The core business that made Standard Oil a horizontally integrated monopoly was refining oil. John D. Rockefeller focused on acquiring competing oil refineries, consolidating them to control the refining process. By the late 1880s, Standard Oil controlled about 90% of U.S. oil refining capacity, which allowed it to dominate the market and set prices effectively
. This horizontal integration-controlling nearly all refineries-enabled Standard Oil to reduce competition by buying out or driving rivals out of business, often through aggressive pricing and secret railroad rebates that lowered transportation costs for Standard Oil but not for competitors
. After securing dominance in refining, Standard Oil expanded vertically into other parts of the oil business, such as transportation and distribution, but it was the refining segment that formed the foundation of its horizontally integrated monopoly
. In summary:
- Core business for horizontal integration: Oil refining
- How it worked: Acquiring and consolidating competing refineries to control refining capacity and prices
- Result: Monopoly over refining, controlling about 90% of the market by the late 1880s, which was the basis of Standard Oil’s dominance
