Exxon Mobil Analysis: The Company’s Environment

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Table of Contents

Introduction
Background
External Stakeholders
Internal Stakeholders
SWOT Analysis
Conclusion
References

Introduction

The given report is devoted to the in-depth investigation of Exxon Mobil, an American multinational oil and gas corporation that is now considered one of the most influential and powerful global companies. The choice of the object for the investigation if preconditioned by several factors. First, the given sector possesses the strategical importance of the modern world as oil and gas remain the leading sources of energy. It means that there are multiple forces affecting the given segment and influencing the work of the company. Second, Exxon Mobil remains the world’s largest corporation by revenue, which evidences the effectiveness of strategies employed by its managers and the ability to correctly realize and use the current market trends to create the basis for further growth.

The report includes the evaluation of the whole industry and external stakeholders, such as competitors, vendors, customers, governmental entities. It helps to create an image of the environment where the company functions and its growth strategies. Additionally, internal stakeholders are assessed to conduct an in-depth analysis of Exxon Mobil. This category includes shareholders, the board of directors, management, and employees.

Finally, the paper offers a comprehensive SWOT analysis with a detailed description of all findings to understand the current position of the organization and its future opportunities for growth. All these elements are discussed in appropriate sections and incorporated within a single report to offer a complete analysis of Exxon Mobil, factors that impact its functioning and growth.

Background

The company has a long history and various stages of her development. It was founded in New Jersey in 1882 as a descendant of Standard Oil created by John Rockefeller (“Exxon Mobil Corporation,” 2018). The company succeeded and managed to establish the basis for its further growth. During the next several decades, it managed to transform into the largest company in the world with stable income and opportunities for further becoming a leader in the given sphere.

The decision to enter global markets was followed by the creation of multiple subsidiaries in various areas and purchases of other companies functioning in the given field to empower its position and support its evolution (“Exxon Mobil Corporation,” 2018).

Due to the sufficient strategies and correct managerial decisions, Exxon Mobil corporation became an influential actor in the oil and gas sector with the ability to compete with other powerful actors and generate stable income. It has facilities in Asia, Europe, Africa, Australia, and America and engages in new projects with the primary goal to avoid stagnation and participate in new projects (“Exxon Mobil Corporation,” 2018). In such a way, in the 21st century, Exxon Mobil is the influential actor that competes with other giants working in the same sphere.

External Stakeholders

Industry

Prior to analyzing Exxon Mobil, it is essential to create the theoretical framework for the discussion by exploring the oil and gas industry in general. At the moment, it is a strategically important sector characterized by the existence of giant corporations that control the most significant part of the market and precondition its further evolution (Alfarhan, 2019). Petroleum, as the main industry’s product, is vital for the modern industrial civilization and preservation of the current speed of its evolution (Colombano, 2015).

For this reason, the industry remains critical for many nations and attracts significant attention of governments, international unions, and regulatory bodies. Because of the highly competitive environment and high revenue (in 2018, the U.S. sector came to about $180 billion), there are multiple challenges companies face (Aarstad, Pettersen, & Jakobsen, 2015). Additionally, there are significant environmental impacts that are associated with this very sphere, which means that all actors should also engage in this sort of activity to remain attractive for potential partners and avoid claims regarding this very aspect of their work.

Competitors

As it has been stated previously, the existence of multiple opportunities to generate revenue and evolve, the industry is one of the most competitive ones if to compare with other segments. For this reason, Exxon Mobil has several powerful competitors that also work in the oil industry. One of the central rivals is the Shell corporation that is also considered an international company operating in the oil industry and trying to create a competitive advantage (“Exxon Mobil Corporation,” 2018).

Shell possesses the desired amount of resources to succeed and should be taken as one of the most influential actors at the moment. Chevron is another multinational energy and technology company functioning in the same area and struggling for revenues. Other potent actors that should be mentioned are Valero Energy and British Petroleum (“Exxon Mobil Corporation,” 2018). The existence of a high number of influential competitors evidences the need for effective strategies and constant improvement to remain competitive and be able to generate benefits. Exxon Mobil preserves leading places due to its traditionally practical cooperation with multiple partners and the creation of new facilities and departments.

Customers

Exxon Mobil acts as a supplier of its products to multiple companies working in different spheres. For this reason, analyzing its customers, it is appropriate to outline the industries that have a high demand for substances created by the company. Thus, customers in chemical, transport and logistics, and oil and gas industries should be taken as the most notable clients that generate the bigger part of income (“Exxon Mobil’s customers performance,” n.d.).

The company is focused on the gradual improvement in relations with the major agents and companies that demand its products. For this reason, there is a forecast presupposing the further growth in the demand for oil and associated products. At the same time, there is a tendency for the appearance of clients in other industries such as software and programming industry, medical equipment and supplies sector, etc. which means that Exxon Mobil has a wide pool of customers that can be used to create the basis for its further growth and empowerment of its positions.

Vendors

At the same time, as any giant international company, Exxon Mobil remains highly dependent on vendors providing materials and equipment needed for the company’s stable development and growth. The organization emphasizes the fact that improved work with suppliers is one of its main priorities as this type of collaboration, preconditions outcomes, and the ability to evolve. The companies working in the iron, metal, and chemical industries can be described as the leading vendors of Exxon Mobil. In accordance with the company’s report, in 2018, the company paid to about 100,000 suppliers of goods and services globally (“Supplier collaboration,” 2019).

The complexity of its supply chain presupposes the need for stable and continuously improving cooperation and involvement of new actors to avoid flaws or critical deterioration in outcomes. For this reason, new vendors are engaged in collaboration regularly. For instance, Trumbull Unmanned LLC, a specific business in Texas, serves as a supplier of aircraft systems and drones (“Supplier collaboration,” 2019). The diversity of suppliers evidences the complexity of the company’s strategy and its supply chain management.

Governmental Entities

Because of the strategic importance of the oil and gas industry, along with the global character of the company, cooperation with governments becomes a fundamental part of the work of Exxon Mobil. For this reason, it acknowledges the importance of disclosing relevant payments to governments to avoid corruption, unfair rivalry, and promote better economic stability in regions affected by the work of the corporation (“Engaging with governments,” n.d.). It also functions in the existing legal field to avoid violation of host government laws or contractual obligations ((“Engaging with governments,” n.d.).

The cooperation with the local authorities presupposes discussion of terms and benefits that can be acquired by both parties. Exxon Mobil also complies with existing international trade conventions and treaties that introduce specific limits of conditions under which companies belonging to the oil industry should function (“Engaging with governments,” n.d.). In such a way, governmental entities in different regions remain an important factor that impacts the work of the organization and serves as one of the forces that can either limit or promote its further evolution.

Communities

Exxon Mobil’s report also outlines the increased importance of communities and emphasizes the attention devoted to this factor. Because of the nature of the company, its environmental and social impact remains significant. There are several ways how the corporation cooperates with local people. First, it introduces a substantial number of new jobs in regions selected for the creation of new facilities (Exxon Mobil, 2018).

It contributes to the improvement in the quality of people’s lives and an increased level of income. Second, Exxon Mobil outlines that identification, avoidance, and mitigation of all negative impacts along with the enhancement of benefits is critical for the successful exploration, development, and production operations and the creation of positive relations (Exxon Mobil, 2018). For this reason, it tries to remain sustainable and evaluate the needs of the local population in an attempt to build productive cooperation.

The activities of Exxon Mobil include the struggle against poverty in emerging countries, the prevention of environmental harm, and the creation of better living conditions for communities affected by its work (Exxon Mobil, 2018). For this reason, there is mainly a positive attitude to the corporation and new attempts to establish positive cooperation.

In such a way, the outlined external factors evidence the existence of the environment that can promote the further growth of the organization. At the same time, the highly competitive environment and the complexity of the supply chain, along with the need for new vendors, might be challenging for a company and impact its development strategy.

Internal Stakeholders

Another step of the company’s analysis is the investigation of internal stakeholders, which might include shareholders, the board of directors, management, employees, and actors responsible for decision and policy-making.

Shareholders

As many multinational companies, Exxon mobile has multiple shareholders investing in its development, and, at the same time, acquiring some benefits. In 2019, the Vanguard Group (8.15%), Black Rock (6.61%), and State Street Corporation (4.83%) can be considered the largest shareholders of Exxon Mobil (“Exxon Mobil Corp,” n.d.). At the same time, there are individuals who possess the company’s stock and are current or former executives of the firm. They also have significant authority and are involved in the decision-making process. These are Michael Dolan, Andrew Swiger, and Mark Albers (“Exxon Mobil Corp,” n.d.).

There are also many other shareholders who possess Exxon Mobil’s stock; however, their impact is not as significant if to compare with the outlined companies and individuals. It also means that the company remains attractive for potential investors and can benefit from their decision to acquire shares and use them as a tool for the cooperation of generation of revenue.

Board of Directors

At the moment, all critical decisions impacting the further evolution of the company and strategic decisions are coordinated and approved by the board of directors. The chairman of this body and CEO of Exxon Mobil is Darren Woods. There are also other members representing the board: Susan Avery, Angela Braly, Ursula Burns, Kenneth Frazier, Steven Kandarian, Douglas Oberhelman, Samuel Palmisano, Steven Reinemund, William Weldon, and Darren Woods (“ExxonMobil Board of Directors,” 2019).

The board has a high level of authority and powers that affect the work of the whole company. The functions include filling vacancies of the board, execute documents on behalf of the corporation, establish the long and short term strategy, engage in cooperation with other companies, implement major organizational changes (“ExxonMobil Board of Directors,” 2019). As one can see, the Board of Directors possesses the high authority and severs as the unit responsible for the successful development of the whole company as their decisions are the highest instance and should be observed by all workers.

Management

The company’s management also depends on the solutions of the Board of Directors as they determine the strategy and action plan. At the same time, there are not only CEOs and members of that body who are responsible for the evolution of the company. At the moment, there are many managers holding various positions and working to coordinate the work of multiple assents and facilities in different regions (Exxon Mobil, 2018).

The distribution of tasks and authority among this sort of specialists guarantees the effective work of the organization. There are also HR and, Public relations departments and other fundamental divisions that should be present in such big corporations to coordinate relations between multiple units and avoid misunderstandings or flaws in the work of the corporation (Exxon Mobil, 2018). The given approach helps to prevent the abuse of power of acceptance of doubtful decisions that might result in the company’s collapse.

Employees

Being the giant multination corporation, Exxon Mobil gives jobs to a high number of employees globally. The recent report shows that in 2018 about 71,000 people were employed by the corporation (Garside, 2019). It introduces a high level of responsibility and the need for the creation of an appropriate working environment. The company guarantees social packages to specialists working there and tries to meet their requirements for the organizational climate and environment (Exxon Mobil, 2018).

Correctly realizing the importance of human resources, Exxon Mobil devotes much attention to this aspect of its functioning by guaranteeing high salaries and opportunities for personal and career growth. The average payment ranges from $15.648 per year for a common worker to $164.985 for a senior manager (Exxon Mobil, 2018). It preconditions the high attraction of existing vacancies and the emergence of a pool of workers who can be hired to contribute to the further evolution of the corporation.

SWOT Analysis

The SWOT analysis is a potent tool for the study of the work of any company to reveal problematic areas and advantages that can be employed to create the basis for future growth. For Exxon Mobil the following SWOT can be offered:

Strengths

The company has been a leader in the industry for about 100 years and is taken as a credible, reliable, and trusted brand.
The corporation constantly enters new segments of the energy industry, diversifies its activities.
Exxon Mobil has a strong presence around the world and benefits from working if fast emerging areas such as the Middle East, China (“Exxon Mobil Corporation,” 2018).
The company helps to grow various economies, develop infrastructures, and meet energy needs.
The brand possesses multiple resources that can be used to finance new projects, enter new markets, and create the basis for its further development and growth.

Weaknesses

The company is blamed for not sufficient actions regarding the environmental protection, pollution, and overuse of natural resources in areas where it works (Supran & Oreskes, 2017)
The corporation critically depends on prices for oil and products associated with it. Serious oscillations in these showings might cause severe harm to revenues.
The alternative segment is not enough to decrease the brand’s dependence on oil. For this reason, it might limit future opportunities for its evolution.
Some customer and client groups consider it a giant corporation trying to generate benefit at any price.

Opportunities

The company can benefit from meeting demands for energy in developing economies in the Middle East, China, Asia (“Exxon Mobil Corporation,” 2018).
The brand can become a leader in the sphere of alternative energy markets if sufficient resources are devoted.
The company can improve its image by engaging in more environmental projects
Exxon Mobil can cooperate with new emerging brands to spread its influence.

Threats

The highly competitive environment might pose a serious threat to the further evolution of the corporation.
The appearance of the alternative sources of energy and their growing population might introduce the need for a radical reconsideration of the company’s strategy (Colombano, 2015).
Economic recessions in the most valuable markets can be a serious challenge for Exxon Mobil.
Environmental claims might also be a significant limiting factor that will deteriorate the image of the company.

In such a way, in accordance with the given SWOT analysis, the company has multiple strengths that are associated with the availability of significant resources and the prolonged history of the brand. However, some problems should be considered to improve outcomes and ensure its ability to continue its further evolution. Thus, because of the existence of multiple claims regarding the environment, it can be recommended to devote more attention to the creation of projects presupposing the reduction of pollution and minimization of harm done to the environment. It will help to improve the image of the company and its reputation. Moreover, Exxon Mobil can also focus on the development of alternative sources of energy as they become more popular today, and it will help to decrease its dependence on oil.

Conclusion

Altogether, the analysis shows that Exxon Mobil remains one of the leading companies in the oil industry. Its experience and long history contribute to the creation of a particular image that attracts potential partners and customers. The current internal and external conditions and stakeholders evidence that there are beneficial conditions for the future evolution of the brand and preservation of its leading positions. The SWOT analysis shows that there are still some problems that can be solved by devoting more attention to environmental activities and developing alternative sources of energy that are popular nowadays.

References

Aarstad, J., Pettersen, I., & Jakobsen, S. (2015). Assessing drivers of export orientation in the subsea oil and gas industry. Springer Open, 4. Web.

Alfarhan, M. (2019). 2020 Market Analysis of Asia Pacific conference on oil and gas. Journal of Oil and Gas Research, 5(3). Web.

Colombano, A. (2015). Oil & gas company analysis: Upstream, midstream and downstream. New York, NY: CreateSpace Independed Publishing Platform.

Engaging with governments. (n.d.). Web.

Exxon Mobil. (2018). 2018 summary annual report. Web.

ExxonMobil Board of Directors. (2019). Web.

Exxon Mobil Corp. (n.d.). Web.

Exxon Mobil Corporation. (2018). Form 10-K 2018. Web.

Exxon Mobil’s customers performance. (n.d.). Web.

Garside, M. (2019). Number of employees at ExxonMobil from 2001 to 2018. Web.

Patt, J. (2013). Exxon: Transforming energy, 1973–2005. Austin, TX: Dolph Briscoe Center for American History, University of Texas at Austin

Supplier collaboration. (2019). Web.

Supran, G., & Oreskes, N. (2017). Assessing ExxonMobil’s climate change communications (1977–2014). Environmental Research Letters, 12(8). Web.

Vatavu, S., Lobont, O., Para, I., & Pelin, A. (2018). Addressing oil price changes through business profitability in oil and gas industry in the United Kingdom. PLoS One, 13(6). Web.

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