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Exxonmobil Case Study Analysis

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Exxonmobil Case Study

Introduction

Incorporated as Exxonmobil Corporation, the company is involved in the oil and gas corporation it is an American multinational company which has its headquarters in Irving Texas and it is incorporated in New Jersey. It is the descendent of John D Rockeffeler’s Standard Oil and was officially formed in the year 1999 by the merger of Exxon which was the Standard Oil Company of New Jersey and Mobil the Standard Oil Company of New York. The main brands involved are Mobil, Esso and Exxon Mobil chemical. One very striking feature of the company is the fact that it is the largest company by revenue across the globe.  From the year 1996 to 2017 it has continuously been the sixth largest publicly traded company by market capitalization. For its success the organization was also ranked in Forbes 2000 list in the year 2016. Followed by this in 2017 in the Fortune 500 rankings it was ranked 10th as the most profitable country. In 2018 it was ranked in the Fortune 500 list as the second company to earn the largest revenue in the United States of America. 55.56% of the company’s total shares are currently held by the company. Reports in 2019 suggested that the largest shareholders of the organization are The Vanguard Group, BlackRock and State Street Corporation. We are also providing Honda Europe case study solution.

It is notably one of the most important and largest Big Oil companies, a 2007 year report reflected that the company produced 3.921 million barrels of oil equivalent. In 2008 this was 3% of the world production which was less than many state-owned petroleum companies. Currently the organization has more that 37 oil refineries across 21 countries with a daily refining capacity of 6.3 million barrels. It is the seventh largest oil refiner in the world which was also how Standard Oil was known. Exxonmobil case study help offered by Assignmenthelp.us.

However, there are reports that criticize ExxonMobil’s effort to in delaying the cleanup that occurred after an oil spill in Alaska. This spill was considered one of the deadliest spills in history and caused a lot of environmental damage. It is also accused of lobbying for climate change denials and also denies specific scientific advancements that proves the fact global warming is a result of burning fossil fuels. Apart from this the company had to face a lot of backlash because of flouting human rights issues and creating trouble for the American Foreign Policy which could have impacted future relations with other nations. We are also providing Enron case study solution.

Yet it continues to be one of the largest private company in this particular sector that is responsible for producing three percent of the world’s oil and two percent of the world’s energy. Along with there strong foothold in the industry they also own quite a few small subsidiaries like Imperial Oil Limited and the Sea River Maritime which is a petroleum shipping company. As of 2020 the company has earned approximately 178.57 million US dollars’ worth revenue and has about 72,000 employees. The core products they deal with are crude oil. Oil products, natural gas, petrochemicals and in the power generation sector. We are also providing History case study solution.

External Environment Analysis

PESTLE Analysis

The PESTLE analysis of the organization is aimed to look at the political, economic, social, technological, legal and environmental factors that influences the business of the company and helps in determining how it should make the future strategies.

Political factors

The political factors are very important to consider as it directly influences the business strategy and the profitability of the company, especially that too in the oil and gas industry. It operates in a various country which has different government with their own business and trade ideologies. Some countries have trade restrictions while others might have a strong presence of government owned companies which has a high demand. Hence, ExxonMobil should look into investment friendly countries and governments who allow trade relaxations.

Economic factors

Because ExxonMobil is a global company it has to comply with the shifting economic structure of the places where it operates from. With regards to this the company considers economic factors like inflation, recession, price rise, supply and demand concerns as well. It is important to note that the demand of a particular product is situational and differs from time to time. But because the products manufactured and sold by ExxonMobil falls under essential commodities the demand remains the same across all the countries the company operates from cutting through various economic phenomenon.

Social factors

The social factors are incumbent on the particular place, the demography, the age, sex of the consumers, their preferences, consumption pattern as well as the economic stability. Certain countries with rich consumer base use the products of ExxonMobil according to the capacity of how much they spend. Interestingly people are being more and more conscious with energy consumption which also has an impact on the business of the company.

Technological factors

The importance of technology in the oil and gas industry is unparalleled, so it is same for ExxonMobil. It has seriously embarked on technological advancements and has invested in extensive research and development in order to carry out necessary explorations since crude oil natural resources are depleting. Another way it uses technology is to devise new alternatives that would address the energy demands of the future.

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Legal factors

Here too because the company functions out of different countries, it has to face different kinds of legality and regulations. Some countries have stricter regulations regarding trade laws, labor laws environment laws, copyrights and patents as well as waste management. Some countries have taken these laws very seriously in order to impose restrictions on ExxonMobil owing to the conditions of climate change some countries are forced to impose strict regulations so that the concerns of environmental degradation that is linked with the oil and gas industry are kept under a check.

Environmental factors

Finally, one of the most important factors that the company is subjected to are the concerns of the environment. ExxonMobil because it is associated with the oil and gas industry has been involved in the emission of the greenhouse gases and remains carbon intensive as well. Because of this there is a pressure on the company to venture in to the renewable energy sector. Countries who are seriously taking steps in achieving cleaner energy consumption can have some effect on the business of the organization.

Thus, the PESTLE analysis has been very crucial in understanding the situations favorable for the business of ExxonMobil to grow. With regards to this the political, technological and the economic factors are f great help, whereas the company needs to strategize efficiently in order to address the concerns of the environmental, social and legal factors.

Internal Environment Analysis

SWOT Analysis

Internal environment analysis is the study of the company’s internal conditions and how that will affect the company’s future strategy and planning. The aim is to figure out the strength and weakness as well as the opportunities and the threats if the organization.

 

STRENGTH

OPPORTUNITY

- One of the biggest strengths of the company is its brand value because it has been in business for a very long time and has catered to all kinds of consumer demands

- It has also developed a strong market position for itself because it is the largest oil refiner in the world with a worldwide presence

- It takes all the possible opportunity to expand its business and has expanded into several crude refining sector producing a variety of products

- It has been investing in research and development as well as involved itself in several projects

- Finally the revenue it generates is exponential for the company to sustain and invest further

One of the greatest advantages of the oil industry is the fact that it never goes out of demand. The demand of crude oil is rise and will continue to do so in the future, which leaves the organization with a potential for growth

- Exxon has understood that the consumption pattern of people is changing and are becoming more conscious. Even the prospects of renewable energy look promising and this is where the organization is trying to expand

- Along with this there is a potential high in the LNG demand and Exxon has already invested and has started researching about the same.

WEAKNESS

THREATS

- The major weakness of the company is its negative image in front of world that raises ethical concerns about the company especially after the oil spillage issue, additionally it also is fighting serious lawsuits filed by many countries

- Its finances have declined considerably than before

- The debt of Exxon has increased over the last couple of years

- The company has to survive in an extremely competitive market because of which its revenues are dropped.

- Owing to climate change and global warming the environmental regulations have become more stringent which has led the company to take different kinds of changes

- The changing world economy has caused changes in the oil industry and has also affected the pricing.

- The supply of crude oil is also hampered by many factors.

 

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Conclusion

Therefore, to conclude, the SWOT analysis is a mixed bag while the demand and the strategy of the company remains to be the strengths. There are some weaknesses that involves the financial loss and the lawsuits that the company is involved in. Furthermore, the opportunities include the investments and new ventures of the company and the threats are based on the current competitions and the loss of revenue and profits, secondly increasing environmental regulation and the changing structure of the economy will also affect the company.

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