Exxon Mobile Corporation is one of the biggest public limited corporation of energy provides across the globe, also deals in manufacturing chemicals, applies and develop next-generation technologies for heling responsibly and safely the growing needs of the world in terms of energy and chemical products. The company is committed to be the premier petroleum and the chemical manufacturing company across the globe and works hard to achieve the superior operating and financial results while adhere the high ethical rules and standards. It continuously put its efforts in achieving the objective and so needs to compete with the other giants in the market. It needs to have its and industry’s analysis, and hence, Porter’s five forces analysis helps in determining the competition level of the industry (Exxon Mobile, 2019).
Bargaining Power of Buyers
Buyers are demanding, as they require good quality in lowest prices possible. This pressurizes the Exxon Mobil Corporation to reduce the prices which effects the profitability level in the long run. The powerful and smaller the customer base, higher will be the bargaining power they have, and less beneficial for the Exxon Mobil Corporation. The Exxon Mobile focuses on building the larger consumer base, as it reduces the bargaining power of the buyers and will provide more opportunities for streamlining the production and sales process. Bringing new products in the market means more discounts and offerings which will limit the bargaining power of consumers (Blueocean, 2019).
Bargaining Power of Suppliers
There are numerous suppliers in the oil and gas industry, and almost all the companies buy their raw materials from them. If suppliers are in the dominant position, margins would be decreases for the Exxon Mobil Corporation. Strong suppliers use their skills and position in the basic material sector for extracting the higher prices, thus lowering the overall profitability level for the company. Exxon Mobil Corporation builds the efficient supply chain network with numerous suppliers for the same products. It also experiments different product designs and require different materials, which will help it during the time of increase in the prices (Wikiwealth, 2019).
Threats of New Entrants
There are new entrants in the major integrated gas and oil industry, which brings innovation and different ways of doing businesses that pressurizes the Exxon Mobil Corporation by reducing the prices, costs, and add value proposition for the consumers. For Exxon Mobile Corporation, it is necessary to manage the challenges and develop effective barriers for safeguarding the competitive edge. By innovating the new products, customer base for the Exxon Mobile increases. It also focuses on building the economies of scale for lowering the fixed cost. It also works in building the capacities and invest more in the research and development, to define the standards regularly (Fernfort, 2019).
Threats from the Substitute Products
Threats from the substitute products are not high because of the limited number of substitutes available in the industry. Exxon Mobile Corporation tackles this situation by adding more value in the products, so that customers will not switch to substitute products. It increases the switching cost, for retaining the consumers. Exxon Mobil understand the need of the consumers and then design the products, rather than producing what it wants to sell. It tries to be more services oriented than the product oriented (Wikiwealth, 2019).
Rivalry of Existing Players
There is always a rivalry in the industry, and if the competition level s intense, then the prices will be reduced and thus the profitability level will be decline in the industry. The Exxon Mobil Corporation works in the Major integrated gas and oil industry where competition is tough, and its long-term profitability level suffers. To handle the situation, Exxon Mobil make sure to have product differentiation, and have large scale operation to compete better with others. It tries to collaborate with the rivals to increase the market share and size and reducing the rivals from the industry (Fernfort university, 2019).
References
Blue ocean, 2019. Exxon Mobil Porter Five (5) Forces Analysis. [Online], Available at: http://blueoceanuniversity.com/frontpage/portercoanalysis/7679-exxon-mobil, [Accessed on: 14th April, 2019].
Exxon Mobile Corporation, 2019. Who we are? [Online], Available at: https://corporate.exxonmobil.com/company/who-we-are, [Accessed on: 14th April, 2019].
Fernfort university, 2019. Exxon Mobil Corporation Porter Five Forces Analysis. [Online], Available at: http://fernfortuniversity.com/term-papers/porter5/analysis/541-exxon-mobil-corporation.php, [Accessed on: 14th April, 2019].
Wiki Wealth, 2019. Exxon Mobil – Five Forces Analysis. [Online], Available at: http://www.wikiwealth.com/five-forces:exxon-mobil, [Accessed on: 14th April, 2019].