1. Management in the oil and Gas industry
Exxon-mobil
Management in the oil and Gas industry
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2. Assessing the impact: competition
New Companies Entering the Market
Mergers
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.
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.
Generally, refining is a lengthy and stable business. There are relatively few new companies that can afford the costs associated with entering into the industry, such as the high costs of equipment (in some cases, more than a million dollars for one truck), and the necessity for a highly specialized workforce in some areas. Breaking into the oil/gas industry also requires large amounts of capital, as profit is not made overnight. Due to these things, the impact of new companies entering the market is a minimal threat (Investopedia, 2004).
In a study that measured the impact of mergers and acquisitions in the Nigerian oil/gas market, data revealed mergers had significant positive effect on profit after tax and on net assets. The profit after tax improved significantly, as did net assets, following a successful merger (Abdul, 2014). The 1999 Exxon-Mobil merger is an example of such a profitable merger.

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.
Globalization impacts the oil and gas industry in several ways. Like other companies, globalization means increased access to things like supplies, products, and consumers. It also means increased exploration in places like Africa’s west coast and Southeast Asia as reserves are continually discovered farther from the traditional places in the Middle East or the North Sea. Companies have also discovered that it is more efficient to establish IT infrastructure in drilling and other locations, in order to facilitate sharing of information and communication (Watkins, 2012).
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.
Although demand is relatively high, the oil and gas market is relatively inelastic. Large increases in upstream investment do not necessarily equal balanced increases in supply. When higher prices and increased demand fail to bring forth the required capacity, in large part because suppliers are unable or unwilling to meet the demands, production is said to be inelastic. Likewise, demand is inelastic. “If demand is inelastic, changes in price initially do very little to change consumer buying habits. Lower prices do not encourage much more consumption. On the other hand, consumers are willing to pay higher prices (up to a point) to keep on buying what they need” (Cooke, 2007).
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).
Sustainability is impacted by the 3 Ps—People, Planet, and Profit. Each comes with potential risks, such as community disagreements (ex: Middle East or Africa), climate change, or safety risks.
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.
Oil and gas prices fluctuate minute by minute, generally due to supply and demand factors. While demand remains relatively stable, supply can impact pricing drastically when “supply shocks” occur. Examples of supply shocks that impact pricing are when OPEC meets to determine oil supply for the future period, or when a natural disaster such as a hurricane impedes delivery (Investopedia, 2004).
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
Anis, M. (2015). Issues impacting sustainability in the oil and gas industry. Journal of Management and Sustainability, 5(4). Retrieved from
Cooke, R. (2007, March 22). The elasticity of oil production and consumption. Retrieved from
Investopedia. (2004, January 07). The industry handbook: The oil services industry. Retrieved from
Watkins, R. (2012, July 24). Trends in the oil and gas industry - the impact of globalization and cloud-based services. Retrieved from