Strategic Management Report: Analyzing ExxonMobil's Performance

This management report offers a comprehensive analysis of ExxonMobil, a leading multinational oil and gas company. The report begins with a company overview, followed by an examination of its organizational operations, including upstream, downstream, chemical manufacturing, and marketing strategies. A detailed financial overview and an assessment of the company's growth and market share are presented. The analysis section includes a KPI analysis to evaluate ExxonMobil's strategic position, application of the Ansoff Matrix and BCG Matrix to determine strategic direction, and an evaluation of the organizational strategy using the SAF framework. The report concludes with recommendations for enhancing ExxonMobil's sustainability and future strategic development. The report is a student contribution to Desklib, offering a valuable resource for students studying strategic management and business development.

Running head: MANAGEMENT
Strategic Management
Name of the Student:
Name of the University:
Author Note:

1MANAGEMENT
Executive Summary:
The objective of the report is to provide an overview of ExxonMobil which is one of the
most renowned oil and gas companies of the United States. The report commences
with a brief company overview. The report also puts forward a discussion on the
organizational strategy and provides an in depth analysis of the upstream, downstream,
chemical and the marketing operations. The report also undertakes a KPI analysis that
helps in determining the strategic position of the company. The strategic direction of firm
is analyzed with the help of the Ansoff Matrix and the BCG model that helps in
evaluating the strategic plan of the company. The report also provides a descriptive
analysis of the organizational strategy of the company through SAF framework based
on suitability, acceptability and feasibility. This is followed by recommendations on how
the ExxonMobil can enhance its sustainability factor.

2MANAGEMENT
Table of Contents
1.0 Introduction..................................................................................................................3
1.1 Company Overview:.................................................................................................3
1.2 Organizational Operations and Strategy..................................................................4
1.3 Financial Overview:..................................................................................................6
1.4 Company’s Growth and Market Share.....................................................................8
2.0 Analysis......................................................................................................................10
2.1 Strategic Position...................................................................................................10
KPI Analysis:................................................................................................................10
2.2 Organization Direction Using Ansoff Matrix...........................................................11
2.3 BCG Matrix.............................................................................................................14
2.4 Organizational Strategy..........................................................................................16
SAF Framework Evaluation..........................................................................................16
3.0 Conclusion.................................................................................................................16
4.0 Recommendation.......................................................................................................17
References:......................................................................................................................18

3MANAGEMENT
1.0 Introduction
1.1 Company Overview:
ExxonMobil refers to one of the largest companies across the world. It is a
multinational oil and gas firm based in America formed in the year 1999 through the
merging of the Exxon and the Mobil (corporate.exxonmobil.com 2019). The company is
considered as the largest refiners of the world with its headquarters in Texas, United
States. ExxonMobil has been also been parent company of Esso in UK. The company
however has a prolonged history of uncertain behavior that includes oil spill incident of
Exxon Valdez in 1989 in Alaska. This incident has also been a watershed moment for
the environmental critics of oil industry. There has been various incidents that led to the
criticism of the company. These incidents ranged from funding the sceptics of the
climate change to massive influence on the foreign policy of America. It also included
drilling in the terrains leased through dictatorship and involvement in the tar sands of
Canada.
Despite everything ExxonMobile remained one of the strongest leader in oil and
the gas market with a stronger hold in terms of the global land positioning along with the
dramatic earnings. The constant development of the breakthrough technologies
including the ones pioneered by the ExxonMobil aided the organization in keeping pace
with the rising demands of the global energy through availability of additional supplies of
energy. With the passage of time, technology became increasingly critical within the
industry as much of the oil and gas reserves remained located within the challenging
environments.

4MANAGEMENT
1.2 Organizational Operations and Strategy
ExxonMobil has been an industry leader in every facet of its business that is
related to chemical and energy manufacturing (corporate.exxonmobil.com 2019). The
firm operates facilities or marketed its products in most of the countries across the world
and carried out exploration on the six continents. Here the study will concentrate on the
upstream operations, downstream operations, chemical manufacturing and marketing of
power and natural gas.
As a part of the upstream operations, ExxonMobil’s global endowment of
hydrocarbon coupled with geoscience capabilities allows the company in identifying and
developing highest level of quality resource (corporate.exxonmobil.com 2019). The
applied technologies allows the company in developing increasing level of oil and gas
reserves both at the new and the mature fields. Besides, advancement in reservoir
simulation, seismic imaging, facility and drilling design allowed the company in not only
exploring but also developing deposits which had previously been unreachable and
unidentifiable. In addition to the company’s extended history towards technological
leadership, investments and the operational excellence positioned the company also
takes up extremely challenging projects that includes heavy oil, natural gas and deeper
water projects.
The downstream operations of the company includes distribution and
manufacture of products derived from feedstock and crude oil
(corporate.exxonmobil.com 2019). The company also provides lubricants, fuels and
higher value products for consumers. The company is the leading supplier of base
stocks for lubricant and is also the biggest marketer of the finished lubricants. Exxon

5MANAGEMENT
Mobile delivers application expertise and a higher level of product quality due to a
stronger network for distribution, immensely trained field force and an abundant supply.
The company is also able to create longer term value through selling of higher quality
products and services on a day to day basis to customers on a global scale. The
company markets the Synergy branded fuels and the other products to customers
across the globe through Esso, retail service platforms and international business
segments. These products includes wholesale fuel, lubricant and aviation lubricant and
fuel and marine lubricant and fuel.
ExxonMobil also has a chemical manufacturing division having unique
portfolio of specialty business and commodity that generated annual sales of close to
25million tones (corporate.exxonmobil.com 2019). The products of the company is
considered to be building blocks for wider variety of the day to day industrial and
consumer products. The company is known to process the feed stocks derived from the
upstream and the downstream operations for manufacturing chemical products for the
higher valued end users. The company also focuses on the product lines that
capitalizes on the advantages in the scale and technology, building strengths of
advantaged feed stocks, performance products and lower cost process.
For the marketing of power and natural gas, ExxonMobil employs a globalized
team of the commercial experts for maximizing value of company’s power interest, gas
and the natural gas liquids in meeting the rising needs of consumers across the world.
Thus, ExxonMobil strives in providing the required energy for meeting the global
demand through maintaining unrelenting focus on the safe operations. Besides, the

6MANAGEMENT
company also focus on the sustainable solutions based on the business practice.
Hence, the key elements of the business strategy includes (exxonmobilchemical.com
2019):
 Constant focus on the delivery of operational brilliance
 Depending on the technology leadership
 Take advantage of the benefits derived from assimilated business model of the
company
 Making investment with discipline and intelligence.
1.3 Financial Overview:
ExxonMobil had close to $21billion earnings in the year 2018. Cash flow from the
operating activities has been close to $36 billion which has been highest since the year
2014(corporate.exxonmobil.com 2019). In the year, the company had five additional
discoveries in the offshore of Guyana that enhanced the resource estimate to over 5
billion barrels. The company also had captured benefits from through the crude
differentials of North America with the help of integrated manufacturing and logistics.
The company also experienced a growth in the chemical sales which resulted in a
higher annual volume. Besides the merging of the company Exxon and Mobil positioned
it in delivering shareholders.

7MANAGEMENT
Figure 1: Financial Highlights
Source: (corporate.exxonmobil.com 2019)
Figure 2: Diagrammatic Representation of the Return on Average Capital
Source: (corporate.exxonmobil.com 2019)

8MANAGEMENT
Figure 3: Diagrammatic Representation of Net Income and Functional Earnings
Source: (corporate.exxonmobil.com 2019)
1.4 Company’s Growth and Market Share
ExxonMobil has been rolling its growth plans for substantially increasing the
earnings and the potential for cash flow while researching the technology breakthroughs
for reducing the emissions. As a part of its growth the company wants to do the
following (corporate.exxonmobil.com 2019):
 Plans for double earnings and generate cash flow potential by the year 2025
 Progression of key projects on schedule
 Focus on the adoption of the lower emission technologies including the carbon
capture and the biofuel.
The company also has an expectation of increasing the potential of annual earnings
by 140 percent and double the potential of the annual cash flow by the year 2025 from
the year 2017. The company also expects a progress on the key upstream projects that
will help in increasing the production to close to 5 million barrels of oil on a day to day

9MANAGEMENT
basis by the year 2025(corporate.exxonmobil.com 2019). The company acquired close
to 2.3 million acres in Brazil and looks forward for finalizing the developmental plans for
Carcara resource. For its Rovuma LNG project, ExxonMobil secured it’s off take
commitments in Mozambique while in Papua New Guinea, the company planned for an
expansion of liquefied natural gas. In downstream and chemical business, ExxonMobil
remained on track to over double its earnings potential with the investments that
capitalized on the proprietary technology.
In terms of market share, Exxon Mobile is one of the biggest companies across the
world. The year 2011 has been the most successful year in terms of the revenue. The
market valuation of the company at end of 2018 was close to 289 billion dollar
(statista.com, 2019). The upstream division included exploration and extraction and is
considered as one of the key divisions. With close to 14.1 billion dollars, the company
had been responsible for close to 68 percent of the net overall income. Besides, the
company is known for owning oil refineries across the world with refining capacity of
closer to 4.91 barrels on a day to day basis.

10MANAGEMENT
Figure 4: Diagrammatic Representation of the Market Share of Exxon Mobile
Source: (statista.com, 2019)
2.0 Analysis
2.1 Strategic Position
KPI Analysis:
Exxon mobile’s performance is accessed at different levels from the individual
sites of operation to business lines for supporting the continual movement in most of the
sustainable areas (corporate.exxonmobil.com 2019). As part of the commitment in
maintaining transparency in communication, the company reported data related to the
key performance indicator over 7 year period. This is indicated by the table mentioned
below:

11MANAGEMENT