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Big Business

Big Business. Corporations. Corporations are essentially a big business Owned by many people but treated as one person Stockholders Stock: shares of ownership. Economies of Scale. Money a business made from selling stock was used to pay for a workforce and technology to increase efficiency

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Big Business

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  1. Big Business

  2. Corporations • Corporationsare essentially a big business • Owned by many people but treated as one person • Stockholders • Stock: shares of ownership

  3. Economies of Scale • Money a business made from selling stock was used to pay for a workforce and technology to increase efficiency • Economies of Scale • This made it possible for a business to stay open, even during bad economic times • Forcing many small business, that couldn’t, to close; • leaving only big businesses

  4. Pools • Pools • Some entrepreneurs cheated by temporarily going under the agreed price • This drew business away from competitors • Also contributed to the closing of several small businesses • Once all the competitors were gone, the owners could raise prices well above production costs • This is how monopolieswere made

  5. Vertical Integration • instead of paying companies for necessary material, a corporation would simply buy out the suppliers • Controlling everything • Saves money and promotes business growth

  6. Horizontal Integration • Occurs when many firms, engaged in the same type of business, merge together • Vertical and horizontal integration are shortcuts to creating big businesses

  7. Famous Robber Barons and Their Monopolies • Robber Baron • a term used to reference a businessman who gained his wealth through questionable practices

  8. Famous Robber Barons and Their Monopolies • John D. Rockefeller • Owned the Standard Oil Company • He created a monopoly in the oil industry by ensuring that his company was the only supplier of oil from the drilling to the refining

  9. Famous Robber Barons and Their Monopolies • Andrew Carnegie • Owned a steel company that controlled the iron and coal mines • Also owned railroads and steam ships • In this way, he controlled the production of steel and forced out competition

  10. Famous Robber Barons and Their Monopolies • Cornelius Vanderbilt • He and his son owned the New York Central Railroad • Only railroad, at the time, linking NY and Chicago

  11. Holding Companies • A company that does not produce any of its necessary materials itself. • Instead it owns stock in the companies that do produce

  12. Advertising • Large display ads in newspapers, department stores, and catalogs became pivotal to the success of a business. • The biggest businesses could afford more ads (more expensive ones too) • Therefore their sales greatly increased

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