Strategic Choice and
Evaluation
Exxon Mobil
Brenda Catron, Ashley May, Darrelle Pan, Elizabeth Patz, Bobbi Ready,
Diana Velez & Hridya Warrier
STR/581
March 30, 2015
Dan McFadden
Introduction
This week our team has researched Exxon Mobil’s growth
over the years. The paper presents an in-depth analysis of
the company’s value discipline, current generic strategies
and grand strategies.
The team also puts forth strategic choices Exxon should
follow to improve the company image, foster growth,
increase profits, and boost its market share.
Exxon Mobil SWOT Analysis

Strengths
Leading market position and strong R&D capabilities

Weakness
Employee unrest and continued weak performance in the
US

Opportunities
Increasing demand for liquefied natural gas (LNG)

Threats
Environmental regulations and risks associated with
conducting business outside the country.
The “Best Value Discipline”
Selecting the right value principle when operating a company is
crucial, as it is the identity of a company. The three main principles
are described below. The most apt principle that suits the
company’s culture and ethics is the Best Value Discipline.

Operational Excellence

Product Leadership

Customer Intimacy
The “Best Value Discipline”

Operational Excellence
Generic Strategy

Global Circulation

Business Vitality

Competitive Advantage
Generic Strategy

Cost Leadership

Differentiation

Focus Strategies
Grand Strategies
Grand strategies provides a master long-term plan with basic direction with
major actions for achieving long-term business objectives, also known as a
comprehensive approach (Pearce).

Concentrated Growth
Focused resources to dominant market, product and technology, also
known as market penetration strategy

Market Development
Organizations market existing products or other uses for existing
products, and introduce into new markets.

Product Development
Developing new products through substantial changes to existing
products leveraging current market. Strategy includes maximizing,
minimizing, substituting, modifying, rearranging, reversing,
combining new products.

Innovation
Includes R & D, benefits can include competitive edge. Used with other
strategies to avoid high cost and risk as product life cycle is determined by
competitors’ replication of innovation and cost of implementation.
Grand Strategies

Horizontal acquisition
Acquiring similar firms eliminates competition and promotes expansion
into new markets. Can be strategic geographically; acquiring similar
companies in select markets are targeted to increase returns

Vertical acquisition
Acquired company supplies raw materials for the final products of
the acquiring company or provides new customers for the company.
This strategy can increase the dependability of supply and improve
the quality of materials. Enhance a customer base for the supplies
and control competitive edge in industries with limited resources.

Concentric Diversification
Strategic acquisition of businesses that think alike in terms of market,
technology, or products. Acquired business is independent from the
acquiring business, but their synergy decrease weakness and threats

Conglomerate Diversification
Strategy employed by organization seeking to increase financial gain. It is
the acquisition of a company based on profitability. Organization seeking
to diversify their financial portfolios, increasing financial leverage for
future endeavors
Grand Strategies

Turnaround
Turnaround strategy is, to convert, change or transform a loss-making company into a
profit-making company. Turnaround is a restructuring strategy that tries to reverse the
position from loss to profit, from declining sales to increasing sales, from weakness to
strength and from instability to stability.

Divestiture
The selling of a firm’s assets, or the disposal of those assets to achieve greater
liquidity or to reduce the debt burden of the firm. Selling off the parts of a firm which
lose money or do not have a strong return on investment.

Liquidation
The selling off of a firm’s assets, including physical assets, and intellectual
assets, from plant to merchandise and from brands to patents. The goal of a
liquidation strategy is to recoup as much money of an owners invested
money before shuttering the business.

Bankruptcy, Two approaches:
1.
Liquidation, where a firms assets are completely distributed to creditors
who usually receive a small fraction of the total owed to them.
2.
Reorganization, which involves the temporary freezing of claims while the
company reorganizes and rebuilds it’s operations in a more profitable
manner. Reorganization bankruptcy is seen as the more advantageous as it
offers the maximum repayment of a firm’s debt if their recovery strategy is
successful.
Grand Strategies

Joint Ventures
A new firm is formed to achieve specific objectives of a partnership , like temporary
arrangement, which are advantageous as a risk reducing mechanism in planning new
market penetration, and in pooling resources. The problems of equity ownership,
operational control, and distribution of profits or losses are unique problems of the
arrangement.

Strategic Alliances
A strategic alliance is an agreement of cooperation among two or more independent
firms to work together toward common goals. Firms in a strategic alliance do not
form a new entity to further their purpose but collaborate while remaining apart and
distinct.

Consortia
Consortia is a group made up of two or more individuals or companies that work
together toward achieving a chosen objective. Each being responsible for only the
obligations set out in the consortium’s contract. Every entity that is under the
consortium remains independent in his or her normal business operations and has no
say over another member's operations that are not related to the consortium.
Strategy to Improve Image

Actively participate in Social Media Presence through
Facebook, Twitter, and YouTube

Use of digital and social media to build engagement in Exxon
Mobil’s website

Use of innovation through marketing and adverting campaigns

Offer scholarships, grants, and professional learning

Willing to be vulnerable
Strategies to Foster Growth

High global energy demand

Significant advancements in oil and gas technologies

Projecting America to a Net energy exporter

New Global trade opportunities
Strategies to increase Profitability

Upgrade Belgium Refinery

Boost Refinery Performance

Integrated Business Model

Cut Back on Spending
Strategies to Improve Market Share

Increase reserves and production

High demand for oil and gas

Increase in flat earnings

Enhance dividend growth
Recommended Strategy


Exxon Mobil Analysts Study in Energy Supplies
1.
Global Energy Demand to Increase 30% by 2040
2.
Electricity Demand will make natural gas the fastest
growing energy source
3.
Natural gas is expected to meet 60% of energy
needs over three decades
Recommendation in an Investment Plan
1.
Five Year Plan
2.
$185 Billion Investment
3.
Develop New Energy Supplies
4.
Domestically and Globally
References

Crowe, T. 2014. 3 Reasons ExxonMobil's Stock Could Rise.
The Motley Fool. Retrieved from
http://www.fool.com/investing/general/2014/08/13/3-reasonsexxonmobils-stock-could-rise.aspx

Exxon Mobil Term Paper. Academia.edu. Retrieved from
http://www.academia.edu/9651877/Exxon_Mobil_Term_Paper

Exxon Hydraulic Fracturing Environment and Safety, report to
shareholders. Exxon Mobil Corporate. Retrieved from
http://corporate.exxonmobil.com/en/engineering/hydraulicfracturing/environment-and-safety/unconventional-resourcesdevelopment-risk-management?parentId=0792cb2b-f5b043d5-95a4-49bc4dda2285

Exxon Mobil SWOT Analysis. Yousigma.com. Retrieved from
http://www.yousigma.com/comparativeanalysis/exxonmobil.ht
ml
References

Exxon Mobil (2015) Guiding Principles. Exxon Mobil
Corporate Retrieved from
http://corporate.exxonmobil.com/en/company/aboutus/guiding-principles/our-guidingprinciples?parentId=9d0ed0ac-4f85-4578-8c184ed13f4aff74

Exxon Mobil Operations Integrity Management System.
Exxon Mobil Corporate. Retrieved from
http://corporate.exxonmobil.com/~/media/Brochures/2009/
OIMS_Framework_Brochure.pdf

Exxon Mobil Summary Annual Report 2013. Retrieved
from
http://cdn.exxonmobil.com/~/media/Reports/Summary%20
Annual%20Report/2013_ExxonMobil_Summary_Annual_
Report.pdf
References

Horovitz, B. 2014. Exxon 3Q profits up on refining boost. USA
Today. Retrieved from
http://www.usatoday.com/story/money/business/2014/10/31/exxonexxon-mobile-gasoline-refining-earnings-petroleum-gasprices/18233701/

Investing, 2014. Forbes. Retrieved from
http://www.forbes.com/sites/greatspeculations/2014/07/11/exxonplans-to-boost-its-downstream-profitability-with-belgium-refineryupgrade/

Investing, 2015. Forbes. Retrieved from
http://www.forbes.com/sites/greatspeculations/2015/02/10/whatsdriving-our-96-per-share-price-estimate-for-exxon-mobil/

Koch, W., (2014). Exxon Valdez oil spill, 25 years later, offers
lessons. USA TODAY. Retrieved from:
http://www.usatoday.com/story/news/nation/2014/03/21/exxonvaldez-25th-anniversary/6707983/
References

McCreery J. Phillips E. Cigala F. (2013) Operational excellence:
The imperative for oil and gas companies. Retrieved from
http://www.bain.com/publications/articles/operational-excellencethe-imperative-for-oil-and-gas-companies.aspx

Money Morning, 2015. Nasdaq. Retrieved from
http://www.nasdaq.com/article/why-the-exxon-mobil-stock-pricehit-a-fresh-52-week-low-cm453835#/ixzz3VnnH8Jjl

News Releases, 2012. ExxonMobil press release. Retrieved from
http://news.exxonmobil.com/press-release/exxonmobils-outlookenergy-forecasts-shift-global-energy-balance-and-new-opportunities

Pearce, 13th Edition. (n. d.). Strategic Management: Planning for
Domestic & Global Competition, McGraw-Hill Create. VitalBook
file. Retrieved from http://online.vitalsource.com/books/