G Fex
G.E., EXXON AND FORD MERGE
TO CREATE AUTOS POWERED BY
COSMIC ELECTRICITY
RATHER THAN FOSSIL FUELS
NEW PROCESS IS CALLED “LI-FI”
Current Company Situation
 Exxon is an oil exploration and refining company
 Exxon earns $259.488B per year
 Used to be one of the most profitable companies in the world
 Ford is an automobile manufacturer
 Ford’s revenues are $149.588B per year
 The only auto company that did not participate in the bailout
 G.E. is an energy and infrastructure provider
 G.E. earns $117.386B per year
 Has had a few difficult years
 Stock worth half of what it was in 2000
New Strategy
 In order to expand the business and diversify its
holdings, Exxon plans to merge with Ford and G.E. to
create G.Fex




Uses Cosmic Energy, stored in satellites and delivered through light
ray to power automobiles
Ford will manufacture the new automobiles that run on Li-Fi
G.E. will deliver the electricity through Li-Fi
Exxon will fund the project so it is not so dependent on oil sales
 Why should Exxon need a new strategy?



Oil reserves are limited
People want an alternative fuel, and LiFi is both economical and
unlimited
Turmoil in the Middle East, oil prices have plummeted
Rationale – Why It Would Work
 Everyone wants a cheap, renewable energy source
 G.Fex would take light energy from the Sun and
transmit it through light rays to the Earth, cleanly

Not like solar power, where you have to capture the power in a
cell once it reaches Earth, and requires receptor panels
 What you could use it for
 You could power your electric car constantly
 No need for a plug, even when it’s cloudy
 No need for gasoline or oil
 Can eventually power homes and factories
 Ensures that G.Fex continues to profit even if oil demand
drops
Timeline
G.Fex Launches
Satellites and
Moon/Mars
energy stations
Testing on
prototype auto
models
Year 1-3
G.Fex tests light
capture and
transmission
Auto Plants are
refitted for
production
G.Fex rolls out
delivery systems
to businesses and
consumers
Autos produced
and sold
• Year 6-8
• Year 4-5
SWOT Analysis
Strengths
Weaknesses
 Positions G.Fex for first to
 Expensive
market adoption for LiFi
 Repositions G.Fex as a green
energy leader rather than a
polluter
Opportunities
 Long payback period
• Third World countries are
pursuing new energy methods
due to poor infrastructure
• The world is running out of oil
 Unproven
 Requires extensive changes
Threats
• Sun spots/eruptions may
make this energy system
unreliable
• Solar competitors may offer
a similar product
Ethical Considerations
Ethical
Unethical
 G.Fex can help stave off
 G.Fex can put competitors
pollution and disease by
creating green energy that
is renewable
 G.Fex can help Third
World countries
modernize cheaply
 G.Fex can make
transportation cheap for
everyone
out of business by using
the loss leader method
 G.Fex could control Third
World countries through
their energy dependency
 G.Fex will make other
companies go out of
business, losing jobs
Income Statements
Revenues – Expenses = Profit
Show how you will increase profit (then delete these instructions)
 Take the companies and
combine their Revenues:




Exxon
Ford
GE
Total
$259.488B
$149.588B
$117.386B
$526.462B
Add Savings $ 4.3445B
New Revenue$530.8065B
 Here, you can save some money
by combining departments:
 Expenses:
Exxon
$243.338B
 Ford
$142.215B
 GE
$123.531B
 Total
$509.084B
Rev – Exp = $17.378B
Savings:
25%
$4.3445B

Stock Performance
(You will delete instructions on this slide for your presentation)
 Compare time periods:

Identify a trend – Example:
Exxon’s revenues have dropped over the last three years
 They need a new strategy – since they are energy leaders, it may as
well be in the energy field


Compare individual line items

The decrease is explained by the escalating cost of drilling for oil
 Use percentages to make comparisons


Revenue dropped 30% year over year
With the new strategy, 25% of expenses will be saved through
redundancy of personnel (for all the combined companies)
 Write out a list of possible questions before you present
Effect of Merger on Stock
 The stock price of GFex will be stable because the
underlying companies all pay a dividend

The dividend will continue to be paid and will be the highest
dividend in the market: $4.18 combined
 People will continue to buy the stock for the
dividend, pushing up the price
 Downside: if other players in the industry are able to
create this energy product more cheaply, GFex
becomes a behemoth that has too many layers of
employees/management and high labor costs