USA HISTORY

Detailed explanation-1: -John D. Rockefeller used horizontal integration to build the Standard Oil empire by making agreements with railroads. Rockefeller’s business was big enough that he could negotiate favorable rates for transporting oil because he was transporting a lot of oil and the railroads wanted his business.

Detailed explanation-2: -Horizontal integration enabled Rockefeller to gain tremendous control over the oil industry and use that power to influence vendors and competitors. For example, he could pressure railroads into giving him lower rates because of the volume of his products.

Detailed explanation-3: -Standard Oil gained a monopoly in the oil industry by buying rival refineries and developing companies for distributing and marketing its products around the globe. In 1882, these various companies were combined into the Standard Oil Trust, which would control some 90 percent of the nation’s refineries and pipelines.

Detailed explanation-4: -Rockefeller and his Standard Oil Company-in fact, they were the only names in the industry. Whereas Carnegie employed vertical integration to create his steel empire, Rockefeller used horizontal integration, essentially buying out all the other oil companies so that he had no competition left.

Detailed explanation-5: -To implement his trust, Rockefeller and his associates persuaded the stockholders of forty companies to exchange their stock for trust certificates. Within three years, the Standard Oil Trust had consolidated crude‑oil buying throughout its member firms and slashed the number of refineries by half.