Exxon Mobile's Strategy Analysis - Research Paper Example

Exxon Mobil’s Strategy Analysis Exxon Mobil’s Strategy Analysis Key Competitive Strategies Strategically, the Corporation operates in many segments in an attempt to improve its revenue or returns on its investments as well as profitability in the current competitive business environment. DePamphilis (2013) explains that the company operates through; downstream, upstream and chemicals segments. Ideally, each of the individual parts specializes in particular operation towards providing consumers with the products they need. The upstream segment focuses on the exploration and production of natural gas while the downstream focuses on refining and supplying fuels to the market. On the other hand, the chemicals segment handles manufacturing and sales of petrochemicals. The success and outstanding performance of Exxon Mobil Corporation emerge from several strategies implemented by its management executives. Just to name a few, the Corporation has a strategic management system that provides an elaborate framework for maintaining high standards and performance. This particular analysis paper looks deep into the strategies that Exxon Mobil implements to support its success. Exxon Mobil Corporation is guided by a corporate strategy that guides operation and enhances efficiency in its system. The organization strategy is reliant on the ability to innovate and develop in the new emerging markets by providing new products that suit the changing consumer needs. Ideally, it concentrates on their strong market positioning strategy to exhaust their market segments and fill the niches that can be identified by their competitors. The success arising out of this strategy is dependent on the broad portfolio. Exxon Mobile Corporation has a stronger business portfolio that emphasizes on the long-term profitability of the organization regardless of the volatile nature of the product prices in the industry. Additionally, the corporation relies on diversity strategy in production and sale of its products. Its global diversity principle act as a foundation for the long-term career oriented model to employment. Ideally, skills and expertise of the employees is quite critical to any organization. Competent employees usually work harder to boost the productivity of the organization. Exxon’s approach to employment is not only a relevant model but also a productive model to the general performance of the organization. The method fulfills the desired dreams of the organization through attracting, developing and retaining premier workforce diversity. It arguably fosters a productive work environment and culture where every employee feels part and parcel of the organization’s success. In fact, the leadership strategy at the organization aims towards engaging every employee in decision making to excel in the global intensely competitive environment. Subsequently, the Corporation implements differentiation strategy to ensure it remains competitive in this most dynamic industry. Even though, the level of differentiation of products mighty prove difficult in this industry, Exxon tries to innovate new ways of improving on its products to achieve consumer acceptability and satisfaction (Hemmington & Bournemouth University, 2014). The company adopts a productive product life cycle that is consistent with the changes in the marketplace as well as new regulations. It makes the organization acquire more consumers and retain its regular customer. On the other hand, the corporation implements a sustainability strategy that ensures its remains competitive as well as productive in its businesses. Ferrara, LaMeau and Gale (2012) noted that within its lines of production the company tries as much as possible to manufacture environmentally friendly products. Ideally, environmental protection is quite crucial in this industry. As such, it must be taken as a matter of critical success factor. Exxon can accommodate the necessary environmental issues and requirements needed to operate in this industry. In the first place, the organization complies with environmental policies and regulations (Aljaz, 2014). Also, it continuously seeks for new resource deposits that can be used to produce environmentally friendly gasses and oil to the consumers. Again the organization adopts ethical business practices that comply with policies thereby ensuring its success. The companys employees operate under Ethical Standards and codes that adhere to the governmental laws, regulations and rules. Frosch (2013) explains that the local traditions, customs, and culture are the key aspects that a firm must ensure all the times within the organization. For instance, honesty is the key principle guiding transactions between employees, suppliers, customers as well as third parties. Nonetheless, the Corporation implements Corporate Social Responsibility (CSR) as one of the approaches to remain competitive in the marketplace. Just as any other sustainability strategy, Exxon remains committed to social responsibility through raising funds for projects and engagement in societal activities (Simpson & Taylor, 2013). The initiative is not only beneficial to the entire organization but its stakeholders. Ideally, with CSR in place the employee’s efforts are boosted, and productivity of the organization improved. It also expands the market for its products through a broader existence of a market for its products. Finally, the corporation adopts economies of a scale to remain competitive in the oil industry. Exxon manufactures its products in large scale and distributes them to the broader market. Arguably, the large scale strategy helps Exxon in achieving the cost advantage in improving its profit margin. Ideally, the increased production due to low input costs significantly contributes to the performance and success of Exxon (Uyan-Atay,  2013). Competitors Analysis Even though, Exxon is the leading oil and gas producer both in the Americans markets as well as the global markets; it faces stiff competition both internally and externally. The industry experiences a significant competitive rivalry among the largest producers as well as the small ones. Among the chief competitors includes; PetroChina Co., Chevron Corporation, the Royal Dutch Shell and BP amongst others (ExxonMobil, 2015). These corporations compete Exxon both in the home market as well as at the international markets. They compete for the market share through various strategies including lowering prices as well as mass production to expand their market coverage. On the other hand, Exxon Mobil faces the threat of new entrants into this industry. Several companies can come into existence in this industry through the provision of substitutes. This external competition may affect the performance of Exxon Mobil adversely. For example, a company may make entry by providing substitute products including biodiesel, solar, wind energy and ethanol. These companies may compete the organization in terms of pricing and quality of the alternatives that they provide. How Exxon Mobil deals with Competition Despite the existence of a hyper competition, Exxon competes fairly and retains the largest market share in the oil and related products industry. First, the organization pursues continuous market development and distinctive strategy (Hemmington & Bournemouth University, 2014). The approach makes the company match the current demands of consumers as well as the needs of the changing market. Ideally, through evolvement of their tactics they take advantage of the emerging markets thereby keeping it off from the competitors. According to Grant (2013), the organization utilizes their operations to gain economies of scale in an attempt to keep their market share. Arguably, the Corporations business portfolio keeps the company competitive and profitable. In fact, they have a Research and Development department engaged in surveying the emerging markets that they fill before the competitors can identify such niches (Frosch, 2013). Therfore, Exxon Mobil squarlely deals with competitors through embracing consistency in making changes in relation to the moves of the competitor. As opposed to the other companies in the same trade that are rather reactive, Exxon Mobil strives to be proactive and excellent in all the services that it delivers. It consistently differentiates itself from the masses and this make it stands out. According to DePamphilis (2013), majoring in the production of a few products in an excellent manner is key to overcoming competition. Ideally, that is what Exxon Mobil deos with the hope of gaining more valuable proceeds and remaining on top of the industry. References Aljaz, V. (2014). Strategy and Innovation. Strategic importance and the role CSR plays in large oil and gas Multinationals”. Maastricht, Faculty of Economics and Business Administration. DePamphilis, D. M. (2013). Mergers, acquisitions, and other restructuring activities: An integrated approach to process, tools, cases, and solutions. Exxon Mobil (2012). Corporate Citizenship Report. http://www.exxonmobil.com /Corporate/Files/news_pub_ccr2012.pdf Exxon Mobil Corporation. (2014). Mobil travels guide. Park Ridge, IL: ExxonMobil Travel Publications. ExxonMobil Corporation Company Profile. http://donnelly.nmhu.edu:2138/bsi/pdfviewer/pdfviewer?sid=982ec152-e47a-4401-b390-45823a9356d5%40sessionmgr115&vid=7&hid=118 ExxonMobil, (2015). Learn more about ExxonMobil. Retrieved 24 June 2015, from http://corporate.exxonmobil.com/en/ Ferrara, M. H., LaMeau, M. P., & Gale (Firm). (2012). Corporate disasters: What went wrong and why. Detroit: Gale, Cengage Learning. Frosch, D. (2013). Arkansas: Exxon Is Sued Over March Pipeline Spill. New York Times. http://www.nytimes.com/2013/06/14/us/arkansas-exxon-is-sued-over-march-pipeline-spill.html?ref=exxonmobilcorporation. Grant, R. M. (2013). Contemporary strategy analysis. Malden, MA: Blackwell Pub. Hemmington, N., & Bournemouth University. (2014). Development of a differentiation strategy: A knowledge transfer case study. Bournemouth: Bournemouth University. Simpson, J., & Taylor, J. R. (2013). Corporate governance, ethics, and CSR. London: Kogan Page. Uyan-Atay, B. (2013). Corporate community involvement: A visible face of CSR in practice. Read More