Rockefeller and Oil Rockefeller and Oil (1863)(1863)Scott and Il-jeeScott and Il-jee

Who is John D. Who is John D. Rockefeller?Rockefeller?

Founder of Standard Founder of Standard Oil CompanyOil Company

Vertical and Horizontal Vertical and Horizontal integration methodintegration method

Drove his rivals out of Drove his rivals out of businessbusiness

By 1880 controlled By 1880 controlled 90% of country’s 90% of country’s petroleum-refining petroleum-refining capacity.capacity.

Vertical IntegrationVertical Integration

A method to acquire companies that provide A method to acquire companies that provide them with materials at cheaper price.them with materials at cheaper price.

Acquiring other companiesAcquiring other companies

barrel factories, oil fields, oil storage barrel factories, oil fields, oil storage facillities, pipe lines, railroad tanker carsfacillities, pipe lines, railroad tanker cars

Abled Rockefeller to sell his oil for cheaper Abled Rockefeller to sell his oil for cheaper price than his competitors price than his competitors

Horizontal IntegrationHorizontal Integration

““one company’s control over another company one company’s control over another company producing same product”producing same product”

Taking over same types of companiesTaking over same types of companies

Rockefeller’s methodRockefeller’s method

Brought Standard Oil Company as nation’s first Brought Standard Oil Company as nation’s first trusttrust

trusttrust: a large company that has or attempts to gain : a large company that has or attempts to gain monopolistic control of a marketmonopolistic control of a market

Why Monopolize?Why Monopolize?

Because Rockefeller believed competition was Because Rockefeller believed competition was inefficient, he decides to gain control of the oil inefficient, he decides to gain control of the oil industryindustry