John D. Rockefeller

John D. Rockefeller is known as one of the giants of industry during the late nineteenth and early twentieth centuries. Born in Upstate New York on July 8, 1839, Rockefeller started out his life by selling candy, raising turkeys, and doing “odd jobs” for neighbors, in order to support his family. His father wasn’t involved for much of his childhood; he was a con-artist who travelled across the country selling elixirs. In 1863, Rockefeller, who had become rich by other means already, invested in an oil refinery in Cleveland, Ohio. Two years later, Rockefeller bought out his partners in order to gain control. In 1870, Rockefeller founded Standard Oil, which eventually became a monopoly controlling 90% of the oil refineries in the U.S. Rockefeller refined oil into various products, and as old ones faded, new ones rose. In 1911 however, the Standard Oil Company was broken up after the Supreme Court declared it was violating federal law by restricting trade. Rockefeller then became a philanthropist, donating much of his wealth to education. In 1937, Rockefeller died at age 97, three years short of his goal to live for 100 years.

Rockefeller’s business was about control and efficiency. The control part has to do with the amount of oil refineries Rockefeller brought out of business, some of which he shut down, just to have more control and eliminate competition. Rockefeller also valued efficiency, and Rockefeller tried to find uses for as many bi-products as he could.

One of the reasons Rockefeller was successful was because of vertical integration. Vertical integration is the idea of buying and managing every step of the process for a product. Some examples of Rockefeller’s vertical integration were building their oil barrels, which were shipped on Rockefeller’s tanker cars and cargo ships. Another reason Rockefeller was successful is that he was able to adapt to changing times. When kerosene was replaced with electricity, Rockefeller focused on gasoline for automobiles, which were being produced and bought by many in the early twentieth century. He also employed scientists to figure out uses for petroleum bi-products. Even after the break-up of Standard Oil, Rockefeller had a share in each of the companies, and became richer than ever before, with a personal wealth of $900 million.

Advertisements