Global Environment By the Knight-Lee Marketers


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Global Environment By the Knight-Lee Marketers

  1. 1. Global Environment By the Knight-Lee Marketers
  2. 2. Presentation Outline <ul><li>Background </li></ul><ul><ul><li>Industry Characteristics </li></ul></ul><ul><ul><li>Company History </li></ul></ul><ul><ul><li>Company Overview </li></ul></ul><ul><li>Article Summary </li></ul><ul><li>Where ExxonMobil Went Wrong </li></ul><ul><li>Competitors </li></ul><ul><li>Problem Resolution </li></ul><ul><li>Marketing Implications </li></ul><ul><li>Overview </li></ul>
  3. 3. Background <ul><li>Industry Characteristics: Oil & Gas </li></ul><ul><li>Operating expenses are relatively fixed </li></ul><ul><li>Oriented towards the production of gasoline </li></ul><ul><li>Location of an oil refinery has an important impact </li></ul><ul><li>Low competition? </li></ul><ul><li>Poor environmental practices </li></ul>
  4. 4. Background <ul><li>Company History </li></ul><ul><ul><li>Exxon and Mobil were descendants of the John D. Rockefeller corporation, Standard Oil which was established in 1870 </li></ul></ul><ul><ul><li>Formed in 1999 by the merger of two major oil companies, Exxon and Mobil. </li></ul></ul><ul><ul><li>2000, ExxonMobil sold a refinery in Benicia, California and 340 Exxon-branded stations to Valero Energy Corporation, as part of an FTC-mandated divestiture of California assets </li></ul></ul><ul><ul><li>2005 - ExxonMobil's stock price surged in parallel with rising oil prices, surpassing General Electric as the largest corporation in the world in terms of market capitalization. </li></ul></ul>
  5. 5. Background <ul><li>Company Overview </li></ul><ul><li>Organizational structure built on international business </li></ul><ul><ul><li>Goal to continuously achieve superior financial and operating results while adhering to the highest standards of business conduct. </li></ul></ul><ul><li>A multi-national American corporation </li></ul><ul><li>Headquarters located in Irving, Texas </li></ul>
  6. 6. Background <ul><li>Company Overview </li></ul><ul><li>Largest publicly traded integrated petroleum and natural gas company in the world </li></ul><ul><ul><li>Largest company revenue: $377.6 billion </li></ul></ul><ul><ul><li>Largest of the six biggest oil companies </li></ul></ul><ul><ul><li>Markets its products around the world as Exxon, Mobil & Esso. </li></ul></ul>
  7. 7. Background <ul><li>Company Overview </li></ul><ul><li>4 Operating Divisions: </li></ul><ul><ul><li>Upstream (oil exploration, extraction, shipping) </li></ul></ul><ul><ul><li>Downstream (marketing, refining) </li></ul></ul><ul><ul><li>Chemical </li></ul></ul><ul><ul><li>Global Services (Information technology, support centers) </li></ul></ul>
  8. 8. Article Summary <ul><li>ExxonMobil posted the largest profit in the history of corporate America in 2005, earning a profit of $36 billion. ExxonMobil lobbies Congress in support of drilling in the Arctic Refuge, funds organizations to confuse the public about global warming, and is still battling settlements of those who lost everything in the Valdez oil spill. </li></ul>
  9. 9. Where ExxonMobil Went Wrong… <ul><li>ExxonMobil is the only major oil company that is a member of Arctic Power. </li></ul><ul><ul><li>Arctic Power is a special interest group that supports drilling in the North Arctic, but neglects to inform the public on </li></ul></ul><ul><ul><li>important environmental </li></ul></ul><ul><ul><li>issues. </li></ul></ul>
  10. 10. Where ExxonMobil Went Wrong… <ul><li>Opposed Kyoto Protocol, the global-warming treaty, and stressed uncertainties in climate science. </li></ul><ul><ul><li>Stabilizing greenhouse gas </li></ul></ul><ul><ul><li>concentrations in the </li></ul></ul><ul><ul><li>atmosphere at a level that </li></ul></ul><ul><ul><li>would prevent dangerous </li></ul></ul><ul><ul><li>anthropogenic interference </li></ul></ul><ul><ul><li>with the climate system. </li></ul></ul>
  11. 11. Advocacy Organizations <ul><li>Exxpose Exxon Coalition is the nation’s largest environmental and public interest advocacy organizations. </li></ul><ul><li>“ Toast the Earth” </li></ul><ul><ul><li>http:// /movie </li></ul></ul>
  12. 12. Exxon Competitors
  13. 13. 2004 Plan to Outpace the Competition. <ul><li>Introduced by Rex Tillerson (Chairman and CEO of Exxon Mobil) </li></ul><ul><li>11 Billion invested in New Potential World Class Projects </li></ul><ul><li>Including two Plants in Qatar, the Fujian Refining project in China and the Jose Chemical Project in Venezuela </li></ul><ul><li>A Focus on Liquefied Natural Gas (LNG) </li></ul>
  14. 14. Exxon Mobil V.S. Royal Dutch Shell <ul><li>World’s largest non state- owned oil corporation </li></ul><ul><li>Estimated 35,000 Service Stations </li></ul><ul><li>13.6 Billion Barrels in Reserve </li></ul><ul><li>2006 Sales Growth – 1.9% </li></ul><ul><li>2 nd largest non state-owned oil corporation </li></ul><ul><li>Estimated 45,000 Service Stations </li></ul><ul><li>11.8 Billion Barrels in Reserve </li></ul><ul><li>2006 Sales Growth – 1.8% </li></ul>
  15. 15. State-Owned Competition <ul><li>Saudi Armco </li></ul><ul><li>Owned by Saudi Arabia </li></ul><ul><li>World’s # 1 Oil Producer </li></ul><ul><li>Supplies 10% of World’s Oil Demand </li></ul><ul><li>Dates back to 1933 </li></ul>
  16. 16. Exxon Mobil V.S. Saudi Aramco <ul><li>World’s # 1 integrated oil corporation </li></ul><ul><li>Produces 6.4 million barrels per day </li></ul><ul><li>13.6 Billion Barrels in Reserve </li></ul><ul><li>World’s # 1 oil producer </li></ul><ul><li>Produces 8.9 million barrels per day </li></ul><ul><li>259.9 Billion Barrels in Reserve </li></ul>
  17. 17. How has Exxon’s Plan Faired? <ul><li>“ It's not necessarily the oil standard, but Exxon Mobil is the world's largest integrated oil company (ahead of BP and Royal Dutch Shell ). Exxon Mobil engages in oil and gas exploration, production, supply, transportation, and marketing worldwide.” – </li></ul><ul><li>Provides fuel to 700 airports and more than 200 ports </li></ul><ul><li>40 refineries in 20 countries and service stations in over 100 countries </li></ul>
  18. 18. Problem Resolution <ul><li>After reading about what ExxonMobil isn’t doing… </li></ul><ul><li>We decided to focus on what ExxonMobil is doing… </li></ul>
  19. 19. Problem Resolution <ul><li>ExxonMobil is an OIL Company… whether we try to fight global warming or not WE still use and need oil. </li></ul><ul><li>As of 2007; ExxonMobil is: </li></ul>
  20. 20. Problem Resolution <ul><li>Still donating over $100 million towards a Climate Change Program at Stanford University </li></ul><ul><li>Their scientists have written over 40 reports on global warming to help fight it. </li></ul><ul><li>CO2 Emissions savings in the past 8 years have saved 11 million metric tons or over 2 million cars off the road. </li></ul><ul><li>They donate millions to foundations to save animals as well as now partnering up with auto manufacturers to help on fuel economy. </li></ul><ul><li>They have also stopped funding many groups such as the Global Climate Coalition. (groups that think global warming is a lie by the government) </li></ul>
  21. 21. Marketing Implications What does this mean in the eyes of International marketers?
  22. 22. … Marketing Implications <ul><li>Adaptation vs. Standardization </li></ul><ul><li>Ethnocentrism: </li></ul><ul><li>- ExxonMobil's approach to their business operations. </li></ul><ul><ul><li>- They believed their culture was superior. </li></ul></ul>
  23. 23. Exxon Should Have Done….. <ul><li>Global Market Research & Analysis: </li></ul><ul><ul><li>They need to understand global and local economic and environmental factors that are affected by their business. </li></ul></ul><ul><li>Entry: Marketing & Advertising: </li></ul><ul><ul><li>Concentrate on World/geo-centric issues. </li></ul></ul><ul><ul><li>Concentrate on regio-centic demands. </li></ul></ul><ul><ul><li>Use profits to increase research instead of decreasing consumer understanding. </li></ul></ul><ul><ul><li>Generate “favorable publicity” </li></ul></ul><ul><li>Global Localization: </li></ul><ul><ul><li>Needed to Stress “Think globally, act locally”. </li></ul></ul>
  24. 24. Exxon Should Have Done….. <ul><li>Marketing Goals: </li></ul><ul><ul><li>Increase customer lifetime value (CLV) </li></ul></ul><ul><ul><li>Maximize Profits and demand </li></ul></ul><ul><li>Create Competitive Advantage: </li></ul><ul><ul><li>Generate favorable publicity </li></ul></ul><ul><ul><li>Localize their pricing strategy </li></ul></ul>
  25. 25. Overview <ul><li>Background </li></ul><ul><ul><li>-Industry Characteristics </li></ul></ul><ul><ul><ul><ul><ul><li>-Company History </li></ul></ul></ul></ul></ul><ul><ul><li>-Company Overview </li></ul></ul><ul><li>Article Summary </li></ul><ul><li>Where ExxonMobil Went Wrong </li></ul><ul><li>Advocacy Organizations </li></ul><ul><li>Competitors </li></ul><ul><li>Problem Resolution </li></ul><ul><li>Marketing Implications </li></ul>
  26. 26. Questions, Comments, Feedback?? ?