Which business practice did Rockefeller repeatedly use that helped him succeed in building his oil monopoly?
Answer (2)
John D. Rockefeller used horizontal integration and the formation of trusts to control his competitors and build a monopoly in the oil industry, leading to Standard Oil dominating up to 90 percent of the nation's refineries by the 1890s.
American industrialist John D. Rockefeller employed several business practices to build his oil monopoly, most notably horizontal integration and the creation of trusts. Horizontal integration involved merging with or acquiring other oil companies, which enabled Standard Oil to control a substantial portion of the oil industry. By underpricing his product, Rockefeller could outcompete and often drive competitors out of the market, or coerce them into selling their operations to him at significantly low prices. He also secured advantageous transportation rates with railroads, further lowering his costs. Notably, Rockefeller exploited the trust structure: a group of trustees held the stock of various oil companies, allowing Rockefeller to sidestep the legal limitations on direct ownership. These practices allowed Standard Oil to dominate the industry, controlling up to 90 percent of the nation's refineries by the 1890s.
John D. Rockefeller built his oil monopoly through horizontal integration by acquiring competing oil companies and through trusts, which allowed him to control multiple companies without direct ownership. He also used aggressive pricing strategies and negotiated favorable railroad transportation rates. These practices enabled Standard Oil to dominate the oil industry, controlling over 90% of the market by the 1890s.
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