Using appropriate strategic models, critically diagnose and analyse the external environment facing Exxon Mobil in the development of its Strategy. Exxon Mobil $($hereafter just called Exxon$)$ Corporation is one of the world's largest oil and gas companies, with operations in more than $100$ countries. The company has faced increasing pressure from investors, regulators, and environmentalists to address the risks and opportunities of the energy transition, which is the shift from fossil fuels to low$-$carbon sources of energy. On one level, the energy transition represents an existential crisis for the company as its core revenue drivers begin to mature and even decline in importance. The IEA $($International Energy Agency$)$ estimates that to reach $`$ net zero$$ by $2050$ oil consumption will have to fall by $75$ per cent. It is expected that low$-$cost producers mainly in OPEC and Russia would meet the bulk of this demand with the rest fighting for scraps. The hope for Exxon is that the IEA is wrong and that demand for Oil holds up more than currently predicted. Indeed, OPEC estimates that the demand for oil will actually rise by $15$ per cent by $2045.$ This will be fueled by both a slower energy transition and a rapidly rising middle class.

Nonetheless, Exxon$$s response to the energy transition has been to invest $$3$ billion in low$-$emission technologies over the next five years, such as carbon capture and storage, hydrogen, and biofuels. The company has also pledged to reduce its greenhouse gas emissions intensity by $15-20\%$ by $2025,$ compared to $2016$ levels. ExxonMobil has been taking steps to address the energy transition by emphasizing a few key areas:

$1.$ Reducing Emissions: Exxon has committed to reducing greenhouse gas emissions associated with its operations. They have set goals to decrease emissions intensity, aiming for a significant reduction in their carbon footprint.

$2.$ Investing in Carbon Capture and Storage $($CCS$)$: They're exploring and investing in CCS technologies to capture and store carbon dioxide emissions, preventing them from entering the atmosphere. Exxon sees this as a crucial aspect of their strategy to lower emissions.

$3.$ Diversifying Energy Portfolio: Exxon is looking beyond traditional oil and gas. They're investing in renewable energy sources like wind and solar, as well as exploring technologies related to biofuels, hydrogen, and advanced batteries. These investments aim to diversify their energy portfolio and align with a more sustainable future.

$4.$ Research and Development: Exxon continues to heavily invest in research and development $($R&D$)$ to advance technologies that can facilitate the energy transition. This includes exploring more efficient extraction methods, improving energy storage solutions, and developing cleaner energy alternatives.

$5.$ Partnerships and Collaborations: They've formed partnerships and collaborations with research institutions, other energy companies, and technology innovators to accelerate the development and deployment of sustainable energy solutions.

However, some critics have argued that Exxon's actions are not enough to align with the goals of the Paris Agreement, which aims to limit global warming to well below $2\backslash$deg C above pre$-$industrial levels. They have also questioned Exxon's continued focus on expanding its oil and gas production, which accounts for more than $90\%$ of its capital spending. Exxon has defended its strategy by stating that oil and gas will remain essential for meeting global energy demand for decades to come, and that it is committed to providing affordable and reliable energy while reducing its environmental impact. This reflects that Exxon views that hydrocarbons are here to stay and is seeking to continue with oil extraction but seeking to mitigate the effects of its extraction and consumption. Consequently, ExxonMobil has an explicit strategy of investing to raise production if the oil price and forecast profits are high enough.

The belief by Exxon on the longevity and resilience of demand for oil was reflected in its $2023$ $ $60$ bn acquisition of the US oil shale producer Pioneer. This seeks to promote consolidation within the sector in the belief that not only is the IEA incorrect about the rate of decline in demand but $-$ even if it is correct $-$ as demand falls Exxon will be $`$last producer standing$.$ The aim is for the firm to have both scale but also the necessary reserves to alter output depending on demand. This reflects the position that Exxon seeks to double its production of shale oil from US fields. The acquisition doubles Exxon$$s US output at a stroke making it the main US producer. The increased investment in oil and gas in an era of the energy transition reflects the very uncertain environment within which strategy by oil majors is being formed. This stresses a focus upon building scale as a defensive strategy for these businesses who will seek to counter any reduction in demand with increased efficiency in production. Whilst deman