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Exxon- mobil

Exxon- mobil. Management in the oil and Gas industry. Name Course #/ Name Instructor Date. Assessing the impact: competition. New Companies Entering the Market. Mergers. Study of mergers revealed significant positive effect: increase in profit after tax increase in net assets

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Exxon- mobil

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  1. Exxon-mobil Management in the oil and Gas industry Name Course #/ Name Instructor Date

  2. Assessing the impact: competition New Companies Entering the Market Mergers Study of mergers revealed significant positive effect: increase in profit after tax increase in net assets Consensus: Mergers and acquisitions can bring about significant improvement on the performance of a company. Stiff barriers to entry • Cost of equipment • Highly specialized workforce • Necessity for ample cash flow Consensus: Very few new companies can afford to break into the oil/gas industry, and as such, the impact of new entrants is minimal.

  3. Assessing the impact: globalization Many variables in the oil/gas industry • Increased access to supplies, products, and consumers • Increased exploration in new areas, as new reserves are discovered • Placement of IT infrastructure worldwide to increase efficiency Response: In response to globalization, Exxon Mobil should continue its work of exploration in new territories, especially domestic, and maximize efficiency infrastructures in each of its global locations.

  4. Assessing the impact: price elasticity of demand Elasticity of Demand relatively inelastic: • Large increases in upstream investment do not produce concurrent increases in supply • Takes years to develop a new oil field • Many potentials can delay production • Political obstacles • Cultural disruptions • Weather • Geographical challenges Response: Exxon Mobil should respond to this impact by increasing oil prices, as higher prices encourage producers to increase production, by increasing marginal profits.

  5. Assessing the impact: sustainability Affects oil/gas industry in three key ways: • Economic • Environmental • Social • Also known as the 3 Ps—People, Planet, and Profit Risks include • climate change, safety risks, and community disagreements Response: Exxon Mobil must adapt and ensure that these risks are mitigated in various ways, such as through insurance, routine equipment maintenance, and making efforts to protect the environment (Anis, 2015).

  6. Assessing the impact: price elasticity of demand Frequent price fluctuation due to supply and demand • Demand does not generally fluctuate too much • “Supply shocks” impact pricing Example: when OPEC meets to determine oil supply, or when natural disaster impedes delivery Response: Exxon Mobil should respond to these impacts by advance preparation in the areas of energy, transport, and agriculture, both for short and long-term shocks.

  7. references Abdul, A. (2014). Impact of mergers and acquisitions on performance of companies in oil and gas industry. European Journal of Business and Management,6(32). Retrieved from http://www.iiste.org/Journals/index.php/EJBM/article/view/16870 Anis, M. (2015). Issues impacting sustainability in the oil and gas industry. Journal of Management and Sustainability,5(4). Retrieved from http://www.ccsenet.org/journal/index.php/jms/article/view/52516 Cooke, R. (2007, March 22). The elasticity of oil production and consumption. Retrieved from http://www.resilience.org/stories/2007-03-22/elasticity-oil-production-and-consumption Investopedia. (2004, January 07). The industry handbook: The oil services industry. Retrieved from http://www.investopedia.com/features/industryhandbook/oil_services.asp Watkins, R. (2012, July 24). Trends in the oil and gas industry - the impact of globalization and cloud-based services. Retrieved from http://insider.altairhyperworks.com/challenges-and-opportunities-in-the-oil-gas-industry/

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