Running head: SWOT ANALYSIS ExxonMobil SWOT Analysis Robin A. Lee BUS 402 - Strategic Management & Business Policy Instructor: Earl Levith July 9, 2018 Company History From my previous assignment, I had chosen ExxonMobil Corporation (ExxonMobil) as the company to work with. It26is an American oil and gas multinational corporation that is headquartered in Irving, Texas. Thecompany was established and incorporated in 1870 1by John D. Rockefeller and partners operating as the Standard Oil Company of Ohio back then. In 1882, together with its affiliated companies, it was incorporated as the Standard Oil Trust with Standard Oil Company of New Jersey and Standard Oil Company of New York being its largest companies. In 1988, it was established in the United Kingdom. Between 1890 and 1891, the company established operations in Bremen, the Netherlands, Belgium, Italy and Rotterdam. Between 1982 and 1911, the company had expanded into Canadian and Asian markets, acquiring mergers in several companies such as Imperial Oil of Canada on the way (Grant, 2016).1Over the next few decades (1911-1950), Jersey Standard and Socony(ExxonMobil affiliates) grew tremendously, emerging as the largest oil company in the world by 1917 through the operations of Walter C. Teagle. The company got listed in the New York Stock Exchange in 1920 after acquiring a 50% stake in Humble Oil and Refining Co.1Jersey Standard made its first major oil discovery in Libya in 1959 with the1Mobil Chemical Company being established in 1960 and Exxon Chemical Company (first named Enjay Chemicals) in 1965.Between 1972 to this date, the company has diversified its operations in the energy sector including Valero Energy Corporation, XTO Energy, Coalbed Methane and Tosco Corporation. The company10is a major integrated energy company with mainly energy commodity interests and other interests in electrical power generating operations. Its mainbusiness however is the exploration, production, distribution of oil and natural gas. The major companycompetitors include,27Royal Dutch Shell, an integrated oil company whose headquarters are in the Netherlands and incorporated in London,22Chevron Corp., the second largest U.S. oil company, with a market capitalization of $151 billionand Valero Energy Corp., which is somewhat smaller in operations, it is another20U.S. energy company with a market cap of $29.3 billion and is headquarteredin San Antonio, Texas.SWOT Analysis for ExxonMobil As6a strategic planning tool SWOT Analysis can be used by the management of Exxon Mobil for the organization’s situational analysis. This can help in understanding6present Strengths (S), Weakness (W), Opportunities (O) a Threats (T) the company is facing in its current business environment. Being a leading firm in the industry, Exxon Mobil still maintains a dominant position in the market. Through its interactive nature, SWOT analysis process will need2effective coordination among various departments within the organization such as the marketing, finance, operations, management information systems and strategic planning (Kaplan, Norton, & Barrows, 2013). The following2step-by-step analysis guide represents ExxonMobil SWOT Analysis. Strengths of Exxon Mobil As a leading organization in industry, ExxonMobil has great strengths that can help it continue thriving in its operations. These strengths25help it protect the market share in existing markets as well as in penetrating new markets.The following are2some of the strengths of Exxon Mobil: ? A strong dealer community.ExxonMobil has built a culture among its distributor and dealers where the dealers promote the company’s products and also invest in training the sales team. ?2Automation of activities. This has brought consistency of quality toExxonMobil products thus enabling the company toadjust appropriately based on market conditions. ? Product innovation. The company has created over time a6successful track record of developing new products. A Strong Free Cash Flow that helps the companyto11provide resources in the hand of the company for expansion into new projects. ? The company has over the years built a strong and reliable distribution network which can reach majority of its potential market.? Strong Brand Portfolio. ExxonMobil has one of the strongest brand portfolios in the world that can be extremely useful especially for expansion3into new product categories. ? The company has established a strong base of reliable suppliers of raw material that has enabled the company to overcome any supply chain challenges. Weakness of ExxonMobil These are areas where Exxon Mobil needs to improve on using the SWOT analysis so as to28build on its competitive advantage and strategic positioning. ? The company has notinvested adequately12in Research and Development like other fastest growing competitors in the industry especially in innovation. It is only12a mature firm looking forward to bring out products based on tested features in the market.?7Need more investment in new technologies. ExxonMobil needs to invest more money in modern technology to integrate the processes across the board(Stone, 2011). Right now the investment in technologies has not reflected thecompany’s vision.?4Gaps in product ranges sold by the company. This lack of choice might give a new competitor a foothold in their market. The company’s financial planning is done improperly and inefficiently. The current asset ratio and liquid asset ratioshas suggested that the company can use its cash more efficiently than what it is being done at present. ? Its organizational structure is only compatible with present business model hence limiting its expansion in adjacent product segments. Opportunities forExxonMobil ? The18organization’s core competencies can be a success in similar other products field such as GE healthcare research that helped it to develop better Oil drilling machines. ? Thecompany should open up15new markets because of government agreement as the adoption of new technology standard and government free trade agreement can provide ExxonMobil an opportunity to enter new and emerging markets. ? Due to thelower inflation rate that has brought13more stability in the market, this has enabled credit at lower interest rate to the customers of ExxonMobil. ? A stable free cash flow that can provideopportunities to invest in adjacent product segments.?24New environmental policies that create a level playing field for all marketplayers in the industry(Kolk, & Levy, 2010). This represents5a great opportunity for ExxonMobil to drive home its advantage in the new technology and to gain market share in new product category. ? A decreasing cost of transportation due to lower shipping prices can bring down the cost of ExxonMobil’s products hence provide an opportunity for the company to either boost its profitability or pass on its benefits to customers to gain a market share. New trends in consumer behavior has opened up new market for the21Exxon Mobil and this provides a great opportunity for the organization to build a new revenue stream and to diversify intonewer products as well. ?8The new taxation policy, which can significantly impact the way in whichbusiness is done can open new opportunity for established players such asExxonMobil to increase their profitability Threats Exxon Mobil is Facing ? The newenvironmental regulations under the Paris agreement (2016) might be a threat to certain existing product categories(Kolk, & Levy, 2010). ? A29rising raw material can signify a threat to the ExxonMobil profitability. ? Achange in9consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model. ? An increasing trend towards isolationism in the American economy could lead to a similar reaction from other governments thus negatively impact international sales. ? Currency fluctuations especially7given the volatile international political climate in a number of markets across the world.?16Lawsuits in various markets given the numerous different laws and continuous fluctuations regarding product standards in different internationalmarkets. ? No regular supply of innovative products over the yearslike other players in the market (Stone, 2011). Also,3supply of new products is not regular hence can lead to high and low swings in the sales number over a period of time. Liability laws in different countries are different and ExxonMobil may be exposed to various liability claims given change in policies in those markets.23References Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.19Kaplan, R. S., Norton, D. P., & Barrows, E. A. (2013). Developing the strategy: Vision, value gaps, and analysis. Balanced ScorecardReview.17Kolk, A., & Levy, D. (2010). Winds of Change: Corporate Strategy, Climate change and Oil Multinationals. European Management Journal, 19(5), 501-509. Stone, J.B. (2011, March). ExxonMobil: “Applying New Technology to Lower LNG Cost”. In 430the Doha Conference on Natural Gas.141 SWOT ANALYSIS 2 SWOT ANALYSIS 3 SWOT ANALYSIS 4 SWOT ANALYSIS ? 5 SWOT ANALYSIS ? 6 SWOT ANALYSIS ? 7 SWOT ANALYSIS ? 8 SWOT ANALYSIS 9