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John D. Rockefeller: Horizontal Integration
16
Transcript
John D. Rockefeller: Horizontal Integration
Changing American Commerce
- Introduces Corporation
- Strategic Policies
- Booming Oil
- Not Pure Capitalism
Excessive Power
Standard Oil left many impressions of success and wealth on the American public, but one critic disagrees describing “The saga of Standard Oil ranks as one of the most dramatic episode in the history of the U.S. economy...[Its] dominance of oil, together with its tentacles entwined deep into the rail road’s, other industries and even various levels of government, persisted and intensified, despite a growing public outcry” (Dismantling 1).
Legacy:
- Ruthless Businessman
- Wealth
- First True Large Corporation
- "Richest Man"
How do you think Rockefeller innovated his time and influenced our time?
_______________
The Big Idea
Change & Innovation
- Robber-Baron
In response to Rockefeller’s ruthless and cutthroat policies, Ida Tarbell, an investigative journalist and a critic of Standard Oil wrote, “The feeling of outrage and resentment against the Standard Oil Company…was intensified…by the knowledge that Mr. Rockefeller was so enormously benefited [by] oil wrung from his neighbors by an outrageous conspiracy” (Tarbell 46).
Rockefeller's Critics
Rockefeller's Policies
- Cutting price of oil
- Alliance with railroads
- Buying up competing refineries
- Intimidation
By Rita Faykina & Phillip Belder
Standard Oil
Historians of Rockefeller’s portray the early oil business as chaotic with numerous inefficient small businesses. As Mr. Rockefeller joins the industry, “his intention was to organize and refine oil production. He essentially describes the only way to make great money in the oil industry: one would need to make order from chaos. Standard oil became the order he envisioned” (Rockefeller 1-2).
1870 - Cleveland, OH
Grew rapidly
Industrialist Era
Rockefeller's Vision
Standard Oil Basics
- Move along sector of production
Deeper Look Into Horizontal Integration
Real World Example
-Massive horizontal expansion
-Horizontal Vs. Vertical
Coca-Cola Buys out Pepsi
Example
Deeper Look Into Horizontal Integration
- Horizontal vs. Vertical
- Similar company expansion
- Great growth
- A business strategy of expansion across a specific industry
- When a company has explicit control of market
How This Applies
-Merges together similar companies as one
Important Terms
- Determines most terms for consumer
-Frequent oil mergers
-Oil Monopoly
-At its peak, owned 90%
Horizontal Integration:
Monopoly:
-Frequent Standard Oil mergers
-At its peak, it owned 90%
-Monopoly over oil production
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