Do Now Grab a worksheet and answer questions

Do Now: Grab a worksheet and answer questions Objectives: Students will be able to. . . (1) define vertical and horizontal integration (2) create a fake business using those principles. Homework: Men who built America Questions due tomorrow

Stock Market

Cost of Business What are some costs a business might have? (Let’s make a list) Fixed Costs – Costs that don’t change regardless of production (Pay even if business isn’t running) Operating Costs – Costs that can change (Pay only if business is running)

Vertical Integration Owning all levels of a company production of a product Why is this good?

Horizontal Integration Trying to buy competing companies that do the same thing. Who did this in the videos we watched?

Standard Oil Rockefeller’s company Horizontal Integration Standard Oil – Almost had monopoly Rest of world kept prices down

Selling products New advertising – Billboards Department stores – Lots of products in one place Chain stores! (Woolworths) Mail-order catalogs

Andrew Carnegie Born in Scotland Grew up in railroad industry Eventually invested in steel Traveled to Europe where he found the Bessemer Process – Cheap way of producing steel

Trusts States made it illegal for one company to own stock in another without permission Standard Oil formed trust – new way of merging business One person maintains another’s property (Trustees) Didn’t ‘own’ just managed – NOT ILLEGAL!

Holding Companies NJ – Helped big business with a law Companies in NJ could own stock in other businesses without permission from state Holding Company – Doesn’t produce anything, just owns stock in companies that do Headquarters in NJ and managing other businesses