Was Cornelius Vanderbilt horizontal or vertical integration?
What type of business strategy employed by Cornelius Vanderbilt. Did Vanderbilt use vertical integration?
Cornelius Vanderbilt was a proponent of horizontal integration. He used his railroad companies to purchase other existing railroads and expand his own business.
Cornelius Vanderbilt was a prominent American entrepreneur and industrialist who is known for his innovative approach to business. He believed in the power of horizontal integration, which involves combining multiple companies within the same industry to create a larger company with greater market share. This strategy allowed him to gain control over entire industries, such as the railroad industry, which he dominated in the 19th century. As a result of his success, Cornelius Vanderbilt is widely considered one of the most influential businessmen in American history.
The United States of America has emerged as a superpower primarily due to the dedication and perseverance of its citizens. While some individuals have made remarkable contributions, others have employed their labor to bring big ideas to fruition. Cornelius Vanderbilt, also known as the “builder” of America, is one of the most contentious figures in American business history.
On the one hand, Vanderbilt could be considered a “robber baron” due to his business strategies and decisions. On the other hand, he could be seen as a key figure in the development of the country’s transportation system, which became the foundation of America’s economic power.
Cornelius Vanderbilt (1794-1877) began his career as a ferry boat owner. He rapidly expanded his business by becoming a successful owner of several vessels and creating new routes. These routes served as vital transportation channels that facilitated the development of trade. For example, cotton from the South was transported to the North using these routes. It is important to note that Vanderbilt was adept at identifying opportunities and capitalizing on them.
He was always pushing the boundaries, which had a favorable influence on the development of the American economy. Ironically, when he was in the steamboat business, he had to confront a monopoly that existed on the Hudson River. He emerged victorious in that battle, which ensured his further growth and empowerment. Later, he became the creator of one of the largest monopolies in the history of the USA.
As mentioned earlier, Vanderbilt was a visionary who foresaw the uniqueness of railroads. He invested heavily in this industry and became the owner of a critical transportation facility, the New York and Harlem Railroad. This ownership allowed him to take advantage of his competitors since he appeared to have the key to the gateway of one of the most important ports in the country. As a result, he acquired numerous railroad companies at a very low price, which was one of the steps toward the creation of his monopoly.
Cornelius Vanderbilt employed an innovative business strategy by buying smaller companies instead of competing with them. Horizontal integration was an efficient business model since it ensured the rapid development of the industry since larger companies did not have to spend funds competing. Smaller companies, in turn, received access to the necessary resources.
The development of the network of railroads was one of the most important milestones that created the USA. Railroads became the backbone of trade, industries, and westward expansion. They were also vital in transporting supplies during the Civil War. In the post-war era, railroads facilitated the growth of numerous industries, such as the steel industry. New cities were established in new territories, and thousands of entrepreneurs had the opportunity to reach customers in the most distant areas.
It is crucial to note that to a certain extent, Cornelius Vanderbilt could be regarded as a robber baron, but to a larger extent, he was a captain of industry. For example, he created one of the largest monopolies, and such creations often have negative effects on the business environment and employees’ well-being. However, a monopoly was necessary at the time when transportation networks were required within a short period. Competition, particularly when it came to smaller companies, would have slowed down the development of railroads due to limited resources.
Moreover, Vanderbilt’s monopoly was one of the factors that led to the establishment and empowerment of labor unions, as well as important changes to the country’s legislature that regulated certain areas in business. For example, the Sherman Anti-Trust Act paved the way for other effective laws and regulations that make the modern business environment healthy. Labor unions became a significant force due to the need to oppose figures like Vanderbilt. People united, and their efforts were instrumental in bringing about these changes.