Name this Company [ revealed ]

We have discussed Imperial Oil , Canadian Celanese (Is That All There Is), Bick’s Pickles and Hershey’s (About Pickles and Chocolates) as examples of companies with varied pedigree and different current outcomes. For the record Imperial Oil Limited (IOL) is the only remaining company with substantial Canadian operations.

Bick’s was made in Canada. Hershey’s was a US subsidiary. Celanese was a Canadian public company with a majority US shareholder. IOL was founded in Canada and now a Canadian public company with a majority US shareholder.

Are there business lessons to be learned keeping in mind product obsolescence is not a significant reason for these dramatic corporate restructurings?

There is no shortage of well worn reasons. Canadian Celanese was too small to compete in a more globalized economy. Petrochemical plants needed economies of scale, access to deep water shipping, and lower feed stock prices. The textile operations needed lower labour costs and economies of scale.

Bick’s is a bit of a conundrum. The company enjoyed many of the necessary competitive advantages operating in Canada.

Hershey’s relocated to add efficiencies and avoid a large capital replacement program.

That leaves us with IOL.

The popular analysis will say that this company operates in an industry with a competitive advantage supplied by a Canadian resource rich environment. The oil and gas are here, both in more conventional reservoirs and in sand. The market is here as well.

The question is why do Imperial and Exxon Moblile, as a majority shareholder, choose this very successful model in comparison with the majority of other global companies doing business in Canada?

One answer is results. While there have been changes in strategy such as reduced attention to the western sedimentary basin, IOL is a model of consistency. Performance seems to follow.