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ExxonMobil
Exxon Mobil History
Congress's passage of the Sherman Anti-Trust Act of
1890, eventually led to the dissolution of the Trust in
1892
The Standard Oil Interest was formed and in 1899 the
Standard Oil of New Jersey became its holding company.
In May 1911, the United States Supreme Court declared
Standard Oil Company of New Jersey an "unreasonable"
monopoly and ordered it to dissolve, resulting in 34
distinct and separate companies.
The Standard Oil Company of New Jersey would
become Exxon
The Standard Oil Company of New York would
become Mobil
1999 Exxon and Mobil merged and become the
world's largest energy corporation
John D. Rockefeller and partners formed the Standard
Oil Company of Ohio in 1870
In 1882, Rockefeller and partners formed the
Standard Oil Trust to unify what then numbered
about 40 companies.
The Trust formed Standard Oil Company of New
Jersey New York.
By 1889, the Trust established itself as a vertically
integrated organization.

Strategic Analysis
ExxonMobil is the worlds largest publicly traded international oil and
gas company. They are the worlds largest refiner and marketer of
petroleum products, and their chemical company ranks among the
worlds largest. They operate in most of the world's countries and are
best known by their familiar brand names: Exxon, Esso and Mobil. They
make the products that drive modern transportation, power cities,
lubricate industry and provide petrochemical building blocks that lead
to thousands of consumer goods .ExxonMobil uses innovation and
technology to deliver energy and petrochemical products to meet the
worlds growing demand. Extensive research programs support
operations, enable continuous improvement in each of business lines,
and explore new and emerging energy sources and technologies.

Vision and Mission

Vision:
Exxon Mobil Corporation aspires to be at the leading edge of competition in
every aspect of business. That requires the Corporation's resources financial,
operational, technological, and human to be employed wisely and evaluated
regularly

Mission:
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 simultaneously
adhering to high ethical standards.

ExxonMobil Brands
Customers in the United States have come to respect and rely on Exxon-branded fuels,
services and lubricants for their personal and business needs.
Customers around the world have come to respect and rely on Esso-branded fuels,
services and lubricants for their personal and business needs.
Marketed around the world, Mobil is known for performance and innovation. Mobil is
recognized for its advanced technology in fuels, lubricants and services.

BCG Matrix

BCG Star
(Exploration and production (E&P) business)
It is the leading business segment and generates plenty of cash.
E&P also uses large amounts of cash. More specifically, conventional oil
E&P has been a star, though growth rate has been declining
compared to that of natural gas.

BCG Cash cow

(Chemical operation)
ExxonMobils Chemical operation has been generating a proportionally
high profit with relatively low investment, typical characteristics of a
cash cow.
Chemical business has been growing at a healthy pace

BCG Dog
(Refinery and manufacturing business)
The refinery and manufacturing business is fundamentally a narrow
margin business.
Factoring in the low growth rate makes this segment a dog.
The coal operation and the oil transportation businesses are not as
attractive as the rest of the businesses.

BCG Question Mark

(E&P)
E&P (e.g. shale oil and gas E&P) is capital intensive and time
consuming with technology risks abounding.
The gas E&P is not as profitable as the oil E&P due to lower natural gas
prices.
The innovations in E&P technology would make unconventional oil and
gas production more affordable in the next few decades, but for now it
is not cost effective.

 For these reasons, non-conventional E&P and gas E&P are classified as
question mark.

Acquisitions
ExxonMobil acquired XTO Energy for $24.6 billion in June 2010 for the
following strategic rationales:
Growing need for natural gas in the next several decades.
Most of the companys upstream assets are abroad, and the merger
represents a move toward the U.S. market.

Divestiture
The company has been managing downstream assets carefully, as the
refining industry is in a declining phase with low margins and
profitability is heavily dependent on the oil price.
In 2010, ExxonMobil sold its interest in a lube oil refinery in France and
restructured its retail activities to convert to a more efficient branded
wholesaler model as in the United States.

Joint venture & alliances

ExxonMobil often seeks foreign partners to:
Surmount tariff barriers and import quotas.
Gain local knowledge about customs and cultural factors and access to
distribution outlets.
Overcome governmental regulations and political pressures. For
example, BP was the only company in Iran for a considerable length of
time. However due to governmental intervention, BP was forced to
share their stake with other companies.
The Downstream business is highly competitive and risky with tight
margins. Any unused refining capacity would result in reduced margin.
To deal with this problem, many oil companies form alliances to
optimize the plant utilization, thereby improving margins.

SWOT Analysis
Strengths
Capturing the highestquality exploration
Opportunities
Strong research and
development
Capabilities
Diversified revenue
stream (Geographical
diversification)
Integrated refining &
chemical operations

Weakness
Declining net liquids
production and oil
Reserves
Litigation and
contingencies

Opportunity
Demand for shale gas
Rising global energy
demand
Strategic cooperation
with Rosneft

Threats
Risks concerning instability in
some
oil-producing regions
Environmental regulations
Economic conditions

Strengths
Capturing the highest-quality exploration Opportunities:
The company uses its geosciences capabilities and understanding of
the global hydrocarbon potential to identify, evaluate, and prioritize the
highest quality resource opportunities.
Strong research and development Capabilities:
Seismic and reservoir modeling technologies enable it to identify new
resource opportunities, drill more accurately, and improve recovery.
Advanced molecule management technology optimizes the value of every
hydrocarbon molecule, while minimizing energy use. Currently focusing on
the use of solvents to access undeveloped resources, improve bitumen
recovery, lower water use, and reduce greenhouse gas emissions.
Diversified revenue stream (Geographical diversification):
The companys revenue stream is diversified in terms of geographies.
Exxon Mobil divides its geographic divisions as US and non-US. The non-US
region covers Canada, the UK, Belgium, France, Italy, Germany, Singapore,
and Japan, among other countries. Its worldwide presence reduces exposure
to economic conditions or political stability in any one country or region.

Weakness:

Declining net liquids production and oil Reserves:

The upstream division of Exxon has been recording a consistent

decline in its production volumes. The production has declined at a CARC of
3%, from 2.6 million barrels per day in FY2007 to 2.2 million barrels per day
in FY2012
Litigation and contingencies:
The company is involved in various lawsuits, claims, and legal
proceedings arising out of the conduct of its business. Claims - Damages,

fines, or penalties in substantial amounts or remediation of environmental

contamination.

Opportunities:

The production of shale gas is expected to form a large component of

petroleum production.

Shale gas production (expected to grow by 113% from 2011 to 2040),

is the greatest contributor to natural gas production growth. Its share
of total production is expected to increase from 34% in 2011 to 50% in
2040.

ExxonMobil, during FY2012, completed 1,142.7 net exploration and

development wells in the inland lower 48 states.

Exxon Mobil is well positioned to leverage the increasing demand for

shale gas in the US and to exploit opportunities for further market
penetration in other countries.

Threats:
Political instability in the exploration and production areas of
interests including Africa, the Middle East, and South America. Companys
investments in the Egypt, Libya, and other countries could be adversely
affected by heightened political and economic environment risks. Political
unrest in Middle Eastern and North African countries is likely to have an
impact on Exxon Mobil's production capacity. This is because the company
derives the majority of its revenue from production of crude oil and natural
gas liquids, and the Middle East and North Africa regions account for a
sizable portion of its portfolio.

Porters 5 Forces Model

Bargaining power of Supplier (oil

mining and extraction firms)
(HIGH)
Threat
of 40% of worlds supply of oil and,
OPEC
controls
Degree of
thus,new
has a strong influence on the price of oil
Rivalry
Unstable
countries that
host Exxon oil reserves
entrants
(HIGH)
can(LOW)
seize Exxons assets
at any time
CommodityHigh capital
cost
Economies of
scale
Distribution
channels
Proprietary
technology
Environmenta
l regulation
Geopolitical
factors
High levels of
industry
expertise
needed to be
competitive in
the areas of
exploration
and extraction
Fixed cost
levels are high

based nature of
the business
Competition
with other
industries that
supply chemical,
energy, and fuel
for both
industrial and
individual
consumers
Ability to
produce products
at a lower cost
via operational
efficiencies
ExxonMobil, BP,
Chevron, Conoco
Philips, and
Royal Dutch
Shell

Threat of
substitutes
(LOW)
Photovoltaic
sources are
limited by
technological
issues and
geothermal
sources are
limited by
geographic
availability

Bargaining power of Buyer

(Industrial consumers and individual
consumers)
(LOW)
High volume of demand