Exxon Mobil Resources and Capabilities

Topics: ExxonMobil, Mobil, Standard Oil Pages: 6 (1902 words) Published: October 2, 2008
Exxon Mobile is one of the most successful companies in the oil and energy industries today. But what makes them so successful? In an effort to answer this question, a thorough internal investigation can be helpful in determining what aspects of this company are making it an industry leader. Two aspects of this internal analysis of Exxon Mobile are the company’s resources and capabilities. Resources

One of the most reputable resources that Exxon Mobil has today is a strong brand name. Exxon Mobil operates all over the world and is recognized in every part of the world (Datamonitor, 2008). When people all over the world know who a company is, what they do, and where they are located, the company gains a unique competitive advantage over the rest of the industry. A good way to analyze this resource is to use the VRINE Model (Strategic Management, 2007). This breaks down in order to analyze its value, rarity, inimitability, and exploitability. For this resource I’ll start by assessing its value. The question that must be answered is, “does this resource allow the firm to meet market demand or protect the firm from market uncertainties?” (Strategic Management, 2007). In the case of the brand name resource, I believe that it gives them ample protection against uncertainty and enables them to compete, if not lead, in the industry. Exxon operates in over 200 countries around the world (Datamonitor, 2008) The fact that this company is present all over the world, and not many other industry competitors operate in so many different regions, proves that this particular resource is very valuable to the company. If a company can possess something that another company cannot, value is inevitably created for that resource. This resource also protects them from uncertainty because this brand is already established itself within the market and can thrive in it without too much concern about the well being of the company, thus limiting some uncertainty. Next in the VRINE model is assessment of its rarity. Do any other companies possess such worldwide recognition as Exxon Mobil’s brand name can bring? There are some companies that have come close in competing with Exxon Mobil, such as ConnocoPhillips and Chevron, but none can compare with the unique profitability and opportunities that the name Exxon can bring to a region. The name is undoubtedly trusted throughout the world and rarely rivaled. Those aspects of the brand name recognition make this brand name a rarity. The next step in the VRINE model is to assess the inimitability. To assess this, the question of can competitors “acquire the valuable and rare resource quickly, or will they face a cost disadvantage in doing so?” (Strategic Management, 2007). The simple fact that the Exxon Mobil name is trademarked and registered makes it impossible for any other company to replicate its name. Also it would cost a substantial amount to buy out the company and gain its name. This alone makes the brand name inimitable. Now assessment of the nonsubstitutability is needed. The question arises, “is there protection against ready substitutes?” (Strategic Management, 2007). For Exxon, their name reputation is one that substitutes have a very difficult time matching. Exxon is leading the industry and continues to be a leader of almost every aspect of the industry today. Though substitutes are present in the industry, none can surpass the reputation of Exxon Mobil. The final step in the VRINE Model is to assess the resource’s exploitability. The question to answer is, can the firm “ nurture and take advantage of the resources and capabilities that it possesses?” (Strategic Management, 2007). For Exxon, they can bring the company anywhere in the world and use the recognizable name to establish credibility and power in that region. This gives the company a considerable advantage when it comes to exploiting its brand name to establish the company around the world. After analyzing the resource...

Cited: (2007). ExxonMobil Summary Annual Report 2007. Retrieved September 18, 2008, from www.exxonmobil.com Web site: http://ir.exxonmobil.com/phoenix.zhtml?c=115024&p=irol-reportsAnnual
Carpenter, M. A. (2007). Strategic Management. Upper Saddle River, New Jersey: Pearson Education, Inc..
ExxonMobil Corporation Company Profile. (2008). SWOT Analysis. In Datamonitor [Web]. New York: Datamonitor. Retrieved 09/18/08, from www.datamonitor.com
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