Exxon MobilExxon MobilMatthew HarmsMatthew Harms

Jeff GoersJeff GoersJoe GoersJoe GoersJoel TrippJoel Tripp

ContentsContents1. Description and Evolution of Exxon 1. Description and Evolution of Exxon

MobilMobil2. SWOT Analysis2. SWOT Analysis3. Internal, External and Stakeholder 3. Internal, External and Stakeholder

Environment Environment4. Financial Assessment4. Financial Assessment5. Strategic Issues5. Strategic Issues6. The Next Strategic Steps…6. The Next Strategic Steps…

1. Exxon Mobil Description1. Exxon Mobil Description Exxon Mobil Corporation (Exxon Mobil) is engaged in Exxon Mobil Corporation (Exxon Mobil) is engaged in

exploration and production of crude oil and natural gas,exploration and production of crude oil and natural gas,manufacture of petroleum products, and transportation manufacture of petroleum products, and transportation and sale of crude oil, natural gas, and petroleum and sale of crude oil, natural gas, and petroleum products. products.

The company also manufactures and markets commodity The company also manufactures and markets commodity petrochemicals and specialty products. Exxon Mobil is petrochemicals and specialty products. Exxon Mobil is also engagedalso engagedin electric power generation.in electric power generation.

Exxon Mobil operates through three segments: (1) upstream (2) downstream (3) chemicals

Created by Matthew Harms

1. Exxon Mobil History1. Exxon Mobil History

With the merger of Exxon and Mobil in 1999, the newly formed Exxon Mobil Corporation brought together a shared history that dates back over 120 years to their origins as part of the Standard Oil family of companies

John D. Rockefeller and partners formed the Standard Oil Company of Ohio in 1870, after having entered the oil business in 1863 with the founding of Andrews, Clark & Company and later Rockefeller, Andrews & Flagler in 1867.

In 1882, Rockefeller and partners formed the Standard Oil Trust to unify what then numbered about 40 companies.

That same year, the Trust formed Standard Oil Company ofNew Jersey and Standard Oil Company of New York, which soon became two of the Trust’s larger concerns.

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1. Exxon Mobil Growth 1. Exxon Mobil Growth

The 1980s and 1990s marked a period of relative prosperity for Exxon and Mobil, with increased oil supplies and reduced prices. This period also saw the introduction of new marketing techniques, such as Exxon’s Tiger Market convenience stores and Mobil’s Speed pass technology. By 1999, Exxon and Mobil were poised to merge and become the world’s largest energy corporation.

In 2000, the company completed its $2 billion Sable Offshore Energy Project located off the coast of Nova Scotia, Canada.

In 2002, Exxon Mobil created a new business venture, Exxon Mobil Travel Guide

In 2003, the company launched its first synthetic blend motor oil for high mileage engines

1. Exxon Mobil Growth (cont.) 1. Exxon Mobil Growth (cont.)

In 2004, Exxon Mobil Chemical acquired sales and marketing assets of the BP's European isopropyl alcohol business.

In 2006, Exxon Mobil expanded its lubricants distribution network across Germany and Poland

Exxon Mobil Chemical announced the start-up of a new $20 million compounding facility in January 2008, to supply high-performance polymers to the automotive, appliance, and specialty consumer products industries.

In March 2009, Exxon announced an investment between $25 billion and $30 billion annually over the next five years to meet expected long-term growth in world energy demand.

2. SWOT Analysis - 2. SWOT Analysis - StrengthsStrengths

Leading Market Position Exxon Mobil is the world’s largest publicly traded

integrated petroleum and natural gas company Diversified Revenue Stream

Exxon Mobil has interests in 37 refineries located in 20 countries and markets its products through more than 29,000 retail service stations.

Steady Financial Performance Exxon Mobil has delivered consistent financial results.

The sales and other operating revenues of the company have increased at a CAGR of 12% during FY2004-FY2008 from $291.2 billion in FY2004 to $459.6 billion in FY2008.

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2. SWOT Analysis - 2. SWOT Analysis - WeaknessesWeaknesses

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Legal Proceedings Exxon Mobil is involved in many legal proceedings

upwards of $150 million dollars Employee Unrest

Exxon Mobil has seen strikes throughout its business units including one in Nigeria and Los Angeles

Declining Production in United States The upstream division in the US has recorded a

consistent decline in its production volumes. The crude oil and natural gas liquid production volumes in the region have been declining since FY2004.

2. SWOT Analysis - 2. SWOT Analysis - OpportunitiesOpportunities

Increasing Demand for Refined Products in Asia Over the next 10 years, the company expects about 60% percent of

the world’s petrochemical demand growth to occur in Asia, with more than one-third in China alone.

Capital Investments Exxon Mobil plans to invest between $25 billion and $30 billion

annually over the next five years to deliver major projects to meet growing world energy demand. The demand for global energy is expected to increase approximately 35% from 2005 to 2030.

These investments aim to develop new technology, bring on new upstream projects, increase the company’s base refining capacity, and grow its chemical business. These investments also reinforce Exxon Mobil’s position as an industry leader in bringing new supplies to the market.

Created by Matthew Harms

2. SWOT Analysis - 2. SWOT Analysis - ThreatsThreats

Economic Slowdown in the US and EuropeEconomic Slowdown in the US and Europe The company has a significant presence across the US and the The company has a significant presence across the US and the

European market. European market. Risks Associated with Business Outside U.S.Risks Associated with Business Outside U.S.

The company operates in more than 200 countries under the The company operates in more than 200 countries under the names Exxon Mobil, Exxon, Esso, and Mobil. The non-US names Exxon Mobil, Exxon, Esso, and Mobil. The non-US countries accounted for more than 70% of the total revenues of countries accounted for more than 70% of the total revenues of the company in the FY2008. Political and economic conditions the company in the FY2008. Political and economic conditions vary greatly along with exchange rates and regulatory vary greatly along with exchange rates and regulatory requirements within these countries.requirements within these countries.

Environmental RegulationsEnvironmental Regulations Exxon Mobil’s businesses are subject to numerous laws and

regulations relating to the protection of the environment. With rising awareness of the damage to the environment caused by industry, especially regarding global warming, regulatory standards have been continuously tightened in recent years.

Created by Matthew Harms

Internal EnvironmentInternal Environment Senior LeadershipSenior Leadership

Rex W. Tillerson - CEORex W. Tillerson - CEO Mark W. Albers – Senior Vice PresidentMark W. Albers – Senior Vice President Michael J. Dolan – Senior Vice PresidentMichael J. Dolan – Senior Vice President Andrew P. Swinger – Senior Vice Andrew P. Swinger – Senior Vice

PresidentPresident Donald D. Humphreys – Senior Vice Donald D. Humphreys – Senior Vice

President and TresurerPresident and Tresurer

Jeffrey L. Goers

Internal EnvironmentInternal Environment Organizational StructureOrganizational Structure

Functionally basedFunctionally based Each company stewards a focused Each company stewards a focused

portfolio of operations around the worldportfolio of operations around the world President at the helm and authority to run President at the helm and authority to run

itselfitself Consists of 10 core companies that Consists of 10 core companies that

oversee individual businesses worldwideoversee individual businesses worldwide Exxon Global Services provide centralized Exxon Global Services provide centralized

support through – procurement, support through – procurement, information services, and facilitiesinformation services, and facilities

Jeffrey L. Goers

Internal EnvironmentInternal Environment Corporate CultureCorporate Culture

SafetySafety Health and safety of its employees is a core valueHealth and safety of its employees is a core value

EthicsEthics Commitment to high ethical standardsCommitment to high ethical standards

Disciplined ApproachDisciplined Approach Business model focuses on sustainable, long-term Business model focuses on sustainable, long-term

objectivesobjectives Supported by disciplined investments that drive excellenceSupported by disciplined investments that drive excellence

Technology LeadershipTechnology Leadership Utilizes a variety of technologies to make energy supplies Utilizes a variety of technologies to make energy supplies

more available, maximize efficiency in operations and daily more available, maximize efficiency in operations and daily liveslives

Diverse workforceDiverse workforce

Jeffrey L. Goers

External EnvironmentExternal Environment Political/GovernmentPolitical/Government

Cap and tradeCap and trade Carbon emission legislationCarbon emission legislation Carbon taxCarbon tax

EconomicEconomic Risk managementRisk management

OperationalOperational TechnologicalTechnological Project InvestmentsProject Investments Fluctuations in commodity pricesFluctuations in commodity prices

Jeffrey L. Goers

External EnvironmentExternal Environment

Environmental IssuesEnvironmental Issues Climate ChangeClimate Change

Believes that something should be done Believes that something should be done about itabout it

Competitive LandscapeCompetitive Landscape BPBP Chevron CorporationChevron Corporation Royal Dutch ShellRoyal Dutch Shell

Jeffrey L. Goers

Stakeholder Stakeholder EnvironmentEnvironment

StakeholdersStakeholders ShareholdersShareholders

Enhancing the long-term value of investment Enhancing the long-term value of investment dollarsdollars

CustomersCustomers Consistently satisfy customer needs through high Consistently satisfy customer needs through high

quality products and services at quality pricesquality products and services at quality prices EmployeesEmployees

Hire and retain the most qualified people available Hire and retain the most qualified people available and maximize their opportunities through training and maximize their opportunities through training and developmentand development

CommunitiesCommunities Commit to be a good corporate citizen in all places Commit to be a good corporate citizen in all places

in which they operatein which they operate

Jeffrey L. Goers

Financial AssessmentFinancial Assessment 2009 Annual Results2009 Annual Results

Reported profits of $19.42 billionReported profits of $19.42 billion Down over 50 percent from $45 billion in Down over 50 percent from $45 billion in

profits in 2008profits in 2008 Most profits came from product and Most profits came from product and

exploration divisionexploration division Operating profit of $5.78 billionOperating profit of $5.78 billion

Capital and exploration $27.1 billionCapital and exploration $27.1 billion Long-term investment focusLong-term investment focus

Jeffrey L. Goers

Financial AssessmentFinancial Assessment 2010 Second Quarter Results2010 Second Quarter Results

Income nearly doubled to $7.56 billion as oil Income nearly doubled to $7.56 billion as oil prices increased from last yearprices increased from last year

Highest quarterly profit since the $7.82 billion it Highest quarterly profit since the $7.82 billion it earned in the last three months of 2008earned in the last three months of 2008

Earnings per share rose $1.60 from $.81 a Earnings per share rose $1.60 from $.81 a year agoyear ago

Analysts expected earnings per share to reach $1.46Analysts expected earnings per share to reach $1.46 Revenue increased 24 percent to $92.5 billionRevenue increased 24 percent to $92.5 billion Completed the acquisition of XTO EnergyCompleted the acquisition of XTO Energy

Valued at $29 billion and makes Exxon the largest Valued at $29 billion and makes Exxon the largest natural-gas company in the U.S.natural-gas company in the U.S.

Jeffrey L. Goers

Current IssuesCurrent Issues Spill PreventionSpill Prevention

We are committed to the prevention of spills from We are committed to the prevention of spills from our operations. We have increased emphasis on our operations. We have increased emphasis on equipment reliability, individual accountability in equipment reliability, individual accountability in daily activities to reduce human error, training to daily activities to reduce human error, training to address high spill risk areas, and increased address high spill risk areas, and increased infrastructure inspections.infrastructure inspections.

Environmental PerformanceEnvironmental Performance As our diverse portfolio of projects spans the globe As our diverse portfolio of projects spans the globe

and requires us to work in remote and sensitive and requires us to work in remote and sensitive environments—arctic locations, deep water, and environments—arctic locations, deep water, and biodiverse onshore locations—we are committed to biodiverse onshore locations—we are committed to operating in a way that protects the environment.operating in a way that protects the environment.

Current IssuesCurrent Issues Safety and Environment in the WorkplaceSafety and Environment in the Workplace

Our employees are our most valuable resource Our employees are our most valuable resource and are at the core of ExxonMobil's and are at the core of ExxonMobil's achievements. We invest in the safety, health, achievements. We invest in the safety, health, development, and training of our workforce to development, and training of our workforce to ensure that we attract and retain the most ensure that we attract and retain the most capable individuals.capable individuals.

Energy OutlookEnergy Outlook ExxonMobil expects that global energy demand ExxonMobil expects that global energy demand

in 2030 will be almost 35 percent higher than in 2030 will be almost 35 percent higher than in 2005, even accounting for the recession that in 2005, even accounting for the recession that dampened energy demand in 2009.dampened energy demand in 2009.

Current IssuesCurrent Issues Energy TechnologyEnergy Technology

Breakthrough technologies—including some Breakthrough technologies—including some pioneered by ExxonMobil—have helped keep pioneered by ExxonMobil—have helped keep pace with rising global energy demand by pace with rising global energy demand by making more energy supplies available, while making more energy supplies available, while also reducing the environmental footprint of also reducing the environmental footprint of energy development.energy development.

Managing Climate RisksManaging Climate Risks Managing greenhouse-gas emissions and Managing greenhouse-gas emissions and

meeting growing energy demand requires an meeting growing energy demand requires an integrated set of solutions including increasing integrated set of solutions including increasing efficiency, advancing lower-carbon energy efficiency, advancing lower-carbon energy technologies, and supporting effective national technologies, and supporting effective national and international policies.and international policies.

Current IssuesCurrent Issues Reducing greenhouse gas emissions from our Reducing greenhouse gas emissions from our

operationsoperations Our strategy to reduce greenhouse-gas emissions Our strategy to reduce greenhouse-gas emissions

is focused on increasing energy efficiency, is focused on increasing energy efficiency,  implementing current proven emission-reducing  implementing current proven emission-reducing technologies and developing breakthrough technologies and developing breakthrough technologies.technologies.

Stable tax policies to spur long-term investmentStable tax policies to spur long-term investment In 2009 ExxonMobil's worldwide tax expenses In 2009 ExxonMobil's worldwide tax expenses

amounted to $81 billion, more than four times our amounted to $81 billion, more than four times our earnings. About 25 percent of our revenue went to earnings. About 25 percent of our revenue went to taxes around the world. Our earnings, after taxes, taxes around the world. Our earnings, after taxes, amounted to 6.2 percent of our revenues.amounted to 6.2 percent of our revenues.

Current IssuesCurrent Issues Community InvestmentCommunity Investment

Making the most of energy resources is about Making the most of energy resources is about more than oil and gas production — it is about more than oil and gas production — it is about forming a global partnership for development, forming a global partnership for development, and creating and delivering sustainable, long-and creating and delivering sustainable, long-term benefits to local communities.term benefits to local communities.

Human Rights and SecurityHuman Rights and Security As a global company, our role in helping address As a global company, our role in helping address

these complexities has expanded over the years. these complexities has expanded over the years. We promote respect for human rights, not just We promote respect for human rights, not just because doing so fosters a stable and productive because doing so fosters a stable and productive business environment, but more importantly, business environment, but more importantly, because it is the right and responsible thing to do.because it is the right and responsible thing to do.

Current IssuesCurrent Issues TransparencyTransparency

ExxonMobil is committed to honest and ethical ExxonMobil is committed to honest and ethical behavior and opposes corruption by supporting behavior and opposes corruption by supporting transparency. We are also committed to promoting transparency. We are also committed to promoting respect for human rights and to serving as a positive respect for human rights and to serving as a positive influence in the communities where we operate. It is influence in the communities where we operate. It is the right and responsible thing to do, and doing so the right and responsible thing to do, and doing so promotes stable and constructive business promotes stable and constructive business environments.environments.

Factors in Fuel PricingFactors in Fuel Pricing Although current retail gasoline prices are well below Although current retail gasoline prices are well below

the levels of almost two years ago in the summer of the levels of almost two years ago in the summer of 2008, gasoline prices have been increasing over the 2008, gasoline prices have been increasing over the past few weeks, along with possible early signs of past few weeks, along with possible early signs of economic recovery in the U.S. and abroad.economic recovery in the U.S. and abroad.

Moving Forward: What Moving Forward: What should Exxon Mobile do should Exxon Mobile do

next?next? Work to increase profit marginWork to increase profit margin

Has missed earnings targets for four of the Has missed earnings targets for four of the last five quarterslast five quarters

During second quarter 2010 share price During second quarter 2010 share price dropped from $68.66 to $57.02.dropped from $68.66 to $57.02.

Lowest level since 2005.Lowest level since 2005. Stock price has stagnated around the $60 mark.Stock price has stagnated around the $60 mark. Will take a significant profit surprise to raise Will take a significant profit surprise to raise

stock price any further.stock price any further. Should set a earnings goal of at least Should set a earnings goal of at least

$1.60/share in order to help raise stock price.$1.60/share in order to help raise stock price.

Joel Tripp

Moving Forward: What Moving Forward: What should Exxon Mobile do should Exxon Mobile do

next?next? Push Natural Gas as a source of clean energyPush Natural Gas as a source of clean energy

Releases 40% to 50% less carbon dioxide than Releases 40% to 50% less carbon dioxide than coal and 25% less than petroleum.coal and 25% less than petroleum.

Replacing U.S. coal power with natural gas Replacing U.S. coal power with natural gas would cut carbon dioxide emissions by 1 billion would cut carbon dioxide emissions by 1 billion tons a year.tons a year.

Exxon has explored and developed a massive Exxon has explored and developed a massive natural gas megafield in Qatar.natural gas megafield in Qatar.

Process also cheaply produces butane and methane.Process also cheaply produces butane and methane. Lower prices for natural gas could entice energy Lower prices for natural gas could entice energy

producers and other potential customers to producers and other potential customers to switch, thus growing demand.switch, thus growing demand.

Natural Gas will be more attractive than coal and Natural Gas will be more attractive than coal and oil if carbon offset legislation become a reality.oil if carbon offset legislation become a reality.

Joel Tripp

Moving Forward: What Moving Forward: What should Exxon Mobile do should Exxon Mobile do

next?next? Develop Green Energy InitiativesDevelop Green Energy Initiatives

Green Algae farms show promiseGreen Algae farms show promise Has the potential to produce automotive Has the potential to produce automotive

fuel from sunlight.fuel from sunlight. Good Public Relations MoveGood Public Relations Move

BP gulf oil spill has damaged oil industry BP gulf oil spill has damaged oil industry image.image.

Exxon brand name still associated with Exxon brand name still associated with Exxon Valdez.Exxon Valdez.

Joel Tripp

ReferencesReferences

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(2010). (2010). Exxon Mobil (us)Exxon Mobil (us). Retrieved August 19, 2010 from . Retrieved August 19, 2010 from http://www.corp.exxonmobil.com/corporate/http://www.corp.exxonmobil.com/corporate/

(2010). (2010). Exxon Profit Soars 91% On Rebounding Prices, MarginsExxon Profit Soars 91% On Rebounding Prices, Margins. Wall Street Journal. Retrieved . Wall Street Journal. Retrieved August 19, 2010 from http://blogs.wsj.com/marketbeat/2010/07/29/exxon-profit-soars-91-on-August 19, 2010 from http://blogs.wsj.com/marketbeat/2010/07/29/exxon-profit-soars-91-on-rebounding-prices-margins/?KEYWORDS=Exxon+Mobilrebounding-prices-margins/?KEYWORDS=Exxon+Mobil

(2010). (2010). Exxon Mobil, Johnson & Johnson: Money Flow Leaders (XOM, JNJ). Wall Street Jounal. Retrieved August 19, 2010 from http://online.wsj.com/article/SB100014240527487039993045753993 21830549904.html?KEYWORDS=Exxon+Mobil