FINAL PROJECT

Exxon Mobil ranks number three on the Fortune 500 list. Exxon Mobil company is an American multinational oil and gas organization that is headquartered in Irving, Texas. The corporation was established on November 30, 1999, and it came about as a result of the merger between Exxon that was initially, Standard Oil Company of New Jersey, and Mobil which was initially the Standard Oil of New York (Exxon Mobil Corporation Home Page, 2020). This company supply to several brands for their customers which include Mobil, ExxonMobil chemicals, Esso, and Exxon. The company has been one of the world's most successful corporations and it is considered the world's largest company in terms of the amount of revenue that the organization generates. Since the year 1996 to 2017, the company has been positioned between the 1st and 6th ranking when it comes to publicly traded companies in terms of market capitalization. Additionally, still, on the performance of the company, the company was ranked 9th in the Forbes Global 2000 list in 2016 and also in the Fortune 500 list of 2017, the company was ranked as 2nd largest corporation by the amount of revenue generated (Revenue of ExxonMobil 2019 | Statista, 2020). Most of the shares in this organization are held by institutions.

Country of choice

China is a country that has the most lucrative market that the organization can make entry into. The country is home to one of the largest populations in the world and this population has been increasing steadily over the years meaning that the country's demand for energy is also rising (Population, total - China | Data, 2020). Since the company deals in the supply of gas and oil, it is most likely to enjoy and increase in the amount of revenue that it generates due to the large customer base. Although a lot of countries are going green and embracing activities and energy sources that are friendly to the environment, the company still has an opportunity to tap into this large market because it will take time for the entire country to stop using gas and oil as their main source of energy for both domestic and commercial operations. By making an entry into this new market, the country will enjoy some benefits, for example, the company will have access to a wider market meaning that by growing its market size, it will eventually increase its revenue and performance all over the world.

Mode of Entry

The most effective and efficient entry mode that the company can implement is the franchising mode and the main reason behind this selection is that the company will not face a lot of challenges when making entry into the new market. While there are some disadvantages that the company may suffer by using this technique there are various core benefits that make this mode stand out from the rest. By franchising, the company will use a local company meaning that it will face little resistance from the market and also from its competitors (Five Modes of Entry Into Foreign Markets, 2020). Additionally, through franchising, ExxonMobil will be able to lower its financial risks since the risks and uncertainties that come with the entry endeavor will be shared with the franchisee.

Expansion for any company is a fundamental activity that, if implemented appropriately, would result in more revenues as well as a better reputation of an organization both in its home country as well as the overseas company. Exxon Mobil, thus expansion to China is cutting edge milestone that will aid the company in expanding its bounders and market sales and consequently push the vision of the company to a higher and better position.

Cultural differences

Being an American based Multinational oil and gas organization there will be some form of difficulty, especially considering that China and American have very distinct differences in respect to their cultures. The method of conducting business is also different in China as compared to America. Being the largest country globally in terms of population and its rapidly growing market, the republic of China is a wealth of prospects for savvy business owners, especially those seeking expansion such as Exxon Mobil. The country has elaborated and strict control by the government, which may seem difficult for organizations. However, the country is best for any expansion organization.

Additionally, the focus has been shifted to consumption and innovation by the Chinese government as a way of moving from investment-based growth. This indicates that people's massive existence is an excellent avenue of creating a pool of consumers for foreign products and services, which is an important aspect that can enable an organization to thrive.

When it comes to cultural differences, a domestic company seems to do better in China. Such companies have a considerable impact and control; of the market, especially with how seamlessly the customers integrate with Chinese Culture. For foreign companies it would not be easy to penetrate the Chinese market. However, when the necessary research and adjustments of the products and marketing are made, there is an excellent chance of success for the foreign companies (John, 2017).

Furthermore, the act of gift-giving characterizes Chinese Culture. Receiving and giving gifts, according to the Chinese, is an essential act of strengthening their relationships. They also follow a specific gifting etiquette; thus, it's vital to follow their way to avoid being misunderstood. Greeting is another characteristic of the Culture in China as a sign of respect. For instance, a business card should be received with both hands and placed in a jacket rather than the trouser this is considered ethical, unlike in the US (John, 2017).

Hierarchy is another critical integral part of the business community in China. Leaders and managers are well distinguished as compared to America. Additionally, such individuals expect obedience without question. This means that in China, any humiliation or challenge to leaders and managers is taken seriously; thus, unlike in America, wherein a meeting, any member can interrupt their boss while doing their presentation through asking of equerries or suggestion, in China, this is regarded as disrespectful. These are some of the culture and cultural differences that Exxon Mobil managers and individuals responsible for expansion will encounter.

Distribution methods

Regarding how strong and elaborate the Culture is in China, the best distribution method is via Franchising. As mentioned earlier, local and domestic companies thrive well in the Chinese company; thus, Exxon Mobile company should partner with domestic companies through Franchising, where it will be able to take advantage of the roots the company has to penetrate the Chinese Market. Additionally, the company should employ locals who will be better positioned to communicate with fellow locals with ease, which will mitigate the language barrier issues. The use of locals will also help the company managers get insights on the Culture and its differences in the overseas company, which will help them interact and penetrate the market in general.

Internal and External Environmental Factors

The internal and external environmental factors of an organization should be a focal point of interest by the management. One of the external factors that are likely to be experienced by Exxon Mobil is the economy. The economy of a country where the expansion is taking place should be doing good to support the business's weight. The economy helps in spotting all threats and opportunities in the market. Employees and managers are one of the internal environmental factors that affect the Exxon Mobile general welfare of the organization. The employees' must be experts in their jobs to put out good standard work (Al-Mascati & Al-Badi, 2016). The way employees communicate and handle each other is vital because a serene environment is always peaceful for working.

Strengths

Exxon Mobil is a superpower international exporting oil and gas company; some strengths are associated with it. They have a successful track record of frequently developing new products in the market. It is called product innovation. It puts them at a higher link reducing competition from other companies. They are financially stable and have a reliable stream of cash flow that allows them to be diverse and pave their way into popular and international markets. It has also made them have the opportunity to use the best technology, making their products of high graded quality. Their suppliers are hardworking and reliable, which makes them have a strong distribution network. Exxon Mobil has traversed its way to every sector of the better population, causing them to accumulate a lot of money. They manage to reach all their potential markets without much struggle because of reliable partners (Kassem, Khoiry & Hamzah, 2019). Exxon Mobil has a strong dealer community, and many people have been employed to advertise and showcase their products, thus promoting the company. It has made people gain trust with it making it a brand super seller.

Problem Analysis, Recommendation and Implementation Costs

The oil giant company Exxon Mobil might incur a problem of running out of stock. It is essential to consider that they are expanding the business and all the needs have to be satisfied. They should be able to feed the market population. Running out of stock can be a tremendous cumbersome. The economy of the company will also be affected if this happens. The recommendations and implementation costs to expand the business should be met. For quality assurance and improvement, all the basic concepts and prepositions should be completed. There should be strategies that have to be followed so that everything can work out correctly (Adiprasetyo, Irnad & Nusril, 2019). The objectives and goals for expanding the business will be met if there are proper recommendations and implementation of costs.

Submission Requirements

Exxon Mobil submission requirements will help to know all the necessary things that are needed. Opening a bank account for the company will be required so that there can be zero confusion when it comes to accounting money. Hiring employees and managers who act as a source of labor will be relevant for Exxon Mobil Company. Obtaining licenses and permits from legal government offices is essential. Managing and operating a business will need approval from the government so that they can tell you the requirements that are expected by the law. Setting up a working record-keeping system so that all activities that shall be taking place in the organization can be recorded and preserved for future references (Tang, Leiliabadi & Olugu, 2017). An accounting system will also be needed to ensure that all the money that flows in and out of the organization is accounted for. Obtaining a Federal Employer Identification Number is also important to show the ownership of the business.

References

Adiprasetyo, T., Irnad, I., & Nusril, N. (2019). Using the structural equation modeling approach to determine the factors affecting the adoption of the Indonesian sustainable palm oil production system by smallholder farmers. Advances in Environmental Sciences, 11(1), 31-40.

Al-Mascati, H., & Al-Badi, A. H. (2016, March). Critical success factors affecting the adoption of cloud computing in oil and gas industry in Oman. In 2016 3rd MEC International Conference on Big Data and Smart City (ICBDSC) (pp. 1-7). IEEE.