Is Apple the Most Valuable Company in the United States?
August 10, 2011
Since 2005, Exxon Mobil has held the top spot as the most valuable company in the United States. As the Associated Press reported, for the first time since 2005, Exxon Mobile was ousted from the top spot on August 9, 2011 when Apple surpassed Exxon Mobile as the most valuable U.S. company.
These two companies are close when it comes to being crowned the nation’s most valuable company, and considering that other companies have quite a gap to fill in order to catch up to Exxon Mobile and Apple, it can be assumed that the battle will continue between just these two powerful companies at least in the short term.
However, this activity brings some interesting considerations about the value of the Exxon Mobile and Apple brands as well as the products they offer.
Exxon Mobile is an oil company. Oil is a necessary evil to many consumers. Exxon Mobile makes a lot of money — earnings grew by 41% to $10.68 billion during the second quarter of 2011, and the company posted its biggest profit ever of $14.8 billion during the third quarter of 2008, when most consumers were struggling through a difficult recession. This is a company that provides a product people need. Many consumers don’t like that they need Exxon Mobile’s product, but their hands are tied. Furthermore, the brand’s perception is tarnished by the fact that consumers would prefer not to be dependent on Exxon Mobile’s product and the fact that the company is doing extremely well while individuals are struggling economically and the country is in massive debt. It’s hard to have a positive perception about a company like that.
On the other hand, as the Associated Press points out, Apple offers a product people want. The brand isn’t perfect and it has its detractors and gets a fair share of deserved negative publicity, but at the heart of the company is innovation. Apple develops products that people don’t need. However, they want Apple products and gladly pull out their hard-earned money to pay for them. As a result, the brand’s overall image is far more positive than negative as are consumer perceptions of the brand.
It’s interesting to see these two businesses with extremely different business models, products, and brand promises battle it out for the top spot as the most valuable company in the United States. It’s a battle many people will be watching. Will you? Which brand do you think will win? In the short-term? In the long-term? Leave a comment and share your thoughts.
Image: Alex E. Proimos
Eni : A Leader in CSR Websites
February 23, 2011
It’s not often I look at websites outside the UK … partially because it’s always difficult to mash CSR language through a translator, and partially because Corporate Eye’s core market is UK based.
However the Italian oil and gas supplier Eni has caught my eye several times. Their online reputation is, quite simply, massive.
Other Corporate Eye bloggers have written enthusiastically about their Corporate Governance and Investor Relations and the company’s CSR site regularly wins plaudits from Lundquist, an Italian website benchmark consultancy along the same lines as Corporate Eye.
Now the website has also come second in Lundquist’s online branding analysis for Italian companies (Pirelli came first).
So what is it about the six-legged, fire-breathing dog which makes them such a colossus in the online world, and why is their CSR site in particular such a hit?
Read more
Indicators for Oil & Gas CSR Websites
February 3, 2011
The GRI is in the process of finalising a supplement for the Oil & Gas industry.
Many of the participants in this (including serial website award winners Eni and BP) have also taken part in the IPIECA’s guidance for voluntary sustainability reporting, the last update to which came out in December 2010.
What follows is a summary of some of the indicators the guidance recommends and my comments upon them.
However, although these are aimed at the Oil and Gas industry they’re pertinent to many other industries.
Furthermore, as so much of the present economy is founded upon and driven by O&G products, it would do companies outside the industry no harm to have an awareness of these indicators and even discuss how they may be used when making product and supplier decisions.
Read more
Shell’s Scenarios and Risk Management
October 18, 2010
In a recent post I reviewed Black Swans and mentioned that I would have a posting about Shell Oil’s use of scenarios to identify future risks and opportunities.
First, what are scenarios?
Scenarios are pictures of possible futures facing an organization. They are developed via an amalgam of perceived trends and intelligence on possible actions of stakeholders. External factors such as economics, competition and market conditions are considered. Quantitative and qualitative tools such as econometrics/ statistical forecasts, Delphi technique, and surveys may be used. The results of all analyses are organized into comprehensive pictures of a number of possible futures. Shell pioneered this technique in the early 1970s and they still use it.
The Scenario page is nestled in the About Us/Strategy section. The main page offers much useful information — definitions, videos and a link to current scenarios — and great use of visuals and a slide-out menu of links to related information.
Access to scenarios in future decades is viewed by simply clicking on the year. In the upper right, see Blueprints: clicking on the + icons provides additional information about the scenario.
Deloitte (PDF) offer some useful advice on Scenarios and Corporate Governance –
Why do scenario planning?
The Risk Intelligent Enterprise utilizes risk information to influence strategic planning in three key ways:
- Risks are identified and analyzed when considering strategic alternatives and developing business/organizational strategy
- Risks of the strategy
- Risk appetite serves as a guidepost in setting strategy and allocating resources.
- Once business/organizational strategy has been selected, risks that might affect the organization’s ability to implement key strategies are identified and managed
- Risks to the strategy
Common risk management challenges include:
- Failure of modern risk management
- Information filtering
- Mental models
Desired results may include:
Better understanding of risk
- to the strategy
- of the strategy
Shared commitment and approach to:
- manage key risks to within risk appetite
- exploit risks where the organization has a strategic advantage
Want to know more? Here are some additional worthy resources–
The use and abuse of scenarios McKinsey Consultants
Why Scenarios? Global Business Network
Mixing Oil and Water
October 15, 2010
We all have a water footprint; some of us have larger ones than others. (You can assess your personal water footprint here)
Companies also have water footprints, and this will vary across sector: if you’re a services provider, then your footprint will inevitably be smaller than if you use water as part of your operational processes.
Increasingly companies are responding to public interest and awareness of water use by providing information about this on their corporate website.
Water and Responsibility
Some companies make no mention of their use of water at all, while others provide detailed information about their own use, and run CSR campaigns around water issues. Examples of water-oriented programmes include:
- water safety, e.g. the dangers of their reservoirs (Example: United Utilities)
- water leakage (Example: United Utilities)
- environmental conservation (Example: Coca-Cola)
- reduction of use (Examples: IHG plc and British Land)
- provision of clean drinking water (Examples: Proctor & Gamble and Siemens)
- disaster relief in response to flooding (e.g Nokia)
- Reed Elsevier offers a prize as part of their Environmental Challenge programme for innovative ideas to improve access to a safe and sustainable water supply.
There are many more water-oriented programmes, big and small, being run by large companies across the full range of water-related issues, but if you haven’t been to see the SABMiller pages on their Ten Priorities, then you should: look at the water priority page for an excellent example, not forgetting to check all the tabs.
Water and Business Risk
Water scarcity is a significant future risk, and one that is engaging the minds of governments and forward thinkers already. It is also a risk to business, particularly ones which are highly dependent on water operationally. Other water-related risks exist, such as risk of flooding, risk of water pollution and risk of damage to marine environments.
SABMiller have produced a report on water scarcity and business risk. Brewing is highly water-intensive, and so water plays a large part in their business, but water scarcity could be a risk to other businesses too.
Water and Reporting
Because of the highly publicised Gulf of Mexico spill of oil into water earlier this year, I thought it would be interesting to review a corporate site in the oil and gas sector, and see how they approach their water reporting.
I’ve chosen to explore BG Group, which finds, develops and connects natural gas to markets worldwide.
Helpfully, BG Group provide an explanation of how water is used in at least part of their business: to produce coal seam gas, they drill wells, and pump water out of the coal bed, freeing up the gas to flow out of the rock. This isn’t an obvious process to those of us who aren’t in the business, and so this is useful educational material.
BG Group and water: environmental risks
BG Group identify 5 potential environmental consequences of their business activities: 3 of these are water-related:
- the impact of wells, pipelines and other infrastructure on marine ecological habitats and biodiversity
- the release of hydrocarbons or chemicals into water
- use of scarce water resources or the production of excess waste water.
Although water scarcity isn’t explicitly stated as a business risk in the extensive set of risks provided in the Risk section of the online annual report, the risks of oil/chemical spills and damage to the environment are included. And water management has been identified as a material issue.
BG Group and water: environmental strategy
While the unconventional gas resources being developed may be able to reduce the overall greenhouse gas emissions, their production requires careful local environmental protection, including:
- the treatment and disposal or beneficial re-use of salt water produced by coal seam gas wells
- the management of the water used to fracture rock to release shale gas
- the hydro-geological effects of water abstraction and water injection, including the impact on local groundwater sources
BG Group are basing their water measures on UK, EU and US guidelines; their group-wide water management strategy should be available soon.
BG Group and water: operational explanation
BG Group explain that there are three different aspects to their water impact:
- Freshwater withdrawal, that is, water drawn from:
- Surface water (rivers, lakes, wetlands)
- Ground water (via wells and alluvial sands)
- Piped or trucked water from municipal authorities or other industrial users
- Operational use: as input and as output:
Water is used extensively in shale gas wells. To reduce freshwater use, in Louisiana, USA, BG Group have agreed with a local paper mill to reuse waste water from the paper pulp manufacture.
Water is produced in large quantity by coal seam gas wells. This is saltwater, and must be treated or evaporated before it can be used. BG Group are looking at options to reuse this water for local communities in Queensland, Australia, where there has been a prolonged drought.
- Spillage: either of oil into water, or spills of water.
- Oil into water: BG Group report on spillages and indicate the measures put in place to reduce this
- Water loss: again, details explaining the spills are provided.
BG Group and water: Performance
2009 (the most recent report, and the first year the report was available online only) was an interesting year, water-wise, for BG Group, because it included:
- beginning the development of a group-wide water management strategy (target: 2010)
- reporting on freshwater withdrawal for the first time
- increasing the use of water operationally, primarily because of the acquisition of QGC in 2008
- bringing water produced by the Egyptian and the Trinidad and Tobago operations onshore for treatment, to protect the marine environment
- reporting of produced water has changed to be brought into line with the GRI recommendations
- beginning to collate information about environmental training courses in their competency development system.
2009 was clearly a year in which BG Group began to focus on water management. Data on discharges to water – and which type of water – are available online.
It is unfortunate that their operational water use increased, but acquisition of other companies is bound to bring a variety of issues, and water use should be included among these. Interestingly, water management has only recently emerged as a material issue for the group, following their acquisition of other businesses.
The newest acquisition, QGC should be ISO14001 certified (the international standard for environmental performance) by Q1 2011; it will be interesting to see the changes in water use over time as the water management strategy takes effect.
SABMiller: more beer – less water
Overall, I found that the discussion of water use by BG Group was admirably full, clearly presented and informative. It appears that BG Group are taking their corporate impact on our global water resources seriously, and the details on both controlled and uncontrolled discharges to water are also easy to find and clearly stated. The reuse strategies for both input and output water I find fascinating; perhaps there should be more such partnerships established between industries?
I couldn’t spot any specific water-related targets, and it would be good to see more charts, perhaps something similar to the SABMiller water:beer ratio, to give the visitor an idea of how much water is needed to produce X amount of natural gas. A barrel of oil is a concept that the average visitor – me – can grasp, but a billion cubic feet of gas is more difficult to visualise. How many homes would a billion cubic feet of gas heat for how long?
That said, though, I think this is a commendably detailed approach to reporting on water use by this company, and I look forward to the 2010 report.
What do you think? Could BG Group have done more to report on their impact on our water?
This post is part of Blog Action Day, which this year is discussing water.
Previous contributions to Blog Action Day were:
2009: Climate change and the corporate site
2008: Celebrating the FTSE 100: action on the breadline
2007: Enticing the green investor
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