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Review of Big Business Vanderbilt = Railroads Vanderbilt
University
Carnegie = Steel Libraries, Museums
Rockefeller= Oil
Morgan = Banking
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Unfair Big Business Practices
How Big Business treated employees.Low pay, bad working conditions
What was ironic about how Vanderbilt, Carnegie, Rockefeller, and Morgan ran their businesses as opposed to what they ended up doing thie their money? They ruined other business, made them broke then donated money to charities.
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IntegrationVertical
Horizontal l
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How were corporations able to form monopolies?
Example: McDonald’s
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What ingredients are necessary to make a Big Mac?
beefcheese
lettuce
tomatoonion
ketchupsauce
bread
sesame seedspickles
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How does McDonald’s get all of their ingredients?
Do they own their own lettuce farms?
Do they own their own cattle ranches?
Do they own their own bakery?
Do they own their own ketchup plant?
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NO!They pay other companies to grow their produce, raise the
cattle, bake the bread, and produce all of the other ingredients they need.
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How much is a Big Mac?
How much are fries?
1. The price McDonald’s charges is driven, in part, by what they have to pay
these other companies…
2. … and in part by the need to attract customers who might, instead, go to the
competition.
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With what companies does McDonald’s compete for business?
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How can McDonald’s attract customers who might go to the competition?
1) Make a better product
2) Lower the price
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What can McDonald’s do to lower prices to attract more customers?
1) Use cheaper ingredients
2) Operate at a loss
3) Cut down on costs
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If McDonald’s was going to cut down on costs without sacrificing quality of
product or service, what could they do?
Buy up all the other companies they deal with, giving McDonald’s control of the entire process of making and delivering
hamburgers.
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Buy up the cattle ranches
Buy up the farms
Buy up the bakeries
Buy up the transport companies
Result: Lower long-term costs
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With lower costs, McDonald’s can lower their prices.
If they lower prices enough, what will happen to the competition?
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With no competition, what can McDonald’s do to prices?
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With high prices, consumers lose.
This is called a monopoly.
One company has taken control of the entire fast food hamburger market.
Companies like U.S. Steel and Standard Oil formed monopolies just like this.
The government recognized the damage to consumers and outlawed
monopolies.
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Some monopolies, however, are legal. What are some examples?
P,G & EPacific Bell
A,T & T Cable
San Jose Water Company
In other words, PUBLIC UTILITIES
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Why would public utilities be legalized monopolies?
If companies competed to sell us water, electricity, gas, or cable, each would have to have its own pipes and wires.
That would be a nightmare.
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So if monopolies are bad for consumers, aren’t they ALWAYS bad?To prevent the utility monopolies from
having too much control, the government regulates them.
The regulatory agency is called the Public Utilities Commission.
So monopolies are either illegal or regulated.
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Project – Invention Storyboard
Invention Storyboard Select one of these inventions. Create a storyboard and fill in the information to answer the statements.
Bell’s telephone Edison’s light bulb Edison’s phonograph
Life before the
invention
Positive change to
life
Long term positive
change to life Negative change
to life
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Project- Inventions that Changed the World
Inventions
Who was the inventor or inventors?
What did the new invention do?
Why was the invention important?
Sewing Machine
Automatic dishwasher
Gas-powered automobile
Camera
Airplane
•Directions:•Open your book to pages 184-185•Look at the timeline of American Inventions 1865-1895
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Project –Create a Big Business
NAME OF YOUR COMPANY ___________________________NAME OF YOUR PRODUCT ___________________________PRICE OF YOUR PRODUCT ___________________________Describe how you will use each of these inventions to:-Make your product-Sell your product-Advertise your product-Ship your product
Sewing Machine Camera
Telephone Light bulb
PhonographGas-powered automobile
Airplane
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Industrialization Test REVIEW____1. What is a robber baron?____2. What are unfair business practices?____3. In what industry did JP Morgan gain and control his riches? ____4. In what industry did Andrew Carnegie gain and control his riches? ____5. In what industry did John Rockefeller gain and control his riches?____6. How did Rockefeller, Carnegie, and Morgan treat his employees and competition? ____7. What did Rockefeller, Carnegie, and Morgan do with a lot of their money later in life? ____8. What is ironic about the way Rockefeller, Carnegie, and Morgan each ran their businesses as opposed to what they ended up doing with their money?
a. bankingb. low pay, bad working conditionsc. a negative term used to describe business men and bankers who have a monopoly and use unfair business practicesd. steel workinge. They took other businesses money, made them broke, then donated the money they took to charitiesf. donated a lot of itg. investing in oilh. lowering prices to get rid of competition and then raising the price once the competition is gone
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Industrialization Test Take the Post-Test