Case Study Assignment: ExxonMobil Environmental Analysis (Case Study Sample)

Name
Course
EXXONMOBIL ENVIRONMENTAL ANALYSIS
Introduction
ExxonMobil is one of the prevalent oil and energy corporation in the world with operations in multiple countries around the globe. As an oil and energy company, ExxonMobil has to take into consideration many factors that mold and modify their business model. ExxonMobil adopts a business model that focuses on excelling in their day to day operations, creating a lasting shareholder value and producing higher cash flow. The application of their business model has offered them competitive advantages that will sustain the company now and in the future. The internal and external factors that impact their business model play a key role in their success in the oil and energy sector. ExxonMobil puts more emphasis on these factors to create a business model that will maintain their advantages and introduce new growth opportunities. The external factors that impact ExxonMobil’s business model include environmental concerns, technology advancement, increase in demand and the competitive market. These external factors influence the strategic plans, organization’s capabilities and behavior that will lead to stronger results and new growth opportunities.
1 Environmental Threats and Safety Risk
Regarding the environmental threats and safety risks to people posed by energy corporations, they are required to put effort to ensure safety and social responsibility. Activities on social responsibility and safety are taken into consideration in ExxonMobil business model not only to ensure its survival but also superior results. The concerns on environment require changes and strategic plans that will need a great deal of commitment from the management and employees CITATION Kim02 \l 1033 (Kim & Mauborgne, 2002). The activities involved in oil and energy companies pose a lot of risks and threats to the environment and human beings. The use of the value based approach to develop ethical capabilities in the organization is an effective approach CITATION Car06 \l 1033 (Cardy & Selvarajan, 2006). ExxonMobil has placed strategic plans that ensure safe and environmentally responsible operations. The management and employees are dedicated to ensuring crises, and incidents do not occur at the expense of the environment. Major oil and energy companies such as BP have put strategies of producing different types of new renewable energy to curb the issue of environmental threats. ExxonMobil, however, has initiated a strategic plan that follows the Blue Ocean model; they have bet on natural gas by acquiring a natural gas company, unlike other corporations. ExxonMobil predicts that 20 years from now oil will still lead as the world’s energy but natural gas will make up 25 percent of world’s energy CITATION Wei17 \l 1033 (Wei, 2017). Natural gas releases less carbon dioxide than oil and hence is the alternative to dealing with the environmental threats of oil. ExxonMobil has also initiated the Outlook for Energy project that strives to ensure the world gets reliable and affordable energy while reducing the risk and threats to the environment and climate CITATION Wei17 \l 1033 (Wei, 2017). They are backing up research in renewable energy from cellulosic and algae biofuels as alternatives which are in fact beneficial to the environment.
The threats and risks have been of major concern and have provoked a lot of individuals who are advocates for climate change. The criticism lies in the fact that oil and energy company’s’ emission of carbon dioxide increases gradually as the demand for energy grows. ExxonMobil has had its equal share of criticism from global warming advocates and laws of social responsibilities. The strategic plans and behavior of the company towards venturing into alternative sources of energy is an effort at ensuring a safe and healthy world with new opportunities to arise. ExxonMobil has a wide range of systems that address aspects such as environmental performance, safety, ethics, energy efficiency and project investment. The systems have been arrayed in the business model to ensure superior results and new growth opportunities.
2 Technological Advancement
ExxonMobil invests heavily in technology for the future as part of their strategic plans. The oil and gas industry is a high-tech industry that needs constant innovations in technology to meet the increasing demand for energy while extenuating emissions. Innovation pushes the industry, and the core of innovation involves identifying ideas in the environment and combining them CITATION Dav15 \l 1033 (Davila, Oyon, Parmigiani, & Schnegg, 2015). The energy corporations such as ExxonMobil use the latest technology for their operations and activities while continuing to research and develop new ideas. When an organization is unsuccessful in noticing changes, it progresses slower than the environment which challenges its survival in the industry, incorporating innovations guarantees its survival CITATION Dav15 \l 1033 (Davila, Oyon, Parmigiani, & Schnegg, 2015). According to sources, there are a vast amount of oil and reservoirs in the world, but there are challenges in extracting them due to technological shortcomings CITATION Ros13 \l 1033 (Rosenbaum, 2013). ExxonMobil incorporates in its strategic plans technological advancements and research for the future to be able to provide energy from these reservoirs in the decades to come.
ExxonMobil has had several technological developments in the recent years. They have made improvements in the transportation sector such as the use of their energy saving plastics to make vehicles lighter and improving the inner linings of tires. They have also managed to develop lubricants with a lower viscosity such as the Advanced Fuel Economy which will advance the fuel economy significantly. ExxonMobil has also developed new separator film for their lithium-ion batteries which will improve the efficiency of battery powered vehicles in the future. Corporations are revitalizing various sectors in the industry by focusing on top notch technology and innovations (Hitt & He, 2008). ExxonMobil is investing in further research to advance the future use of hydrogen fuel in industrial application through new conversion techniques. They also have programs such as the Global Climate and Energy project to continue research and develop new technologies. The business model ExxonMobil is incorporating in these strategies correlates with the Blue Ocean Model as they have made unique innovations in technology to create a new market in the industry. ExxonMobil strives to invest in technological advancement in the energy industry for better results in the future which will bring new growth opportunities.
3 Demand increase
The global energy demand is estimated to increase significantly in the next 15 years. With the high demand, the oil and gas companies will have to find solutions to meet the energy requirement. Natural gas is considered the fastest growing energy source with the growing demand for cleaner fuels CITATION Gon11 \l 1033 (Gonzalez, 2011). ExxonMobil has taken measures in their industry to ensure the future high demand for liquefied natural gas and refined products are met. They have made developments by acquiring a natural gas company that will meet the future demand. ExxonMobil also has made changes in their chemical company to counter the increasing demand for refined products in countries such as China. ExxonMobil has somewhat incorporated Porter’s Forces to enter the natural gas business; their entry has placed a threat to the smaller natural gas companies and will eventually dominate. Their comprehensive knowledge of the world energy markets will enable them to capitalize the value of natural gas fully. ExxonMobil’s innovations and investments in various sectors of the energy industry to meet the demand guarantees future opportunities and success.
4 Competitive market
ExxonMobil operates in oil, chemicals, and natural gas, and in each of the industries, there are major competitors especially in the oil industry. Competition is a major factor in incorporating strategic plans in the organization’s operations. Competitive advantage is driven by core capabilities of an organization; the capabilities allow it to distinguish its products from its competitors and offering higher value products CITATION Rot15 \l 1033 (Rothaermel, 2016). ExxonMobil strives to make its products slightly distinct from products from other companies and also has a chemical segment superior over its peers. They have invested in the future production of natural gas and...