1. Strategies then and Now
Business Strategies
Understanding Goal: What strategies did businesses use to
decrease costs and increase profits?
Strategies then and Now

2. Today we are going to talk about
Corporations
Monopolies
Trusts
Horizontal Integration
Vertical Integration
Anti-Trust Laws

3. What is a Corporation? Group ownership of a company
Less individual Risk
Works well for risky industries that might fail
If one person chooses to leave the investment others can buy out their shares.

4. What is a monopoly? Complete control of products or services
Corporations reduce competition
When consumers have no other choice about where to buy a product the corporation can increase the price.

5. Horizontal Integration
Turning many firms into one business in order to create a giant company with low production costs.
Advantages: Reduces competition

6. What is a Trust?
Ohio state law prevented one corporation from buying stock in another so that Rockefeller could not buy out his competitors.
Trusts were a way to get around this law.
Trusts: Smaller corporations allow larger corporations to control (BUT NOT OWN) its stock “in trust.”

7. Vertical Integration Gaining control of the different phases
of a products development.
Advantages: it gives a company
complete control over the phases of
development.

8. Government Regulation
Sherman Antitrust Act (1890): Outlawed any trust that restrained trade and commerce among the states.
Sherman Antitrust Act was rarely enforced until the early 1900s. In fact, it was used against labor unions who “held back trade.”