Mobil North American Marketing and Refining: Kapil Pahwa

MOBIL NORTH AMERICAN
MARKETING AND REFINING

Kapil Pahwa
Background
2
World's largest publicly traded international oil and gas company.
Mobil North America Marketing and Refining (NAM&R), a multibillion-dollar

division of ExxonMobil
In 1998 Mobil and Exxon agreed on a merger to create ExxonMobil.
Mobil was among the largest sellers of gasoline and motor oils in the United
States
Profit of $39.5 billion in earnings last year, the largest-ever profit in U.S.
history
Need for a Balanced Scorecard
3
“Vision : To be the best integrated refiner-marketer in the United States by

efficiently delivering unprecedented value to customers”
Poor Financial Results
Unfocused Strategy
Drop in sales of oil and natural gas in first quarter 1995

Mobil’s Strategy
4
Market Research showed 60% of the market were willing to pay

significant price premiums for gasoline
Mobil made the crucial decision to adopt a "differentiated value

proposition”
Reconstruct from a centrally controlled manufacturer of commodity

products to a decentralized, customer-driven organization
Establish friendly stations outfitted with excellent convenience stores
Strategic Goal : Increase the return on capital by 6% in 3 years.

Implementation Plan
5
“Having trouble with your strategy? Then Map it”
Corporate executives review mission statement and core values

and develop a strategic vision.
Devise a strategy that defines how to arrive at the company’s goal.
Evaluate the strategy from four perspectives.
Business units use the strategy map developed to identify strategy

gaps and create their own detailed map for respective operations.
6
Financial Perspective
7
Improve Shareholder Value
Revenue Growth Productivity Growth

Strategy Strategy
Build the franchise Increase value to Improve cost structure Improve use of assets
customers
Financial Perspective
8
Increase Mobil’s Return on Capital Employed
Revenue Growth Productivity Growth

Strategy Strategy
Introduce new sources

of non gasoline Sell premium brands Become the industry
revenue through to increase customer cost leader in every Maximize the use of
expanded profitability supply chain category existing assets
convenience stores
• Revenue from • Sales volume • Mobil’s operating • Actual cash flow

nongasoline compared with the cost per gallon compared with the
products rest of the industry compared with the business plan
• Profit margin • Ratio of premium rest of the
products sold to industry
regular products sold
Customer Perspective
9
Financial Objectives
Operational Excellence Customer Intimacy Product Leadership

Product Leadership
Friendly, helpful workers

Clean ,safe, quality products
Customer Loyalty Win-Win Dealer Relationship
Speedy Purchase
Trusted Brand
• Share of targeted • Mystery Shopper • Dealer Profitability

Competitive Pricing
customer segments Rating • Dealer Satisfaction
Product Quality
On time Delivery
Customer Strategy
10
Complete customer
strategy
Motivates
Revenue growth for
independent dealers
Mobil's financial
to deliver a great
strategy
buying experience
Customers buy
Attract more
products and services
customers
at premium prices
Internal Process Perspective
11
Customer Objectives Financial Objectives
Increase customer
. Achieve operational
Improve
Build the franchise value through excellence through
environmental
through innovations customer management operations and logistics
health and safety
process processes
Internal Process Perspective
12
Customer Objectives Financial Objectives
Improve h/w
Create non-gasoline Understand Customer performance and
inventory Become a good
products and segments better and corporate citizen
services build best in class management, deliver
products on specs, on through regulatory
franchise teams and environmental
time and become
industry cost leader processes
• New product • Share of target • Refinery yield gap • Reduced number

acceptance rate market • Unplanned of environmental
• New product ROI • Dealer quality downtime and safety
rating • Inventory levels incidents
• Stockout rate
• Activity based
costs v/s the
Learning and Growth Perspective
13
Internal Process Goals
Employee Technology Corporate Structure

competencies
• Ratio of strategic • On time deployment • Personal balanced

skills to job of systems scorecard
coverage • Employee
feedback
Learning and Growth Perspective
14
Internal Process Goals
Promote functional
excellence, develop Adopts new Align business and
leadership skills, and technologies that aids personal goals
create an integrated process improvements
view of the company
among employees
• Ratio of strategic • On time deployment • Personal balanced

skills to job of systems scorecard
coverage • Employee
feedback
15
Results
16
Increased its return on capital employed from 6% to 16%
Sales growth exceeded the industry average by more than 2% annually
Mystery-shopper scores and dealer quality increased each year
Number of consumers using Speedpass grew by one million annually
Lost Oil-refinery yields due to systems downtime dropped by 70%

Employee awareness and commitment to the strategy more than
quadrupled
Operating cash flows increased by more than $1bn annually
Environmental and safety accidents plunged by about 63%

Key Take Aways
17
Effective communication across organization
Communication leads to innovation
A different customer intimacy strategy
Detection of major gaps
5 principles of Strategy Focused Organization

Employee Innovations: Mobil
Speedpass™
19
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MOBIL NORTH AMERICAN

MARKETING AND REFINING

World's largest publicly traded international oil and gas company.

Mobil North America Marketing and Refining (NAM&R), a multibillion-dollar

In 1998 Mobil and Exxon agreed on a merger to create ExxonMobil.

“Vision : To be the best integrated refiner-marketer in the United States by

Poor Financial Results

Drop in sales of oil and natural gas in first quarter 1995

Market Research showed 60% of the market were willing to pay

Mobil made the crucial decision to adopt a "differentiated value

Reconstruct from a centrally controlled manufacturer of commodity

Establish friendly stations outfitted with excellent convenience stores

Strategic Goal : Increase the return on capital by 6% in 3 years.

“Having trouble with your strategy? Then Map it”

Corporate executives review mission statement and core values

Devise a strategy that defines how to arrive at the company’s goal.

Evaluate the strategy from four perspectives.

Business units use the strategy map developed to identify strategy

Improve Shareholder Value

Revenue Growth Productivity Growth

Increase Mobil’s Return on Capital Employed

Revenue Growth Productivity Growth

Introduce new sources

• Revenue from • Sales volume • Mobil’s operating • Actual cash flow

Operational Excellence Customer Intimacy Product Leadership

Friendly, helpful workers

• Share of targeted • Mystery Shopper • Dealer Profitability

Customer Objectives Financial Objectives

Customer Objectives Financial Objectives

• New product • Share of target • Refinery yield gap • Reduced number

Internal Process Goals

Employee Technology Corporate Structure

• Ratio of strategic • On time deployment • Personal balanced

Internal Process Goals

• Ratio of strategic • On time deployment • Personal balanced

Increased its return on capital employed from 6% to 16%

Sales growth exceeded the industry average by more than 2% annually

Mystery-shopper scores and dealer quality increased each year

Number of consumers using Speedpass grew by one million annually

Lost Oil-refinery yields due to systems downtime dropped by 70%

Environmental and safety accidents plunged by about 63%

Effective communication across organization

Communication leads to innovation

A different customer intimacy strategy

Detection of major gaps

5 principles of Strategy Focused Organization

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