By Sebastian Schmid
John Davison Rockefeller was an American business tycoon and philanthropist. He was not born rich but become the wealthiest man in modern history. He was born in a poor family in New York, moved from one farm to another in Pennsylvania, and finally got settled in Ohio. His father, William Avery Rockefeller was a peddler who used to move from one part of the country to another selling goods and his mother raised the family.
Rockefeller after getting an exceptionally good education started a job as a commission house clerk at the age of 16. But soon he left the job to form a business coalition with oil driller Maurice Clark and named it Standard Oil Company. During this period oil was discovered in Pennsylvania and the oil market was booming. He shifted the focus of the company from drilling to oil refining.
From the very start, Rockefeller knew how to handle risks. He was well aware that dealing in oil can reap huge profits but the chances of loss are also equal. Therefore he opted for a refining business where profits are small but secured. By doing extensive research he made use of oil by-products by making paints, lubricants, and other useful items. John Davison Rockefeller was a competitive person and he wanted to create his monopoly over oil. He made huge profits in 1890 which he used to stamp out the competitors.
He won this oil race by adopting the following tactics.
- To weaken small companies he used to buy all oil barrels.
- By setting price wars between subsidiaries which in turn used to sell at loss.
- He bribed the legislators to support him.
- Using his contact with railroad companies he used to affect the shipments by train.
In an effort to improve the transport of his oil, he wanted to help South improvement company to buy all the railroad in exchange for rebated but he could not succeed. After this failed attempt, he became determined to reorganize his continuously stretching business. He along with his partners came with an idea of a trust where they can exchange their holdings for share. This helped Rockefeller to attain control and veto power on all the corporate boards within his community.
The instant result of this power was the standardization of the company, lower prices, and also the company got assets and permission to build pipelines and other infrastructure for the first time. In order to improve the quality and to get a variety of combustible fuels, Standard Oil Company employed chemists who also found ways to convert waste into products. The petroleum after extracting from the ground was converted into products like diesel fuels, hair gel and varnish.
These products were produced at lower costs there the company saw an increase in the global economy of scale.
Standard Oil Company operated with many subsidiary industries like copper, iron, and coal. Rockefeller also opened general stores to sell only his company’s products. The company bought a newspaper to serve the company’s interests. The company also manufactured its sulphuric acid and owned boats, warehouses, and railroad cars t protect its shipments.
John D. Rockefeller is still considered the richest person in the world and many people regard him as manipulative and fiercely ambitious but he gave most of his fortunes in charity work. He founded Rockefeller’s foundation in the last years of his life to benefit millions of people after his death.
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