing the risks from increases in global greenhouse gas emissions is an important concern for ExxonMobil, industry and governments around the world.
Exxon Mobil is living up to its vision and mission. They are the premiere gas and oil supplier of the world and do so while staying energy efficient and have very high standards of the functions of business. The company reaches out to its customers and strives to be as helpful and satisfying as possible. They are reliable and for the most part affordable. They continue to develop next generation technology and scientific practices. The company grows stronger each year. Part III
Financial AnalysisThe financial analysis for Exxon Mobil Corporation seems to be in very strong financial position overall and when compared to the competition. The revenue for 2007 was reported at 404,552,000 with a net income of 40,610. When compared to BP, Shell, and Marathon it seems to dominate the market and the competition by a gross margin of 20.8%, which was at least 5% above the nearest competitor and closest to the industry average of 25%. Exxon Mobil’s current ratio was 1.4 and was highest of the competition.
The industry average is 1.2, the higher the ratio number, and the better the ability to repay current loans. The debt to equity ratio of .08 is considered extremely low and looked at as being very safe, and was the lowest of the competition. With such a strong performing company and profits come strong earnings, at $7.35 per share earnings was one of the highest of the industry. Company comparisonWhen Exxon Mobil is compared to the competition it seems to be out performing the rest of the industry and is proven with the financial statements and ratios. This is definitely a great long term company to invest in, when compared to the competition in this industry. Part IV
Strategy to Competitive Advantage- As global warming increases Exxon needs to go green. One strategy they need to have is a renewable energy producer, such as electricity from a carbon emitting utility. There are tons of opportunities to gain a competitive advantage by understanding the carbon constraints.
First, Exxon needs to minimize the additional costs more effectively than competitors. Second, differentiate their product by binding carbon credits into their offering. Then, Exxon needs to turn their capacity to supply carbon credits into a profit centre (Energy-Edge). Expand or Reduce Operations- Exxon is ramping up its oil exploration and drilling, and even worse, is looking to expand its leadership in exploiting Canada’s tar sands.
They need to stop expanding and start reducing its operations. An expansion is increasing production capacity by 40 percent. But, the mining and processing of tar sands is highly destructive to the local environment and is an enormous generator of greenhouse gas emissions (Coop America). New Products or Services- Exxon has launched a new service called the fleet card program. The program offers a number of valuable features including: greater control over driver's expenses, money-saving rebates on fuel purchases, special discounts on business-related products and services, innovative technology and the convenience of more than 16,000 Exxon and Mobil branded locations nationwide (All Business).
Environmental Factors that Influence the Operation- The main environment factor is the climate change on the business from greenhouse gases and carbon dioxide emissions. Exxon Mobile needs to view “carbon exposure” as more than just a key factor in future corporate competitiveness (Energy-edge). They need to use their profit money towards renewable energy research and development, to break individuals’ oil addiction and create a secure and green energy future for the US. (Coop America) Work at or Investing in Exxon- People should invest rather than work at Exxon Mobile.
One reason is that Exxon is ranked number two in the Fortune 500. The world’s energy need, will increase in the near future. Growth in developing countries will drive most of this increase, but energy demand is expected to increase in the United States, too. (ExxonMobil) Exxon spends about $80billion to invest in future energy development.