Business Analysis Part I
A fund manager, according to Investigated (2012), is in charge of executing a fund investing plan and supervising it portfolio trading behaviors. In this paper I will act as the mutual fund manager conducting a SOOT analysis for Complexion. Based on the information gained from this analysis I will examine the parts that are most relevant to the decision of investing in Complexion or not investing. This paper will also identify the internal and external stakeholders.
If Exxon Mobil is fulfilling the stakeholders needs or not fulfilling the needs, and what the Exxon Mobil needs to do o make sure the needs are met. SOOT is an acronym for the internal strengths and weaknesses of a firm and the external opportunity and threats that firms face. SOOT analysis is a useful tool that managers use to develop an overview of a company strategic condition. The SOOT analysis offers information that assist in matching the firms’ assets and competences to the competitive surroundings in which it operates.
Therefore, a SOOT analysis is an important part to the strategic planning process. About Complexion Over 125 years Complexion has changed from a local vendor of kerosene in the U. S. O the largest openly traded petroleum and petrochemical venture in the world. Today Complexion conduct business in most of the world’s countries and are best known by their familiar brand names: Exxon, Sees and Mobil (Complexion, 2012). Complexion produce the products that run modern transportation, power cities, lubricate industry and provide petrochemical building blocks that lead to thousands of consumer goods.
Snowmobiles organizational structure is based on an idea of global businesses and is made to permit Complexion to participate successfully in the constant changing and challenging wide-reaching energy industry. According to Commoner (2012), Complexion is ranked number one by Fortune 500. Complexion SOOT analysts The SOOT analysis revealed that Exxon strengths are in a leading market position this is a good because it sets the standard for others in the industry. A diversified revenue stream is important to investors because by investing in different types of investments an investor can protect their assets.
If one investment goes down the other investment may go up. Constant financial performance and a strong research and development department is what investors are looking for. Exxon Mobil annual income statement, the company’s revenues increased in 2011 to 486. 43 billion from 383. 22 billion in 2010. Complexion net income increased in 2011 to 41. 06 billion in 2011 from 30. 46 billion in 2010 (Yachts 2012). Research development (R) is the heart of an industry, with the constant changing market a good R gives the company a competitive edge.
The role of the R is to develop new products and develop new knowledge about technological topics to discover and facilitate creation of new products, processes and services. Therefore, having a good R department is essential to a company’s competitive edge. Exxon MODEM weaknesses are clanging net losses production Ana 011 reserves, legal proceedings and high indebtedness (Exxon Mobil Corporation SOOT Analysis, 2012). Declining net liquids production and oil reserves are of concern to an investor this can have damaging effect on revenue growth rate. Legal proceedings are a concern for investor.
Exxon involved in various lawsuits, claims, and legal proceedings arising out of the conduct of its business. Some of these legal proceedings and claims seek damages, fines, or penalties in substantial amounts or the use of remedial methods o improve skills or reverse environmental damage. Investors should be concerned about the legal proceedings that can have a negative effect on the brand and profitability. Exxon Mobil high indebtedness is a cause for worry for an investor. Exxon Mobil has been observing high indebtedness since (PAYOFF SOOT Analysis. 2012).
High financial obligations also limit the company’s elasticity in planning, and in reacting to changes in business and industry. Thus, an investor should be concerned with weaknesses that can have negative effect on ability to plan for future changes business brand, profitability, and revenue. Opportunities for Exxon Mobil include demand for shale gas, rising global energy demand and strategic cooperation with Rosiest (Complexion Corporation, 2012). Shale gas is a natural gas that is within shale formation; shale are thin grained rocks that can be plentiful supply of petroleum and natural gas (geology. Mom, 2012). Shale gas has become popular by 2010 it grew 20 times since 2006 Rising global energy demand is expected to grow in the future with the growing world’s population. Complexion continues to expand and diversify their resource base, promote efficiency, and develop new energy technologies. Rosiest and Exxon Mobil entered into a strategic cooperation agreement under which the companies planned to undertake Joint exploration and development of hydrocarbon resources in Russia, the US, and other countries throughout the world, and commence technology and expertise sharing activities.
Exxon is in a good position to leverage the increasing demand for shale gas in the United States and future market penetration in others countries. The rise in demand offers the company the opportunity to capitalize on the market and increase profits. The strategic corporation with Rosette’s gives Exxon the chance to take advantage of Rosette’s technology to help them with future growth in revenues. Therefore, opportunities for Exxon Mobil look good from an investor’s perspective, because of the chance to increase revenues, increase profits and market penetration.
Exxon Mobil threats include an economic slowdown in the United States, risks in relation to doing business outside of the United States and environmental regulations. Economic conditions like the demand for energy and petrochemical is closely related to economic growth rates. The recession and low or negative economic growth will have an unfavorable influence on Exxon Mobil results. Risks in doing business outside of the United States, the company has exploration and production attraction in 33 countries. Many of the regions are susceptible to political volatility.
If Exxon Mobiles is unable to foresee these events or the lack of ability to alleviate risks in the regions where the company is doing business could critically weaken their operation and interrupt the flow of output. Environmental regulations the company is prone to regulations with regards to the protection of the environment. I en result AT a variety AT regulations, Walt n Exxon Model’s Duskiness’s measure are taken to prevent and minimize the effect of the company’s operations on air, water, and ground. These regulations will require additional expenses and may limit the company’s flexibility and business strategies.
Therefore, this is a concern for an investor because of the negative effect on the company’s finances, operations, and planned strategies. Internal and external stakeholders “Complexion internal stakeholders are shareholders, and employees. The Company’s external stakeholders are communities, nongovernmental organizations MONGO), customers, government, and supplier. Exxon Mobil meets the needs of their shareholder by enhancing the long term value investments dollars. They meet their employees need by hiring and retaining the most quality people to train and develop for capitalization on their opportunities.
Needs are met to communities and MONGO and by practicing good corporate citizens where ever they do business. Transparency is good for the customer and company the customer wants transparency so they can ensure they get what they want and need from a company. This allows customer to take proactive measure if something is not going right. The benefits of companies that are transparent allow them to be better equipped to assure the needs and wants of the customers in an efficient way and create a loyal customer.
In addition, the information that is provided also helps the company’s R&D and marketing, to assist them learning how to make better products or services. Complexion rank seventh among the ten assessed corporations for their transparency capabilities with a score of only 18 percent” (Complexion Corporation, 2012). Most companies have a fear of transparency because they did not want their customer to receive them differently from how the company wants to be seen. However, transparency is good for business because it enables the company to get the Job done the right way.
Therefore, Exxon Mobil should increase transparency because it will have a positive effect on the business operations by increasing customer satisfaction. In conclusion, Exxon Mobil is ranked number one in Fortune 500 their strengths include leading the market, diversified revenue, and a good financial performance continually. They weaknesses include declining net liquids production and oil serves, legal proceedings and high indebtedness. This is a concern for investor because it can have an adverse effect on capacity to plan for future changes, business brand, profitability, and revenue.
Exxon Mobil prospects consist of demand for shale gas, rising global energy demand and strategic cooperation. The potentials Exxon Mobil have for the future can increase revenues, increase profits and market penetration. The company threat includes, economic slowdown, risk of doing business in other countries, and environment regulations. The can have a harmful effect on the company’s finances, operations, and planned strategies. In addition, transparency is an issue for the company if they increase transparency it can have positive effect on the company.
Thus, if Exxon can eliminate or minimize their risk and increase transparency the company has a chance to remain the top in the industry and be a good investment opportunity for those that want shares in the company. Reticence Commoner. (2012). Our annual ranking of America’s largest corporation. Fortune 500 Retrieved on September 20, 2012, from http://money. CNN. Com/ Complexion. (2012). Complexion Taking on the world’s toughest energy challenges. Retrieved September 19. 2012, from HTTPS://www. Mom/corporate/default. Asps Complexion Corporation. (2012). One World Trust. Retrieved on September 19, 2012, http:// www. Neurologists. Org/publications/doc_view/84-2006-gar-accountability-profile- complexion? Temp=component=raw geology. Com (2012) News and Information about Geology. Retrieve on September 21 , 2012 from http://geology. Com/ Yachts . (2012). Exxon Mobil Corporation Income Statement. Retrieved September 20, 2012 http://yachts. Com/media/main/images/logo xx. 550c451 added. Pang