Case Study: Success Story of Exxon Mobil

Exxon Mobil Corporation (Exxon Mobil) is an integrated oil and gas company based in the US. It is engaged in exploration and production, refining, and marketing of oil and natural gas. The company is also engaged in the production of chemicals, commodity petrochemicals, and electricity generation. The company operates across the globe. It is headquartered in Irving, Texas and employs about 80,000 people.

Success Story of Exxon Mobil

Exxon Mobil operates through three segments: upstream, downstream, and chemicals.

The upstream segment explores for and produces crude oil and natural gas. The company’s upstream business has operations in 36 countries and includes five global companies. These companies are responsible for the corporation’s exploration, development, production, gas and power marketing, and upstream-research activities. The company’s upstream portfolio includes operations in the US, Canada, South America, Europe, the Asia-Pacific, Australia, the Middle East, Russia, the Caspian, and Africa.

The company’s downstream activities include refining, supply, and fuels marketing. The company’s refining and supply business focuses on providing fuel products and feedstock. Exxon Mobil manufactures clean fuels, lubes, and other high-valued products. The company has interests in 12 lubricant refineries and manufactures three brands of finished lubricants (Exxon, Mobil, and Esso) through interests in over 31 blending plants. The fuels marketing business operates throughout the world. The Exxon, Mobil, Esso, and On the Run brands serve motorists at nearly 29,000 service stations and provide over one million industrial and wholesale customers with fuel products. Fuel products and services are provided to aviation customers at more than 630 airports and to marine customers at more than 180 marine ports around the world. The company supplies lube base stocks and markets finished lubricants and specialty products.

The chemicals division manufactures and sells petrochemicals. Exxon Mobil Chemical is an integrated manufacturer and global marketer of olefins, aromatics, fluids, synthetic rubber, polyethylene, polypropylene, oriented polypropylene packaging films, plasticizers, synthetic lubricant base stocks, additives for fuels and lubricants, zeolite catalysts, and other petrochemical products.

Success Story

Horizontal merger between Exxon and Mobil, result in 23% increased in market share, according to Fortune 500, ExxonMobil, stands at No1 position in 2006, further mergers are crucial components for the company’s survival and growth in the long term.

ExxonMobil adopted a balanced scorecard strategy.   In general, however ExxonMobil adopted the differentiation strategy with their operational efficiency. ExxonMobil sought to attract customers that are willing to pay additional premiums for their products and at the same time improving efficiency in the supply chain in order to reduce cost. Moreover, ExxonMobil has focused on its strengths on its core business research and development to e-business and venture capital activities.

ExxonMobil, venture to a complete new strategy, apart from their core business such as gasoline related products. ExxonMobil encourages its customers to purchase goods from its convenience stores apart from filling gasoline in the ExxonMobil gas station. Second, with its superior buying experience, the company has also able to provide convenient and fast service, hygiene restrooms and friendly employees to its customers. This exceptional service has made the relationships with its customers to become more bonded than ever before.

ExxonMobil focuses on operational efficiency, margin improvement initiatives, and prudent capital management. To achieve this, the company continues to advance its technologies, introducing marketing innovations, expanding the business lines and established markets in overseas, for example, for the refining process ExxonMobil has continuously improve health and safety procedures to reduce accidents. This focus strategy on controlling costs has helped the company to reduce costs, thus, becoming more efficient. And finally fourth, the success of the company is also derived from the effort and commitment of its employees. The ability and flexibility to continuously change in this volatile industry is a competitive advantage over the other companies.

Innovations in ExxonMobil

ExxonMobil is a greatest industry in the world in terms of oil extraction and production and the business volume is mainly based on oil. World’s prospectus in oil and petroleum products is drastically changed. Consumers are more aware and interested in the renewable energy source. While the people were always talking about the innovation and innovation and the ExxonMobil had nothing to do despite of its billion’s of dollar. The management thus thought to approach the business in different way which would base on technology and innovations. Since the consumers were searching the alternatives of petrol and oil energy where they could stay assured environmentally and personal uses. Some of the socialistic groups which never believed that there is any future of oil and petroleum products as they were badly affecting the personal lives and environment. Their loud voices which was media frenzy and almost everybody was supporting this, ExxonMobil had nowhere to go except recreating them and innovating their classical selling modules, business and ideas. Now it seemed like the ExxonMobil who always wanted to be a leader in energy sector in terms of sales, business, products and innovations as well as technology, was almost same or even gradually losing its image among the consumer level because it was producing, extracting, producing and marketing the highest level of oil and petroleum among all, seemed the major culprit of environmentally disrupting player. They had a challenge with them and if not solved, they were sure to be out of their current leading position.

As it is said that “A leader always wants to remain a leader” and this was enforcing ExxonMobil to get more innovative and technical. Public consumers’ perceptions and the company’s management were the main driving force for all these to happen. From the past, this company did not only sell its brands but also has been advocating the public safety as well. They have been researching, supporting and investing millions of dollars in these issues. ExxonMobil has been talking and working on the issues of climate changes their problems and solutions, advancements in fuel technologies; where consumers can get the efficient fuels in affordable prices, reducing GHG (greenhouse gas reduction) in operations including reduced hydrocarbon flaring, CCS (Carbon capture and storage) technology reducing overall emissions. They have spent more than $100 million in CFZ (controlled freeze zone) technology which ultimately will address the risks in climate change, along with Co2 separations from raw natural gas. Cogeneration is their exciting and ever growing hi-tech innovative approach in producing electricity from raw materials and consumer products; an ultimate scientific recycling process.

ExxonMobil innovations and far citation technologies do not stop there. Their most advancement in vehicle and fuel technology is astounding. They are launching a concept of production the next generation biofuels from photosynthetic algae. This will not be an integral part of pride for the ExxonMobil but also will be shining future in alternative energy source sector. Lithium ion battery technology making a zero-emissions vehicles, new tire lining technology for vehicles tires longevity better fuel efficiency and plastic automotive technology are the another edge of ExxonMobil’s changing world vision.

Thus the public sense who were always wanted to be more and trendy now was pushing ExxonMobil, if not they were indirectly knocking the ExxonMobil to awake. ExxonMobil has always been in business with the slogan of innovations and change. They have not only changed the prospectus of oil business but also have clearly shown their planning up to 2030. This it defines that how far the ExxonMobil is thinking about changing the organization with technology and innovations.

Now, it was a time to come with change in the way to customers and had no options as the newly established oil and petroleum organizations also were coming with at least few publicly demanded issues and this was the threat to ExxonMobil. However, they are always in the favor of changes and innovations, they had not walked dramatically till they brought a concept of bio fuel for an algae. The world was thrilled when it was officially informed that ExxonMobil is not only working to produce the biofuell from algae but also had proved the world that it has worked well in the process. This innovative step of ExxonMobil not only differentiate it and it’s pattern of business from other competitors but also showed and proved how excited and interested the ExxonMobil was about the consumer’s interests, expectations, demands and environmental aware. They not only heightened themselves in terms of business with this but also were successful to win the heart of the consumers.

Being a leader in the energy sector, ExxonMobil has maintained to satisfy its millions of customers worldwide with the commitment to safe operations, developing the employees and providing the huge contribution to the community.

Organizational strategy of ExxonMobil

ExxonMobil has not been in the top position with small games. Their visionary approaches, perfect management, a systematic way of working, cooperative teamwork and open forum for innovation has made them successful. To manage the change in any organization, it is necessary to build the intercultural bridges and highlight the necessity of dedicated training in the area of emotional intelligence. Probability of successes is related to the impact of the human emotions on business development.

ExxonMobil is effectively using the resources within the organization to bring the innovations and managing the change. Effective use of people, technology and processes with smartest workflows is what they are being able to manage the success from. The vision of change can be practiced and realized fully only when most people of the organization know and understand the goals and direction of the company in which they are being led. This mutual goal-sharing and the shared sense of desired outcomes in future can motivate each and every team member and coordinate actions which lead the organizations towards the transformation in the organization.

The primary business value is created with the combining effect of people, updated innovative technology, process and workflow, ExxonMobil management is far ahead in organizing these key factors in managing change and developing the organization. ExxonMobil employs the people who are skilled and do have the passion in adding the value to the organization. They further train and develop the team members to sharpen their productivity thus prepares the valuable assets to bring changes. They always believed in technology and innovation which provides the state-of- the -art tools of the company. ExxonMobil is properly utilizing the capitals, time and a perfect combination of human and machines.

Securing access to reserves is another driving strategy of ExxonMobil. They have changed their policy and physical state of the organization according to the demand of the time from merger and adoption e.g. merger of Exxon, Mobil and Esso. Their attention to technology innovation, speeding up of reserve growth and production growth and cultural diversity is among the key managing factors.

Communication is the major source in the process of organization’s success. An effective approach in communication is necessary across the management level. Organization needs to know well that people’s egos, prejudices, traditions, cultures, conflicting feelings, goals and their strong differences of opinion may undermine the mutual understanding. If the team members do have the opposite feelings, they may not comfortably share the ideas and knowledge at the fullest. Thus the cultural communication gaps needs to be recovered. ExxonMobil is applying the principle of perfect communication. This connection is across the organizations from team member to another team member, within management level, senior management to junior teams including marketing teams, a proper communication is necessary and that is what ExxonMobil is maintaining. There can be the experiential, inter-disciplinal, organizational and cultural communications gaps to be addressed. In the large organization like ExxonMobil, the chain of command may have too many layers to pass the messages from sender to receiver. Even in ExxonMobil has got the multilayered culture but they have the strong and faster communication command which promptly responds to the issues concerned.

Organizational culture plays the vital role in effective management in change. Most of the employee find ExxonMobil a good working place because of the culture of the company.

Strategic Differentiation

ExxonMobil has created the different directories, divisions, groups, units and strategic business units to manage such things within the organization. In support of managing change there should be the processes namely, performance management, where organizations comprises the regular budgeting, monthly reporting, market research, governance, risk management, unintended consequences, performance appraisal etc. thus the challenges are overcome and changes are defined. Governance, where the poorly managed changes are re characterized by unclear accountabilities. Another process is risk management; this is a process of assessing risk in terms of changes outcomes and in terms of risk of disruption associated with implementation of changes. The final process is of solving the unintended consequences. This is a part of risk management while managing the changes but to those issues which need especial or separate treatment .

Employee management is the most difficult and the most admired part of ExxonMobil. Poor team management and poor strategy leads to the disruption in changes and the expected outcomes cannot be achieved. Thus ExxonMobil has ensured the compatibility between structure and change vision. Company is aware that if the structure barrier is not dissolved, managing the change is difficult as the employee get frustrated, less motivated, narrowed leading to the impaired productivity and this undermines transformational effort and changes brought. Employees get empowered are more prone to succeed when they are equipped with right skills, knowledge, motivations and attitude to operate the intended organizational environment. Keeping these things as major issues, ExxonMobil continuously improves the quality of its employee by training them about the technical skills, social skills and attitudes. This way, they have effectively being able to manage the change and innovate their ideas.

The ultimate strategy usually involves the quality or performance of the products, cost and price, sale promotion and service, and strength of the sales channels. There are four segments where ExxonMobil’s strategy is working.

  • Product differentiation: ExxonMobil is spending billions of dollars and investing the great deal of time in researching and branding their products to position it uniquely in the market place e.g. biofuels from algae
  • Market segmentation: management level of ExxonMobil has cleverly segmented and advertised its products, changes and innovations differently in deferent regions. They have mergers and acquisitions e.g. in India and China.
  • Price and cost leadership: ExxonMobil is leader in the market because of quality products and affordable prices, however, the prices have been a subject of concern from last few years.
  • Construction of entry and mobility barriers: this is where ExxonMobil leaves every another company far behind. Its vision till year 2030, hi-tech products e.g. biofuel from algae etc makes competitor difficult to enter the market in same specialty.

These are the strategies that ExxonMobil is applying in managing producing and managing changes within the organization.

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