PESTEL Analysis of Exxon Mobil
Exxon Mobil Corporation is a multinational American oil and gas company with its headquarters in Spring Texas. It is one of the most prominent marketers and refiners of petroleum products. The PESTEL is a strategic analysis tool that helps analyze the macro business environment of different organizations like Exxon. It includes several important political, economic, social, technological, environmental, and legal factors. These factors greatly impact the business performance and operation of the organization. Let’s read the PESTEL analysis of Exxon Mobil.
Organizations like Exxon Mobil operate in the integrated oil and gas sector. Changes in the PESTEL factors can impact it. They may affect the organization’s ability to compete in its industry. In addition to competitive companies, PESTEL analysis gives valuable data about current challenges that Exxon Mobil will experience in this macro environment. For instance, if an industry has a strong trajectory and high profitability, the organization won’t benefit if the industry is located in a volatile political environment.
Political Factors Affecting Exxon Mobil
The factors that can completely destroy Exxon Mobil’s long-term profitability in a particular market or nation are heavily influenced by political factors. The organization engages in integrated oil and gas operations across several nations, exposing it to various environmental and political risks. Identifying the potential political risks in the integrated oil and gas sector is important. Before entering a market or making a huge investment there, the organization can thoroughly examine the given factors:
- Political stability and the country’s economy’s significance of the Major Integrated Oil and Gas sector.
- The threat of an invasion by force.
- Levels of regulation, particularly in the Basic Materials segment, are particularly corrupt.
- Office politics and meddling in Major Integrated Oil.
- Governing body of law for contract implementation.
- Safeguarding of intellectual property.
- Trade laws.
- Favored business associates.
- Antitrust regulations pertaining to the Major Integrated Oil sector.
- Are there any pricing regulations for Basic Materials?
- Taxation: tax incentives and rates.
- Legislation governing wages, including minimum wage and overtime.
- Workweek restrictions in the Major Integrated Oil sector.
- Employee perks are required.
- The Basic Materials sector has industrial safety regulations.
- Major Integrated Oil has requirements for product labeling and other things.
Economic Factors Affecting Exxon Mobil | PESTEL analysis of Exxon Mobi
The overall demand for goods and services as well as total investment in an economy are determined by macro-environmental factors like foreign exchange rates, inflation rates, interest rates, and saving rates. The firm’s competitive advantage is impacted by micro-environmental factors like competition standards. Exxon Mobil Corporation can use economic indicators specific to an industry, such as Major Integrated Oil, as well as global economic indicators like inflation and growth rate. Exxon Mobil should take into account the given economic factors when performing a PESTEL analysis:
- What kind of economic system exists in the countries where Exxon Mobil operates and how solid is it?
- Government meddling in the market and associated Basic Materials sector.
- Exchange rates and the stability of the currency of the host nation.
- Does Exxon Mobil need to raise capital on the domestic level given the efficiency of the financial markets?
- Major Integrated Oil’s infrastructure worth.
- Proportional gains of the host nation and its basic materials sector.
- Workforce expertise in Major Integrated Oil.
- Economic education level.
- The economy’s productivity and labor costs.
- What is the business cycle stage such as richness, recession, and reclamation?
- Economic growth rate.
- Unrestricted income.
- Unemployment rate.
- Inflation rate.
- Interest rates.
Social Factors Affecting Exxon Mobil
The way of life and culture of a society have an impact on the culture of a firm in a setting. When Exxon Mobil Corporation marketers try to understand a market’s customers and create a marketing message for consumers in the Major Integrated Oil and Gas segment, shared approaches and opinions of the populace are major factors. For this PESTEL analysis, Exxon Mobil leadership should consider the following social factors:
- Population characteristics and skill level.
- In society, there is a system of power, hierarchy, and class.
- Education standard and level in the sector served by Exxon Mobil Corporation.
- Culture (social norms, gender roles, etc.).
- The more inclusive nature of society and the entrepreneurial spirit. While some societies support entrepreneurship, others do not.
- Mentalities (environmental awareness, etc.).
- Interests in leisure.
Technological Factors Affecting Exxon Mobil | PESTEL analysis of Exxon Mobi
Numerous industries are being rapidly disrupted by technology. A good example to demonstrate this idea is the transportation sector. The industry has changed drastically over the past five years, with established players not even given a chance to adapt. Lyft and Uber are currently the dominant players in the taxi industry. Technology companies like Google are driving the automation of the automotive industry, and Tesla, which has declared an electric vehicle revolution, is toppling manufacturing. An organization should analyze the industry’s technological landscape and the rate at which it is being disrupted by technology. While rapid technological change may give a company little time to adapt and be lucrative, slow change will give more time. Understanding the aforementioned effects of technology is important:
- New technological advancements made by rivals of Exxon Mobil Corporation.
- Impact of technology on product offerings.
- Impact on the major integrated oil and gas industry’s cost structure.
- Impact on the basic materials sector’s value chain structure.
- Diffusion of technology.
Environmental Factors Affecting Exxon Mobil
Different markets and nations have various standards or environmental standards, which can have an effect on an organization’s profitability. States frequently have different liability and environmental laws even within a single nation. Florida and Texas, for instance, have dissimilar liability sections in the event of environmental disasters or accidents. Likewise, many European nations offer substantial tax breaks to businesses engaged in the renewable energy segment. The company should carefully assess the environmental standards needed to operate in those markets before entering new ones or opening a new operation in an existing one. The following are a few environmental factors an organization ought to think about in advance:
- Climate change.
- Laws that control pollution of the environment.
- Laws governing the major integrated oil and gas industry’s water and air pollution.
- Sector of basic materials waste management.
- Opinions of “green” or environmentally friendly products.
- Threatened species.
- The opinions of and support for renewable energy.
Legal Factors Affecting Exxon Mobil | PESTEL analysis of Exxon Mobi
Numerous nations lack a strong enough legal system and institutional foundation to safeguard a firm’s intellectual property rights. Before entering such nations and markets, a company should carefully consider its options because doing so risks having its competitive power. When entering various nations or markets, Exxon Mobil leadership should take a number of legal considerations into account:
- Anti-trust laws in the oil and gas sector.
- Discrimination laws.
- Copyright, patents/intellectual property rights.
- E-commerce and consumer protection.
- Labor legislation.
- The law concerning health and safety.
- Data security.
The Bottom Line | PESTEL analysis of Exxon Mobi
In conclusion, the PESTEL analysis of Exxon Mobil Corporation spotlights the different factors that have an impact on its financial operation and performance. This knowledge aids in determining the importance of outer business aspects for any organization like Exxon Mobil Corporation.
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