In this report, we are going to analyze the strategy, balance scorecard and the strategic profitability of an organisation. The organisation we had chosen is the famous petroleum and gas company, ExxonMobil. First, we will describe some basic information of ExxonMobil briefly. Next, we are going to state the mission of it and classify ExxonMobil’s strategy. ExxonMobil’s value proposition and core competencies will also be identified. Furthermore, Porters Five Forces Framework and the balance scorecard are used in the analysis in order to explain how it can influence the organisation’s profit and evaluate different measures.
ExxonMobil’s primary business is the exploration and production of oil and natural gas, the refining and manufacturing of petroleum products, and the sale of crude oil, petroleum products and natural gas. ExxonMobil also transports oil and has interests in electric power generation facilities. ExxonMobil is the world’s largest publicly traded international oil and gas company, and the world’s largest refiner and marketer of petroleum products by revenue, at $ 370.125 billion for the financial year of 2010 (Appendix I) and also the largest corporation by market capitalization, at $359.55 billion on Oct 1st, 2011 (Yahoo Finance 2011). It operates in more than 200 countries across the globe with several brand names including ExxonMobil, Exxon, Esso and Mobil. The company is headquartered at Irving in Texas, US.
“Meeting the rising demand for energy – safely and with minimal environmental impact” (ExxonMobil 2011) is ExxonMobil’s mission. The company’s corporate slogan is “Taking on the world’s toughest energy challenges. (ExxonMobil 2011) “ExxonMobil’s guiding principle is “we must continuously achieve superior financial and operating results while simultaneously adhering to high ethical standards (ExxonMobil 2011). ExxonMobil has been helping to meet worldwide energy demand for over 120 years. Today, we are heavily involved in exploring and retrieving oil and gas reserves and investing to secure future energy supplies around world.
ExxonMobil operates as a broad low-cost-provider in the Upstream and Downstream businesses. This is an appropriate strategy given the company’s primary products are commodities. So any differentiation among competing products is difficult, and there is low switching cost for buyers. Therefore, the company must compete on the basis of cost and efficiency. It achieves its cost leadership by competing through technological and operational efficiencies in the areas of exploration, extraction, and refining.
ExxonMobil’s oil and gas products are commodities, so it is difficult to differentiate its products from competitors. The core of Mobil’s business strategy was customer value proposition which describes the unique mix of product and service attributes, customer relations, and corporate image that the company offers. It defined how Mobil differentiated itself from competitors to attract, retain, and deepen relationships with targeted customers. ExxonMobil differentiates and values their products in types of: the range of products, product quality, accessibility, brand name, quality of service and price (Mank 2011, p. 79). For example, specialty chemical products provide an opportunity to differentiate through quality and range of products.
ExxonMobil’s Chemical division employs a best-value strategy to leverage its leadership in production, costs and proprietary chemical and polymer offerings. Some of its chemical products are sufficiently differentiated from competitors (Mank 2011, pp. 41-42). The company achieves cost leadership through synergies gained by combining refining and chemical production...