Exxonmobile: Social Responsibility in a Commodity Market
ExxonMobile: Social Responsibility in a Commodity Market
Company Case 5
MKT 550
Chris Boisvenu
Introduction
This particular case deals with ExxonMobil and its social responsibility in a commodity market. ExxonMobil is the world’s largest publicly traded international oil and gas company. They hold an industry-leading inventory of global oil and gas resources. They are the world’s largest refiner and marketer of petroleum products (ExxonMobil, 2013). This case deals with the everyday struggle of raising gas prices and the toll it has on the average consumer. What is to cause for these raising gas prices one might ask. The case looks at the former CEO of ExxonMobil and his $400 million retirement package and also federal officials trying to take steps to stop the raising prices of gasoline. Several state attorney generals and the Bush administration also launched investigations to find out why gas prices were on a constant rise. In the end these investigations turned up no real results to price gouging.
So is it a simple idea of supply and demand that drives the prices up? The case first looks at demand. In the early 2000s oil was cheap and demand was around 70 million barrels a day, just eight years last it rose by 17 million. That’s an increase of 2.12 million barrels a year, so demand is defintually on the rise. What is the cause of this rise? Some experts say it’s the United States who continues to be one the world’s leading petroleum consumers. Others say it’s the developing needs of emerging economies, the two biggest contributors being China and India. Now what part does supply have to play? Supply constraints exist at a number of different levels. From production to drilling to refining and distributing. Such constraints place limits on various stages of the supply chain. For one refineries really don’t have the capacity to meet the demand for petroleum. The added constraints the government places on the gas companies don’t help
Company Case 5
MKT 550
Chris Boisvenu
Introduction
This particular case deals with ExxonMobil and its social responsibility in a commodity market. ExxonMobil is the world’s largest publicly traded international oil and gas company. They hold an industry-leading inventory of global oil and gas resources. They are the world’s largest refiner and marketer of petroleum products (ExxonMobil, 2013). This case deals with the everyday struggle of raising gas prices and the toll it has on the average consumer. What is to cause for these raising gas prices one might ask. The case looks at the former CEO of ExxonMobil and his $400 million retirement package and also federal officials trying to take steps to stop the raising prices of gasoline. Several state attorney generals and the Bush administration also launched investigations to find out why gas prices were on a constant rise. In the end these investigations turned up no real results to price gouging.
So is it a simple idea of supply and demand that drives the prices up? The case first looks at demand. In the early 2000s oil was cheap and demand was around 70 million barrels a day, just eight years last it rose by 17 million. That’s an increase of 2.12 million barrels a year, so demand is defintually on the rise. What is the cause of this rise? Some experts say it’s the United States who continues to be one the world’s leading petroleum consumers. Others say it’s the developing needs of emerging economies, the two biggest contributors being China and India. Now what part does supply have to play? Supply constraints exist at a number of different levels. From production to drilling to refining and distributing. Such constraints place limits on various stages of the supply chain. For one refineries really don’t have the capacity to meet the demand for petroleum. The added constraints the government places on the gas companies don’t help
References: ExxonMobil. (2013). About us – Who we are. Retrieved from http://www.exxonmobil.com/Corporate/about_who.aspx Levens, M. (2012). Marketing (2 ed.) Upper Saddle River, New Jersey: Pearson Education, Inc. GainMoneyControl. (2011). The Domino Effect of High Gas Prices. Retrieved from http://gainmoneycontrol.com/the-domino-effect-of-high-gas-prices/ Forbes, Randy. (2012). FAQs: Gas Prices. Retrieved from http://www.house.gov/forbes/newsroom/editorials/2008/gaspricesprimer.htm The Observer. (2008). Consumer social responsibility. Retrieved from http://www.ndsmcobserver.com/2.2756/consumer-social-responsibility-1.259690#.UeC46tKPPig