History of the United States II / Unit 3 USH2 0316 worked example, 60 to 90 seconds
Two Ways to Grow
The idea
Horizontal and vertical integration are often confused because both build giant firms. Horizontal integration grows sideways: a company buys its competitors at the same stage of business, as Standard Oil bought rival refineries. Vertical integration grows along the chain: a company buys its suppliers and its distributors, as Carnegie controlled everything from raw materials to the finished product. One removes rivals; the other removes the need to deal with anyone else at all.
In practice
A refinery buying its neighbours, set beside a steelmaker buying the mines, the transport and the sales that feed and follow its mills.
Where people slip
The confusion to avoid is treating the two as one strategy under two names. Ask which way the company grew: across its own industry, or up and down the chain that supplies it. Standard Oil did both, which is why it serves as the standard example of each.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Unlocks
Something wrong in this lesson? Flag it · Sources for History of the United States II