Our company and product (product range or services)
The company operates in the highly competitive gas and oil industry and it has branches in different parts of the world. The competitive advantage of ExxonMobil is enhanced by the large market share it has because it operates internationally. The fact that it is a multinational company exposes it to market risks, but the highly qualified and experienced management team has seen it through the challenges. Product diversification is also a major factor that enhances its competitive advantage.
The company is involved in the sale of the products such as gas, petrol, petrochemical materials and lubricants. The products have a wide range of uses that can benefit a buyer. Companies that operate in the transportation sector in particular find the company’s products very useful. Products such as diesel and petrol are used in fueling the fleet of vehicles that such companies may have. Apart from fuelling, the products are also used in facilitating the functioning of these vehicles. This is mostly the function of lubricants as they are used to facilitate the effectiveness of the engine and other parts of the vehicles. Any company dealing with the transportation would thus find the company’s products very useful.
Due to the nature of the selling company’s products, the most suitable buying company is one that operates in an industry that involves extensive use of its products. The buying company is Uber, which operates in the transportation sector in different parts of the world. Since its establishment in 2009, the company has made significant progress and it has a promising future. The company operates as a taxi organization where people use its cars to move from one place to the other. The success of the company over the years is mainly attributed to its ability to integrate modern technology in its operations as well as exceptional customer service (Mandke & Nayar, 2000). The use of technology by the cab company has made it more efficient than the competing firms because it is able to meet the needs of the clients effectively. It has an application where the clients can order a cab and pay for it online thus making the company’s service delivery excellent. The company also embraces innovation and employees are encouraged to be creative. This has made the company popular in offering innovative products such as carpooling feature that was introduced two years ago.
Headquartered in California, the company’s performance has been on an upward trend since its establishment. By 2015, the estimated net worth of the company was $62.5 billion which is an indication of its good performance. To gain a competitive advantage, the company has adopted a market leadership strategy where it aims at establishing branches in as many parts of the world as possible. The strategy is aimed at enlarging the company’s market share so as to get ahead of its competitors. With more than 6700 employees worldwide, the company has perfected the skills of human resources management because it is able to meet the needs of the workers (Anderson, 2014). Since its establishment, the company has not witnessed any cases of industrial actions by the workers because it prioritizes the needs of the employees. Among the factors that have contributed to the company’s success is its ability to acquire and retain talented employees who ensure that the company gets ahead of its competitors.
It is evident that the company benefits greatly from its operations, considering the pace at which it has expanded its operations globally since its inception. Industries that are perceived to be profitable attract other firms with a view of getting a share of the market. The company’s success has attracted new firms into the industry and made the existing companies more aggressive. One of the primary competitors is Lyft, a company that operates quite similarly with Uber. It has smartphone application that enables customers monitor the movement of the cabs (Wallsten, 2015). The other similarity is that the two cab companies use surge pricing. Curb Company is the other primary competitor that operates in more than 60 cities in the United States. Like the other cab companies, it uses app that the clients can monitor the movement of the cabs and book rides for convenience (Rayle et. al., 2014). In the Chinese transport market, Uber’s primary competitor is Didi Kuaidi formed in 2015 as a merger between two major Chinese companies; Didi Dache and Didi Kuaidi. However, despite the high competition, the ability of the Uber cab company to attract and retain highly qualified employees enhances its chances of success in the competitive business environment.
The decisions on whether to buy a property in any company is made by different parties who are interested in enhancing its welfare. The evaluation made by the buying teams influence the company’s decision on whether to purchase the products. The ability of the selling company to convince the buying team about the attractiveness of their products guarantees a good sale, failure to which the company may not buy the products (Schultz & Williamson, 2005). The buying team considers different factors before approving the purchase. Some of the factors that the team considers include the pricing of the products, the expected rate of return, payback period, effect of the product on the society and the company’s budget. The buying team is thus comprised of employees who have different interests in the company, but one that is united by the need to see the company succeed. Considering the purchase of ExxonMobil, Uber Cab Company’s buying team must be comprised of parties that are conversant with the economic and social impacts of the purchase.
One of the buying team members is Travis Kalanick, who is the organization’s chief executive officer. The individual plays a primary role in influencing major decisions by the company such as the sale or purchase of property (Nanka-Bruce, 2011). Among his primary duties include management of financial and physical resources. This implies that the company must consult him before making any major acquisition or disposal of resources (Vivoda, 2009).
The CEO also plays the leadership role of overseeing the decisions made by the board. He advises the board on the most suitable and practical decisions by the company. Due to the nature of roles that the CEO plays in the company, he has the ability to influence the buying decisions of the company. He has information about the financial capability of the company, thus is able to determine if the purchase will be affordable depending on the terms of sale. By acting as the advisor to the company’s board, the CEO has the ability to influence the opinion of the members on the buying decision.
The other member of Uber’s buying team is David Bonderman, who is an influential member of the company’s board of directors. Among the primary roles that he plays as a board member include ensuring that the actions taken by the company enhance the welfare of the shareholders and other stakeholders (Spence, 2011). The individual has the capacity to influence the decisions of the board regarding its intention to purchase any company assets. The primary interest of the individual in the transaction is the effect of the acquired property on the company’s expected rate of return (Davies, 2000). The aim is to acquire assets that increase the rate of return for the company because it enhances the value of company. As a member of the board, David also has the potential to influence the purchase by considering the cash outflow required. The board has a responsibility of ensuring that the company’s financial status is not affected by huge cash outflows, especially when the returns are uncertain.
The other member of the buying team is Ryan Graves who works as the company’s head of global operations. The individual has an influence on the purchase decision because he is concerned with business activities that are conducted in the international market. The company that Uber intends to buy has branches all over the world, thus making his input into the buying decision vital. Among the primary roles of the individual include management of the company’s portfolios to ensure that they maximize its returns.
The decision to buy the company will be determined by the ability of the seller to convince the buying team that the product is worth the price. This entails effective communication of the company’s value to the members of the buying team who have the greatest influence. The influence of the buying team members differs because they all have different responsibilities to the company and its stakeholders. In the current scenario, the most influential member of the buying team is Travis Kalanick, the company’s CEO.
The responsibilities that he has to the company and the stakeholders as well as his interest to steer the company forward makes him the most suitable member of the buying team to sell the company’s value to. As a CEO and a co-founder of the company, his primary wish is to see the company expand its operations to all parts of the world and stay ahead of its competitors. This can be fulfilled by the decision to buy the Oil and Gas Company as it has products that the company uses in its daily operations. The fact that the selling company has well-established markets in many parts of the world is also a factor that makes it a suitable asset for the cab company. Uber can benefit from the already established international markets that ExxonMobil has developed.
One of the factors that influence the impact of Travis on the purchase decision is the fact that he is passionate about the growth and expansion of businesses. This is backed by the fact that he worked as an angel investor prior to establishing the cab company. The job entailed providing financial assistance to companies or individuals that want to establish or expand their operations. This is a clear indication that the CEO values business expansion thus is most likely to buy the idea of purchasing the ExxonMobil Company to enhance the efficiency of its operations. With his computer engineering skills, Travis is likely to lead innovations into the operation of the acquired company to make it more profitable. He is among the most innovative members of the buying team, considering his earlier jobs. Before establishing the cab company, Travis has co-founded a file sharing company known as the Red Swoosh but it did not peak due to legal issues. The product was as a result of his string drive for innovation, a fact that may make him interested in transforming the performance of ExxonMobil Company even further. The company has a great presence in the international market, but there is still a room for improvement.
To effectively communicate a product’s value to the buying team, it is important to identify the most suitable way to capture their attention. Individuals prefer different methods of communication and this determines the most suitable way to reach them. For instance, is the seller targets a buying team member that uses print media most of the time, they may decide to print the information they wish to communicate on mediums such as newspapers and professional journals. In the current case, the sellers need to use social media to reach the cab company’s CEO because this is the channel that he uses most of the time. The sellers may use blogs as this is the most popular way of communicating professional and detailed information.
To make a great impact on influencing the CEO to buy the company, the sellers need to ensure that they communicate effectively to them. The conversation should be short and formal to make the offer more appealing to the buyer. It should be focused on the exceptional values that the company has over other similar firms that Uber may be interested in buying. It is thus important for the seller to focus only on the most valuable features that will most likely attract the attention of the buyer. Selecting a suitable conversation starter is one of the ways that the seller can enhance their chances of convincing the CEO about buying the company. The conversation starters are useful because they help the individuals initiate constructive conversations. The nature of a conversation starter depends on whether the setting is appropriate for business or plain social networking. In the current scenario, the seller needs to adopt a professional conversation starter that will capture Uber CEO’s attention.
One of the best ways to start a conversation with the CEO is to talk about a less generic topic that will capture the CEO’s attention and keep the dialogue going. The strategy will warm up the relationship between the seller and the buyer, making it easier for the seller to meet their sale objective. The seller may also adopt a conversation starter that encourages the CEO to talk about their personal lives. For instance, they may ask them about their place of residence or about the place where they grew up. Another question that may interest the CEO is about his hobbies outside the work environment. The conversation starter creates a positive impression of the seller to the buyer, making it easier for the individuals to have a dialogue.
Once the seller has started the conversation with the CEO, it is important that they keep in mind the main intention of the talk. Although the conversation starter is not related to work, the dialogue that follows should be about communicating the value of the selling company to the buyer. One of the best ways of ensuring that the dialogue meets the expected objectives is the use of ADAPT system to ask the CEO relevant questions. The system involves using steps that enhances the effectiveness of the dialogue (Lindgreen et al., 2006). The first phase is referred to as assessment, which is aimed at ensuring that the available information about the company is valid. For instance, in the current scenario, the sellers may do this by validating information about the number of cities that the cab company operates in.
Discovery is the second phase, aimed at assessing the needs of the buyer, based on the information provided in the previous stage. For instance, based on the number of cities that the cab company operates in, the seller may suggest that the company may need to expand its operations to other parts of the world that are still unexploited. The number of vehicles that the company has is also a good piece of information that the seller can use to convince the buyer that buying a fuel company would significantly reduce its operational costs. The next step is activation, which is aimed at showing the buyer the need to purchase the product in question. In the current scenario, the seller may ask the buyer about the strategies that the company has put in place to ensure that it conducts its services with minimum costs of operation.
The seller may show the buyer that fuel and other products such as lubricants make up the most part of its input. The primary objective of the seller at this point is to bring to the buyer’s attention, the challenges that they think the company might be facing and the most suitable solutions. For instance, asking the CEO about the strategies that the company intends to use to diversify its market or to increase its efficiency draws his attention to the fact that the company may not be operating optimally. This gives the seller a better chance of convincing the buyer that a decision to buy the company would solve its problems.
The fourth phase is known as projection, which is aimed at informing the buyer about the benefits of filling the available gaps in the company. The aim of the seller at this phase is to communicate the values of the products to the buyer. At this phase, the seller should ask questions that prompt the buyer to think about the benefits that his company would gain from buying the company. For instance, the seller may ask the buyer about his opinion on the effect of expanding to new markets or buying a company that deals in most of his company’s input. The final phase in the questioning system is known as transitioning, which is the point at which the seller makes the final sale. At this point, the seller has an idea of the qualities that the buyer may be interested in considering their previous responses. The questions that the seller asks at this point are mainly aimed at establishing whether the buyer may be interested in their products. This is the point where the seller will inform Uber Company’s CEO about the products that the company offers and the ways that they can contribute to the company’s profitability should he go ahead with the buying process.
For the sale to be effective, the sellers must be ready to communicate the company’s value to the buyer in the most suitable way. Among the factors that determine whether the buyer becomes interested in the product offered by the seller is the type of dialogues that the two parties hold (Ballantyne & Varey, 2006). The seller has a responsibility of ensuring that the dialogue is interesting enough to capture full attention of the buyer. By using the ADAPT system of questioning, it should not be hard for the sales team to communicate effectively with the buyer. The aim of the seller at this point is not to ask the buyer about the company, but to communicate the benefits of the products they are offering with an aim of closing the sale. The sale may be closed by an immediate purchase of the product or a commitment by the buyer to purchase the product at a later date. The following is an example that describes how the sales dialogue between ExxonMobil Company that is the seller and Uber Cab Company that acts as the buyer.
Seller: Hello, my name is John, the managing director of marketing for ExxonMobil Company, are you in the middle of something?
Buyer: No. Go ahead please.
Seller: I am calling to inform you about the intention of the company to be sold to interested firms, I was wondering if Uber Company would be interested in the purchase. If you are interested, I can send you the specifications about the company’s products as well as its performance through the email.
Buyer: Thank you John for calling. I am interested in knowing why you think my company would be interested in your offer.
Seller: The main factor that drives me to believe that Uber could be a potential buyer is the nature of its operations. ExxonMobil Company deals in products that your company uses in its day-to-day operations. Among the products sold by the company include gas, petrol, diesel and lubricants that are used by your company in its operations.
Buyer: How does buying your product benefit my company’s operations?
Seller: By buying the company, some costs such as fueling will significantly drop, thus boosting the profitability of the company. Another benefit is that your company will be able to penetrate markets where ExxonMobil operate more easily after buying the company. Further, we will provide your company with the necessary details it may require about the economic, political and social influences of the new international markets. This will help your company in planning about marketing strategies to adopt in different countries that it has not explored.
Buyer: Thank you for the offer John. Your timing is perfect because I have a board meeting tomorrow I will mention about the offer to the members for further discussion. Kindly send me the company’s details including its financial statements for the past year. Thank you.
Seller: I look forward to transacting with the company soon. Thank you.
Using an anecdote in the sales presentation is important as it enhances the buyer’s understanding of the selling company. It is a short story that enables the seller communicate the values of their offer, with an aim of convincing them to purchase the product in question. The following is a short anecdote that the seller may use to make the sale a success.
The thought of having a textile company involved in the sale of pharmaceutical products is uncommon. However, for Ajay Piramal this was a perfect strategy to see the business through hard economic times. In his opinion, the similarity of the products sold does not matter as long as the products are able to sell. Piramal proved to many businesses that diversification of products is important in enhancing the productivity of a company. Initally, the family business was mainly concerned with selling textile but he integrated a pharmaceutical product line in the company and it experienced great success despite the fact that the products were from different industries. This is the same case that would happen with the cab company after buying ExxonMobil, even if they operate in different industries.
The main similarity between the companies involved is that they are experienced in international trade. They have branches in different parts of the country, thus have experience in the benefits and challenges presented by international markets. The main difference with the companies is that they operate in different industries thus they have varying experiences about business such as the level of competition and profitability. The other difference is that the companies are involved in the sale of products that differ. While ExxonMobil is involved in the sale of tangible products such as diesel, Uber offers transport services to people willing to move to different destinations. The fact that the companies offer different products implies that they have varying experience on trade.
In business, analogies are used to influence the buying decisions by showing the buyers the importance of a positive purchase decision. In the current scenario, the most suitable analogy is, ‘it is not wise to put all your eggs in one basket.’ The analogy is suitable for companies that are involved in a single line of business such as Uber that only offers cab services. Factors such as stiff competition are likely to affect the success of the business negatively. It is therefore advisable for the company to diversify its portfolio by buying ExxonMobil Company.
It is unlikely for the process of sale to end without any objections from the buying company based on the features of the products offered and the perceived value. The following are the sales objections that the sellers may experience and the possible responses.
- ExxonMobil is not the only company involved in the manufacture and sale of products such as diesel and lubricants. Why should we consider buying it instead of Chevron which has the same products?
ExxonMobil will give you value for your money because it is familiar with the challenges that may hinder successful operations in the international market.
- The company has been operating profitably since its inception. What motivates the sale decision?
The sale decision is motivated by the desire for the company to venture in a different industry.
- The company has invested heavily in establishing its brand name. Will there be a need to change it?
- Our employees may be unfamiliar with the operations of the company. How do you intend to ensure that we operate efficiently?
The company is ready to have the same team of employees work for Uber.
- Paying the whole amount of money entails a very huge cash outflow by Uber. In case we buy the company, what other payment options are acceptable?
The company allows payment of 20% of the total amount and the rest can be cleared in 60 monthly installments.
- Supposing we buy the company, how long should it take before we make the first deposit?
The deposit should be made within 14 days.
- Suppose we realize that the financial statements do not present the true value of the company, what action should we take?
We guarantee that the statements are prepared by professionals thus highly accurate.
- The shareholders have a major role to play in the sale. Who are the primary shareholders?
The major shareholders are institutional parties
- Before taking a major action such as this, shareholders must be consulted. How many approved the sale?
All the shareholders were consulted and 89% of them approved the sale.
- We are already working with Chevron Corporation to have it provide us with fuel on credit. Do you still think we need to buy the company?
Yes you should buy it to maximize your value.
- With the current competition in the oil and gas industry, do you think the company will still make profits?
- Some of the company’s branches are still in operation even after reporting very low returns? Don’t you think this has affected the company’s value?
Plans were underway to close the non-performing branches.
When closing the sale, it is important for the sellers to encourage the buyer to commit to the transaction. The commitment process will begin with a request to the buyer to inform the seller about the next meeting so as to have another chance to communicate the company’s value. The seller will then provide the buyer with a confidentiality agreement that ensures that the target buyer does not disclose any information provided to a third party. The term sheet will also be provided by the seller to ensure that the target buyer gets all the information about the products offered.
The after-sales service will be offered by the seller to ensure that they do not incur losses that are related to the company’s faulty products or negligence (Gaiardelli, Saccani & Songini, 2007). The following table provides a guideline of the after-sales services that will be offered by the company.
|Effective date||Implementation strategy||Reasons for re-ordering|
|One month after the sale||Replacement of all the faulty equipment such as gas cylinders.||If there is enough proof that the products are non-functional.|
|Six months after the sale||Refund of cash for faulty equipment that may not be easily detected.||The refund may be done for products that cannot be re-ordered.|
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