John D. Rockefeller's Entry Into The Oil Industry

1112 Words3 Pages

Over the course of this paper information regarding John D Rockefeller creation of the Standard Oil company will be showcased. First, information about Rockefeller’s entry into the oil industry will be presented. Second, how Standard Oil became the largest oil company in the United States. Next, the innovative products and procedures that Standard Oil creates to keep the company relevant. Lastly, how the dissolution of Standard Oil paves the way for a diverse oil market with companies specializing in different productions. Now, John D Rockefeller may have been a cutthroat businessman; however, Rockefeller’s vision for Standard Oil creates a period of innovation and advancement of the none existent oil industry that remains today.
John Rockefeller …show more content…

Rockefeller knows that by having the controlling interest in the company that he can drive the direction of the refinery. As a result, the Standard Oil company came to fruition just a few short years after achieving majority control with the help of his brother and Henry Flagler ( ). Now, with these three men running the Standard Oil company, the plan to take over the oil industry went into full effect. Rockefeller begins to use his railroad connection to strike shipping deals to get crude goods to market a lower price than the competitor. As a result of this deal Standard Oil drops the price point of crude products well below standard market price. Now, while this lower price is great for merchants and consumers, it does not fare well for other oil companies. The only possible way the smaller oil companies could compete with Standard Oil is to take a profit loss ultimately leading to the mass selling of company stock. Standard Oil immediately swoops in to buy the controlling share of the majority of oil industry’s companies. Thus, Standard Oil now owns ninety percent of the nation’s oil industry and distribution pipelines ( ). Now, that information regarding Standard Oil’s growth into an oil powerhouse is covered, let’s look at how product innovation helps to keep Standard Oil in the …show more content…

However, that changes rapidly with the passing of the Sherman Anti-Trust Act. Now, in the true spirit of capitalism, the governmental sought to make the oil industry a market that any entrepreneur could enter. Nevertheless, with the industry’s current structure it was in possible for anyone to come into oil without going bankrupt. Consequently, the government invokes Sherman Anti-Trust Act forcing the Standard Oil company to dissolve its oil trust into thirty smaller companies ( ). Now, the dissolution of Standard Oil aids in the creation of competitive market pricing for crude products. Additionally, the dissolution of Standard Oil aid in creating a diverse market in which different refiners specialize in the development of different crude products, ultimately creating different commodities with the oil industry. Now, that the contributions of the dissolution of Standard Oil are shown, let’s move

More about John D. Rockefeller's Entry Into The Oil Industry

Open Document