John D. Rockefeller

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John D. Rockefeller
Do you know the only thing that gives me
pleasure? It's to see my dividends coming in.
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• In 1859 oil was discovered in Titusville,
  Pennsylvania, touching off the growth of a new
  industry.
• Driven largely by the demand for kerosene for
  lighting. With the whale population depleted,
  other sources of fuel for lamps were needed.
• Rockefeller was immediately attracted to the oil
  business.

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• Cleveland, with its Great Lakes access, rail
  service and supply of immigrant labor, emerged
  early as a refining center.
• In 1870, Rockefeller teamed with his brother
  William, Henry M. Flagler and Samuel Andrews
  (inventor of an inexpensive means of refining
  crude oil) to establish the Standard Oil Company.

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An oil refinery is an industrial process plant
where crude oil is processed and refined into
useful petroleum products. Raw or unprocessed
("crude") oil is not very useful in the form it
comes in out of the ground. It needs to be broken
down into parts and refined before use.
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• Standard Oil and its subsidiaries quickly
  managed to consolidate the refining business in
  the Cleveland area and then began to extend their
  control into Pittsburgh, Philadelphia and New
  York City.
• Rockefeller vertically integrated his business
  but was known for horizontal integration.

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• Horizontal integration occurs when a business
  expands its control over an industry by
  dominating the strategic stage in
  manufacturing. For example, an oil company would
  be horizontally integrated if it owned or
  controlled other oil refineries.

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• Beginning in the 1870s, Standard Oil employed a
  number of cutthroat business practices,
  including
• Monopolization - Rockefeller is remembered for
  buying up all of the components needed for the
  manufacture of oil barrels in order to prohibit
  his competitors from getting their product on the
  market.

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• Rate Wars - the giant Standard Oil was able to
  withstand short term losses by cutting the price
  of oil smaller competitors could not keep pace
  and either went out of business or sold out to
  Rockefeller

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• Rebates - Rockefeller was able to demand a
  refund on public rates offered by the railroads
  the carriers agreed to this practice because of
  Standard's immense volume
• Intimidation - on more than one occasion
  Standard dispatched thugs to break up
  competitors' operations that could not otherwise
  be controlled

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• Rockefeller was also one of the most important
  philanthropists of his era.
• Rockefeller Foundation

The endowment's assets were 3.7 billion at
year-end 2006, and ranks 15th in total assets,
out of all foundations in the United States.