Exxon Mobil's current corporate strategy relies on developing new emerging markets using their strong market position and broad portfolio. Their organizational structure is based on strategic business units for downstream, upstream, natural gas/power, and chemicals. Financial analysis shows good liquidity, activity, profitability, and leverage ratios, though revenue has decreased recently. Stock analysis graphs show Exxon Mobil performing similarly to competitors Chevron and BP over the past year and longer term.

1. Jamin Echols
Final
December 9, 2014
Strategic Management
I. DIAGNOSIS
A. Mission: Exxon Mobil has no clear vision or mission statement but the company
has a statement of guiding principles: Exxon Mobil Corporation is committed to
being the world’s premier petroleum and petrochemical company. To that end, we
must continuously achieve superior financial and operating results while
simultaneously adhering to high ethical standards (David 534).
B. Objectives: Exxon Mobil’s objectives are to increase their productivity and
profitability in order to become the driving force in both the petroleum and the
petrochemical industry.
C. Corporate Strategy: Exxon Mobil’s current corporate strategy is reliant on their
ability to develop in the new emerging markets by using their strong market
position and by using their broad portfolio to stay profitable despite the volatile
nature of the prices within the industry.
D. Policies
1. Diversity: Their Global Diversity Framework is the foundation for their long-
term, career-oriented approach to employment, and has three interrelated
objectives: attract, develop and retain a premier, diverse workforce; actively
foster a productive work environment where individual and cultural

2. differences are respected and valued; and identify and develop leadership
capabilities to excel in a global environment. We use a series of Web-based
trainings and tools to support this framework and help their employees
understand effective cross-cultural communication and cultural sensitivities
(Employment Practices and Policies).
2. Ethical Standards/code of Conduct: The policy of Exxon Mobil Corporation is
to comply with all governmental laws, rules, and regulations applicable to its
business. It also chooses the course of highest integrity. Local customs,
traditions, and mores differ from place to place, and this must be recognized.
But honesty is not subject to criticism in any culture (Code of Ethics and
Business Conduct).
3. Suppliers: Directors, officers, and employees should deal fairly with each
other and with the Corporation's suppliers, customers, competitors, and other
third parties. Also they are expected to avoid actual or apparent conflict in
dealings with suppliers, customers, competitors, and other third parties
(Standards of Business Conduct).
4. HR: Their policies are related to the ethical standards and are required by the
company to be an accessible channel of communication for the employees
depending on the subject of the question, concern or suggestion (Standards of
Business Conduct).
E. Strategic Managers and Board

3. 1. Sr. Level Executives: There is a large number of Sr. level executives under
William Colton, the VP of Strategic Planning so I will focus on the Sr. level
executives under the CEO and Chairman of the Board Rex Tillerson.
(David 536)
2. Corporate governance
a. Responsibilities
1) amendment of the By-Laws,
2) filling vacancies on the Board and designation of nominees for
election to the Board by the shareholders,
3) establishment of committees of the Board and appointment of
committee members,
4) election of officers of the Corporation, designation of the chief
executive officer of the Corporation and authorization to any
officer of the Corporation to appoint assistant officers,
5) establishment of divisions of the Corporation and appointment
of the presidents thereof,
6) remuneration of the Directors,
7) setting the date, time and place of shareholder meetings,
8) submission to shareholders of any action that requires
shareholder approval,

4. 9) approval of the Annual Report and proxy statement,
10) appointment of independent auditors by the Audit Committee,
subject to shareholder ratification and receiving of auditors'
reports,
11) declaration of dividends,
12) issuance and acquisition of long-term debt or shares of stock,
and the fixing of the consideration for treasury shares to be
disposed of by the Corporation, except as delegated to the
Treasurer as described in B.7 below,
13) registration and listing of securities and appointment of transfer
agents and registrars,
14) review of summary financial and operating results (quarterly),
15) adoption of any new major employee benefit plans and
programs and approval of any major amendment of an existing
major employee benefit plan or program (e.g., Pension Plan
and Savings Plan) which might involve substantial cost to the
Corporation or significantly alter the scope, nature or degree of
benefits,
16) review of overall policies and objectives for corporate
contributions, and approval of contributions budget (annually),
17) authorization of political contributions and political action
committees, except as delegated to officers of the Corporation
as described in B.11 below,

5. 18) adoption of such policies and the taking of such other actions
as the Board deems to be in the best interests of the
Corporation
(Powers of the Board)
b. Board Committees: The Board will appoint from among its members
committees it determines are necessary or appropriate to conduct its
business. Currently, the standing committees of the Board are the
Executive Committee, Audit Committee, Board Affairs Committee (which
serves as the nominating and corporate governance committee),
Compensation Committee, Finance Committee, and Public Issues and
Contributions Committee (Corporate Governance Guidelines).
c. Director Compensation: At this time, the Board believes it is appropriate
and efficient for ExxonMobil's Chief Executive Officer (CEO) also to
serve as Chairman of the Board. However, the Board retains the authority
to separate those functions if it deems such action appropriate in the future.
So at least annually, the independent directors will, in conjunction with the
Compensation Committee, review the performance of the CEO in light of
the Corporation's goals and objectives (Corporate Governance Guidelines).
F. Generic Industry Type
1. The industry of Global Oil & Gas Exploration & Production is maturing with
the growth of emerging economies
2. Industry Economic Characteristics

6. Industry definition Industry operators explore for, develop and operate oil and gas fields.
This industry includes the production of crude petroleum, the mining
and extraction of oil from oil shale and oil sands, the production of
natural gas, sulfur recovery from natural gas and the recovery of
hydrocarbon liquids. Transport, refining and marketing activities are
excluded from this industry (About this Industry Global Oil & Gas
Exploration & Production).
Market size and growth
rate
The market size is large with a yearly demand of $4,562,700.0 just for
the year 2014 and the industry revenue is forecast to grow at an
annualized rate of 4.3% to $5.6 trillion (Industry Outlook Global Oil
& Gas Exploration & Production).
Key rivals & market
share
These are the key rivals and market share for the global market in the
industry

7. (Major Companies Global Oil & Gas Exploration & Production).
While this is the US version if the key players and market share for
this industry.
(Major Companies Petroleum Refining).
As one can see Exxon Mobil has a large amount of the American
market share, and a acceptable amount of the global market share.
This is what makes them such a large, successful and viable company.
Scope of competitive
rivalry
The Global Oil and Gas Exploration and Production industry is subject
to a high level of competition. In general, the industry faces
competition on two levels: internal and external. Internal competition
regards competitive factors common to all or most companies within
the industry, while external competition represents threats based in
other industries, substitute products or from imports such as biodiesel,
ethanol, solar and wind power, and coal depending on what oil and gas
is being used for. The internal competition is based mainly off of price
between firms even though other factors, such as crude oil grades,
impurity levels and the costs of extraction are also important
(Competitive Landscape Global Oil & Gas Exploration & Production).

8. Concentration vs.
fragmentation
The industry is rather fragmented as seen by the market share; no one
company has a substantially large amount of the market and due to the
highly competitive nature of the market. A large change in these
numbers does not seem likely (Competitive Landscape Global Oil &
Gas Exploration & Production).
Also because the global scale of production creates the opportunity for
many small companies to dilute the market, industry concentration is
low (Competitive Landscape Global Oil & Gas Exploration &
Production).
Number of buyers The number of buyers is large and belongs to these four key markets:
petroleum refiners, the industrial sector, electricity generators and
natural gas distributors. Since the use of natural gas is diverse, and has
a range of activities there is a large number of buyers (Products &
Markets Global Oil & Gas Exploration & Production).
Demand determinants The demand determinants are oil and natural gas (Products & Markets
Global Oil & Gas Exploration & Production).
Oil demand depends on global economic growth related to demand for
goods and services. While the demand for natural gas is less closely
linked to economic performance than the demand for oil. Because
natural gas functions largely as a heating course, seasonality and
geography play a hand in determining demand (Products & Markets

9. Global Oil & Gas Exploration & Production).
Degree of product
differentiation
The degree of differentiation in this market is extremely low since
methods that produce the gas and oil used by buyers is essentially the
same across firms. Due to this is causes the market to be highly
competitive.
Product innovation Product innovation for this product is also low; however there have
been innovations that threaten the life cycle of this industry, such as
biodiesel and alternative fuels.
Key success factors The key success factors for the firms in this industry are:
The ability to accommodate environmental
requirements: Environmental protection is a key issue in the
development of oil and gas resources.
The ability to find new resource deposits: In order to continue
producing oil and gas, companies must either uncover new fields, or
acquire those discovered by other operators.
The ability to comply with government regulations: Companies
may shift exploration and production efforts if the regulatory

10. framework is either unattractive or lacks certainty.
The ability to have license: Oil and gas producers are required to
obtain licenses for both exploration and production activities.
Downstream ownership links: Ownership links with major oil
refining and marketing companies provide a ready market for oil
production.
Output is sold under contract - incorporate long-term sales
contracts: For gas producers in particular, long-term contracts are a
pre-requisite for survival in a volatile market. Generally, sales
contracts need to be in place to ensure a new project proceeds.
(Competitive Landscape Global Oil & Gas Exploration & Production)
Supply/demand
conditions
As mentioned before, demand for oil depends on global economic
growth related to demand for goods and services. While the demand
for natural gas is less closely linked to economic performance than the
demand for oil. Because natural gas functions largely as a heating
course, seasonality and geography play a hand in determining demand.
Supply is closely related to this demand and producers are willing to
produce as much as possible, however the problem lies within the
possibility of running out of natural resources.

11. Analysis of stage in life
cycle
The industry is in a maturity do to the fact that industry output is
expected to lag the global economy's GDP, technological change in
this industry tends to be incremental, and merger activity is ongoing
(Industry Outlook Global Oil & Gas Exploration & Production).
Pace of technological
change
The pace of technological change is only moderate for the oil segment
but robust within the natural gas segment. Changes tend to involve
matters of scale and scope rather than fundamental shifts in
production, which is indicative of a mature industry. For example,
offshore oil platforms are larger and able to be sited in deeper water
than in the past, but operations have remained essentially unchanged.
Also, shale fracturing for natural gas has recently unleashed significant
potential for previously unreachable reserves. Improvements in
liquefied natural gas production facilities and in the ships used to
transport the product are playing a role in promoting the growth of the
fuel (Operating Conditions Global Oil & Gas Exploration &
Production).
Vertical integration Mergers are occurring within the industry; however vertical
integration is less frequent. Possibly due to the fact that there is a small
need for it.

12. Economies of scale The economies of scale in this industry are largely beneficial in
helping corporations produce a cost advantage with increased output
of oil and gas.
Learning/experience
curve effects
Those who have been successful in this market know the methods of
extraction that produce the most results already so there is a slight
learning curve/experience effect.
Barriers to entry There are high barriers to entry protect the Global Oil and Gas
Exploration and Production industry Specific deterrents for
newcomers include the high levels of competition, regulation and
capital intensity. These barriers are projected to remain high through
the coming five years.
Regulation/deregulatio
n
The Global Oil and Gas Exploration and Production industry is highly
regulated, with various tiers of government being involved in all
stages of production. Typically, governments determine which areas
are open to oil exploration and extraction, issue exploration and
production leases and enforce environmental legislation. Regulatory
bodies typically enforce environmental regulation relating to the
production and transport of oil and gas, while others patrol adherence

13. to health and safety regulations. Some governments, notably the
United States, maintain petroleum reserves for strategic and national
security purposes. The United States established its Strategic
Petroleum Reserve in 1977 in response to upheaval in the Middle East.
The purpose of the reserve is to provide a stock of oil that can be
drawn down in the event of a major upheaval in the market (Operating
Conditions Global Oil & Gas Exploration & Production).
Globalization The industry exhibits a high degree of globalization. International
trade is extremely important to the industry, with about 50.0% of oil
output and about 30.0% of gas output traded internationally (Products
& Markets Global Oil & Gas Exploration & Production).
Trends Entrance into emerging economies
An increase in mergers and acquisitions
G. Organization Structure:
1. Exxon Mobil has an SBU organizational structure based off of their
downstream, upstream, natural gas and power marketing, and chemical
operations (David 534). Downstream means the refining and distribution of
products that are derived from crude oil to customers around the world.
Upstream means the exploration for and capture all resource types, across all
geological and geographical environments, using industry-leading technology
and capabilities. Using their unique geoscience capabilities and
understanding of the global hydrocarbon endowment to identify and prioritize

14. all quality resources. Chemical is all their petrochemical processes that
provides the building blocks for a wide range of products, from packaging
materials and plastic bottles to automobile bumpers, synthetic rubber,
solvents and countless consumer goods. Their natural gas and power
marketing uses their natural gases to market off those utilizing it to generate
power and other uses such as heating and so on.
2. Advantages and Disadvantages
a. The advantages of this are:
1) That it provides a strategically relevant way to organize the business-
unit portfolio of this broadly diverse company
2) It facilitates the coordination of related activities within an SBU
helping it capture the benefits of strategic fits and resource fits among
related businesses
3) It promotes more cohesiveness and collaboration among separate but
related businesses
4) It allows strategic planning to be done at the most relevant level
within the total enterprise
5) It makes the task of strategic review by top executives more objective
and effective
6) It helps allocate corporate resources to areas with greatest growth and
profit opportunities
7) And group VP position is a good training ground for future CEOs
b. The disadvantages of this are:

15. 1) It’s easy for the definition and grouping of businesses into SBUs to
just be for administration convenience
2) The SBUs can still be narrow-minded in charting their future
direction
3) It adds another layer to top management
4) The roles and authority of the CEO, group VP and BU manager have
to be carefully worked out otherwise the VP has an ill-defined
authority
5) The collaboration and coordination between SBUs is unlikely to occur
6) Performance recognition gets blurred
H. Financial Analysis / Altman & DuPont
1. Liquidity, Activity, Profitability and Leverage ratios
a. Liquidity ratios
1) Current Ratio=.8269
2) Quick Ratio=.527
b. Activity ratios
1) Debt Ratio=.063
2) Long-Term Debt=22.7 Billion
3) Equity Ratio=.1305
4) Earning-Times Interest=.26
c. Profitability ratios
1) Asset Turnover=1.26
2) Inventory Turnover=24.96

16. 3) Accounts Receivable Turnover=16.8
d. Leverage ratios
1) Gross Profit Margin=33.39%
2) Operating Profit Margin=11.23%
3) Pretax Profit Margin=13.1%
4) Net Profit Margin= 8.73%
5) ROE=19.55%
6) ROA= 7.87%
2. Altman for Exxon Mobil is 3.8084
3. Tobin’s Q for Exxon Mobil is 1.321
4. DuPont Analysis is 19.46%
5. Financials obtained from Yahoo! Finance income statement, balance sheet,
and cash flow.
6. Exxon Mobil has had great financial performance, despite the decrease in their
revenues as of the past few years. However, even though they are still doing
well, they should turn around the decrease in revenue.
I. Stock Analysis: one year and Max Graph from Yahoo. Finance including: major
competitors.
One Year graph with Competitors Chevron Corp. (Darker Blue) and BP (Red)
(XOM Interactive Chart).

17. Max Graph with Competitors Chevron Corp. Chevron Corp. (Darker Blue) and
BP (Red) (XOM Interactive Chart).
Exxon Mobil’s 1 year graph (XOM Interactive Chart).

18. Exxon Mobil’s Max Graph (XOM Interactive Chart).
BP’s 1 year graph (BP Interactive Chart).
BP Max Graph (BP Interactive Chart).
Chevron Corp 1 year graph (CVX Interactive Chart).

19. Chevron Corp Max Graph (CVX Interactive Chart).
As seen by all the graphs, obtained from Yahoo! Finance, Exxon Mobil clearly
out performs their competitors in terms of estimated value.
J. SWOT Analysis
1. Internal (strengths, weaknesses)
Strengths Weaknesses
Strong market position
Strong research and development
capabilities
Diversified geographic revenue
stream
Litigations and contingencies
Declining financial performance
a. Strengths

20. 1) Strong market position: What this means is that Exxon Mobil has
presence in almost every aspect of the energy and petrochemical
industry. With presence in most of the world countries and across
every aspect of the industry including the following: downstream,
upstream, chemicals, and natural gas and power marketing
activities. They involved across the entire value chain. This allows
them to take advantage of emerging growth opportunities around
the world. Also their broad portfolio allows them to mitigate risks
in the volatile market environment and maximize their profitability
through changing business cycles (Exxon Mobil Corporation 29).
2) Strong research and development capabilities: What this means is
that Exxon Mobil has great R&D capabilities. The company
conducts research and develops new products, develops existing
one and improves current operations through this department. Also
they not only progress operationally but also technologically,
keeping up with new and more efficient was of gaining oil and
natural gas (Exxon Mobil Corporation 30).
3) Diversified geographic revenue stream: Exxon Mobil has a
presence across various regions, this allows for them to have
competitive advantage and indicates that the company has a wider
ability to increase its revenues, allows due to their large presence
worldwide they can whether economic conditions that take place in

21. geographic locations without having a large decrease in their
revenue stream (Exxon Mobil Corporation 30).
b. Weaknesses
1) Litigations and contingencies: The company is involved in various
lawsuits proceeding the conduct of their business. These lawsuits
will adversely affect the company’s brand image as well as the
reduce profitability (Exxon Mobil Corporation 31).
2) Declining financial performance: The recent years there has been a
decrease in revenues, 6.8 % decrease in 2013 and a 26.7% decrease
in operating profit and a net incline profit of 27.4%. If this
continues the company could be looking at decreased cash flow
and a smaller company market presence (Exxon Mobil Corporation
31).
2. External (Opportunities, Threats)
Opportunities Threats
Rising global energy demand
Addition of new oil and gas projects
Growing chemical demand in Asia
Increasing demand of LNG globally
Environmental regulations
Economic conditions
Challenging Downstream industry
environment
a. Opportunities
1) Rising global energy demand: The energy demand in the market
has been growing as is expected to grow as population continues to
grow. Overall global energy is perceived to grow by 35%. As
economic progresses drives demand for energy higher, the levels

22. of energy consumption is also expected to get lower. In order to
meet demand, Exxon Mobil plans to start production on 10 major
projects which should add a new and larger capacity of oil barrels
(Exxon Mobil Corporation 32).
2) Addition of new oil and gas projects: Exxon Mobil is highly
focused on adding more room to increase business growth. They
are pursuing more than 120 projects to develop about 24 billion oil
equivalent barrels of oil and natural gas (Exxon Mobil Corporation
32).
3) Growing chemical demand in Asia: Exxon Mobil plans to pursue
investment opportunities to expand the chemical business and
other growth markets in Asia. By making strategic investments that
capture advantaged feedstocks, increase product sales, and employ
lower-cost processes. They recently completed a project that builds
on an integrated platform with advanced feedstock capability, and
produces products that meet the demands of growing Asian
economies. The project has been very successful and is the largest
chemical expansion in the company’s history. This growth can
continue for Exxon Mobil (Exxon Mobil Corporation 32).
4) Increasing demand of LNG globally: The global demand for LNG
(Liquefied natural gas) is anticipated to continue by 5% per year.
With this increase there is also an option for Exxon Mobil to

23. become more involved in this emerging market (Exxon Mobil
Corporation 33).
b. Threats
1) Environmental regulations: Exxon Mobil businesses are subject to
numerous laws and regulations in relation to protecting the
environment. For example the Clean Air Interstate Rule and other
greenhouse gas laws (Exxon Mobil Corporation 34).
2) Economic conditions: Economic conditions like the demand the
demand for energy correlates with the economic growth rates. In
light of recent recessions have had negative connotations to Exxon
Mobil’s profitability and the possibility of break downs in other
markets, such as Sovereign debt downgrades and the possible
restructuring of the European Union, could adversely affect the
company (Exxon Mobil Corporation 34).
3) Challenging Downstream industry environment: the downstream
industry has recently had weak margins and intense competition.
New policies and other climate-related regulations have negatively
impacted on the refining business. This in turn will pressure the
company’s earnings and margins (Exxon Mobil Corporation 33).
3. TOWS MATRIX
External Opportunities
1) Rising global
energy demand
2) Growing chemical
External Threats
1) Environmental
regulations
2) Economic

24. demand in Asia
3) Increasing demand
of LNG globally
4) Addition of new oil
and gas projects
conditions
3) Challenging
Downstream industry
environment
Internal Strengths
1) Strong market
position
2) Strong research and
development
capabilities
3) Diversified
geographic revenue
stream
SO: Using their strong
market position they
can take hold of all the
increasing demand in
emerging and existing
markets. As well as
build their diversified
revenue stream even
more with these
emerging demands.
Using their strong
research and
development
capabilities they can
create new methods to
take advantage of the
new oil and gas
products.
ST: Using their
diversified revenue
stream they can
whether a volatile
market and stay
profitable despite price
changes in the
industry. In regards to
the downstream
industry environment,
there is a lack of
demand in this portion
of the industry
however, by
liquidating their less
profitable assets could
allow for the assets to
be reallocated into the
rest of their broad
geographical portfolio.
Internal Weaknesses
1) Litigations and
contingencies
2) Declining financial
performance
WO: By turning
around the way they do
business in emerging
markets they can
rebuild their image that
was damaged in the
WT: By pulling out
their presence in the
countries that have a
tattered image, and
moving to a country
with fewer government

25. litigations and
contingencies, and also
by developing these
markets they could
turn around the decline
of financial
performance.
regulation they could
avoid most of their
weaknesses and
threats.
II. FOCAL POINTS FOR ACTION
A. Short Range
1. Supply and Demand: The oil, gas, and petrochemical businesses are
fundamentally commodity businesses. This means ExxonMobil’s operations
and earnings may be significantly affected by changes in oil, gas and
petrochemical prices and by changes in margins on refined products (EXXON
MOBIL CORPORATION FORM 10-K 2).
2. Economic conditions. The demand for energy and petrochemicals correlates
closely with general economic growth rates. The occurrence of recessions or
other periods of low or negative economic growth will typically have a direct
adverse impact on their results. Other factors that affect general economic
conditions in the world or in a major region, such as changes in population
growth rates, periods of civil unrest, government austerity programs, or
currency exchange rate fluctuations, can also impact the demand for energy
and petrochemicals (EXXON MOBIL CORPORATION FORM 10-K 2).

26. 3. Other demand-related factors. Other factors that may affect the demand for oil,
gas and petrochemicals, and therefore impact their results, include
technological improvements in energy efficiency; seasonal weather patterns,
which affect the demand for energy associated with heating and cooling;
increased competitiveness of alternative energy sources that have so far
generally not been competitive with oil and gas without the benefit of
government subsidies or mandates; and changes in technology or consumer
preferences that alter fuel choices, such as toward alternative fueled vehicles
(EXXON MOBIL CORPORATION FORM 10-K 2).
4. Other supply-related factors. Commodity prices and margins also vary
depending on a number of factors affecting supply (EXXON MOBIL
CORPORATION FORM 10-K 2).
B. Long Range
1. Access limitations. A number of countries limit access to their oil and gas
resources, or may place resources off-limits from development altogether
(EXXON MOBIL CORPORATION FORM 10-K 2).
2. Restrictions on doing business. As a U.S. company, ExxonMobil is subject to
laws prohibiting U.S. companies from doing business in certain countries, or
restricting the kind of business that may be conducted (EXXON MOBIL
CORPORATION FORM 10-K 2).
3. Lack of legal certainty. Some countries in which we do business lack well-
developed legal systems, or have not yet adopted clear regulatory frameworks

27. for oil and gas development (EXXON MOBIL CORPORATION FORM 10-K
2).
4. Regulatory and litigation risks. Even in countries with well-developed legal
systems where ExxonMobil does business, we remain exposed to changes in
law (including changes that result from international treaties and accords) that
could adversely affect their results, such as:
a. Increases in taxes
b. Price controls
c. Changes in environmental regulations (EXXON MOBIL
CORPORATION FORM 10-K 3)
5. Climate changes and greenhouse gas restrictions (EXXON MOBIL
CORPORATION FORM 10-K 3).
6. Exploration and development program: the ability to maintain and grow their
oil and gas production depends on the success of their exploration and
development efforts (EXXON MOBIL CORPORATION FORM 10-K 3).
7. Project management: The success of ExxonMobil’s Upstream, Downstream,
and Chemical businesses depends on complex, long-term, capital intensive
projects. These projects in turn require a high degree of project management
expertise to maximize efficiency. Specific factors that can affect the
performance of major projects include their ability to: negotiate successfully
with joint ventures, partners, governments, suppliers, customers, or others;
model and optimize reservoir performance; develop markets for project
outputs, whether through long-term contracts or the development of effective

28. spot markets; manage changes in operating conditions and costs, including
costs of third party equipment or services such as drilling rigs and shipping;
prevent, to the extent possible, and respond effectively to unforeseen technical
difficulties that could delay project startup or cause unscheduled project
downtime; and influence the performance of project operators where
ExxonMobil does not perform that role (EXXON MOBIL CORPORATION
FORM 10-K 3).
8. Research and development. To maintain their competitive position, especially
in light of the technological nature of their businesses and the need for
continuous efficiency improvement, ExxonMobil’s research and development
organizations must be successful and able to adapt to a changing market and
policy environment (EXXON MOBIL CORPORATION FORM 10-K 4).
III. DEVELOP ALTERNATIVES
A. In such a volatile market, market development seems to be the best option for
Exxon Mobil, growing while diversifying their portfolio even more to grow and
stay profitable. Also liquidation of some of the underperforming downstream
related acquisitions should allow them to put assets toward there more profitable
segments such as the upstream segment.
B. Boston Consulting Group Matrix
The following BCG matrix takes Exxon Mobil’s 3 segments and tells the viewer
what should be done with them due to their positions in the market.

29. C. Competitive Position-Exxon Mobil’s competitive position is they are a leader.
Due to their immensely productive R&D department, I believe that this
competitive advantage put Exxon Mobil ahead of its competitors in terms of
upstream related business and allow them lead the market in terms of determining
the best costs for products.
D. Competitive Strategy Options- Overall cost leader-ship would be the best
alternative for Exxon Mobil, in an industry where there is little product
differentiation and the buyers are extremely sensitive to price, this is the best
option to go with in terms of strategy.
E. Rumelts Criteria
1. In terms of consistency these four alternative strategies are quite similar and
maintain consistency with Exxon Mobil’s goals and policies. However the
liquidation strategy could cause organizational conflict.

30. 2. In terms of consonance there is a large amount of this needed for strategist to
stay on top of the research and development, the price inputs for natural gas
and petroleum crude oil as well as the development within the downstream
segment of the industry.
3. In terms of feasibility these are all feasible alternatives, however they are all
also very costly ones, however the high pay-off makes the strategy worthwhile.
4. The strategies all either utilize a competitive advantage or create a new one,
such as the ability to be a leader who can set the price in the industry
especially one as competitive and volatile as this one.
IV. DECISION AND RECOMMENDATION
A. Corporate: The best corporate strategy for Exxon Mobil to pursue is a merger
strategy; in the past Exxon Mobil’s mergers paid off significantly and contributed
to creating one of the largest petroleum and petrochemical companies. Also
mergers are intensifying in this market in order for companies to gain economies
of scale and produce at a lower cost. This could be a good corporate strategy for
Exxon Mobil.
B. Business: The best business strategy for Exxon Mobil is to pursue is market
development and development of their distinctive advantage, their research and
development department. By doing this they can take advantage of emerging
markets and keep them from their competitors. Therefore they could gain a
competitive advantage by utilizing their operations in other markets gaining
economies of scale and a larger presence. Also by utilizing their extremely
profitable r&d department they can keep their competitive advantage, maintain a

31. technological edge over their competitors and stay ahead of trends.
C. Functional: A marketing strategy would be the best strategy for Exxon Mobil do.
It would allow them to purposefully enter emerging markets and market off their
materials and products in a more effective manner.
D. Overall I would recommend the business level strategy, for two reasons. The first
reason is that a corporate level strategy would be extremely expensive and would
not pay off in the long run. The second reason is that a marketing strategy would
not utilize resources in the most effective manner. Now a business strategy that
pursues a market development and developing the R&D department which allows
for Exxon Mobil to takeover emerging markets and gain a competitive advantage,
maintain a technological edge over its competitors and stay ahead of the trends of
the industry as well as maximizes the market they’ve entered in.
V. IMPLEMENTATION
A. The person who should implement this strategy is the heads of the marketing
departments in each segment and the head of each R&D department. So this
means that A. J. Kelly, President of ExxonMobil Fuels, Lubricants & Specialties
Marketing Company and, T. J. Wojnar, Jr., President of ExxonMobil Research
and Engineering Company of the downstream segment as well as S. N. Ortwein,
President of ExxonMobil Upstream Research Company and, R. S. Franklin,
President of ExxonMobil Gas & Power Marketing Company in the upstream
segment should head the strategy’s implementation with consultation from W. M.
Colton the Vice President of Corporate Strategic Planning.

32. B. The strategy will gain organization wide commitment with a shift in the current
focus in projects in the marketing and research with incentives and compensation
for taking up these new projects. By making the new plan the employees’ goal,
they will become committed in seeing the plan succeed.
C. The structuring mechanism already exists within the SBUs and therefore they will
continue to exist after this policy is implemented.
D. There were no functional area conflicts between the Upstream and Downstream
SBUs so function area conflicts do need to be resolved in order for the strategy to
be implemented.
E. The leadership has the ability to turn around the company’s image by market
development with more sustainable projects that would utilize the external
opportunity of more LNG demand and the increase in Asian demand. SO they
could inspire even more commitment along with the commitment inspired
through new projects and incentives.
F. The incentive programs for working on the projects are basic compensation for a
job-well-done and increased recognition towards the company’s strategic success.
This allows for employees to be seen as possible candidates for promotion and is
more than appropriate for reinforcing good behavior.
G. The issues of decreasing brand image and downstream profitability are corrected
through this strategy, through more markets to generate revenue from and
increases in more sustainable projects in these new markets.
H. The strategy is implemented through projects that are handed down to and
explained by each level of management and a company-wide email will be sent

33. why the projects are happening; so it is communicated effectively.

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