158-396: YPF S.A. ( Spanish pronunciation: ['i 'pe 'efe] , formerly Yacimientos Petrolíferos Fiscales ; English: "Fiscal Oilfields") is a vertically integrated , majority state-owned Argentine energy company , engaged in oil and gas exploration and production, and the transportation, refining, and marketing of gas and petroleum products. In the 2020 Forbes Global 2000 , YPF
316-531: A state monopoly on oil. The monopoly, however, was not absolute, being limited to oil exploration , exploitation and transport, but excluding selling and imports. Private firms opposed themselves to the law project, refusing to pay a 10% royalty. The bill was supported by President Marcelo Torcuato de Alvear but was ultimately blocked by the conservatives in the Senate . Oil nationalization became an important theme of Yrigoyen's electoral campaign of 1928, although
474-559: A 2.2% in gas, and a further 8.7% and 12.5% in oil and gas, respectively, during 2014. YPF announced the discovery in November 2011 of an 8071 km unconventional oil field, Vaca Muerta , with recoverable reserves of 22.8 billion barrels of oil equivalent, and potential to extend to an area of up to 30,000 km (11,600 mi). Its reserves of crude and natural gas, not including the new shale finds, fell 60% and 67% respectively between 1999 and 2011. The firm's new headquarters,
632-498: A computer and was then tested linguistically, psychologically, and for design potential." Along with the new name, Exxon settled on a rectangular logo using red lettering and blue trim on a white background, similar to the familiar color scheme on the old Enco and Esso logos. The rectangular Exxon logo, with the blue strip at the bottom and red lettering with the two 'X's interlinked together, was designed by noted industrial stylist Raymond Loewy . The interlinked 'X's are incorporated in
790-490: A factor in determining whether vertical integration is successful. There are many problems and benefits that vertical integration brings to an economic system . Problems that can stem from vertical integration can include large capital investments needed to set up and buy factories and maintain efficient profits. Rapid technology development can increase integration difficulties and further increase costs. The requirement of different business skills venturing into new portions of
948-565: A few days previously that were kept in ice remained in perfect condition. In 1924, Clarence Birdseye patented the "Birdseye Plate Froster" and established the General Seafood Corporation. In 1929, Birdseye's company and the patent were bought by Postum Cereals and Goldman Sachs Trading Corporation . It was later known as General Foods . They kept the Birdseye name, which was split into two words (Birds eye) for use as
1106-498: A helicopter crash of the firm's director, Raúl Ondarts, and the appointment of General Guillermo Suárez Mason in 1981 was followed by a period of severe mismanagement, moreover. Powerful as head of the First Army Corps (which committed many of the " Dirty War " atrocities), Suárez Mason installed many of his hard-line Army Intelligence colleagues in managerial posts at YPF. They in turn diverted large quantities of fuel into
1264-403: A large share of farm receipts, formerly assumed to go to the operator's family". Under production contracts, growers raise animals owned by integrators. Farm contracts contain detailed conditions for growers, who are paid based on how efficiently they use feed, provided by the integrator, to raise the animals. The contract dictates how to construct the facilities, how to feed, house, and medicate
1422-452: A major retailer, and Essendant , a dominant wholesaler. Before a wave of deregulation at the end of 20th century, most electric utilities were vertically integrated and provided electric generation , transmission , distribution , and sales. These were not just conglomerates with a common accounting department: there was just one profit center in sales, and costs of transmission and distribution were not separated. Partial deregulation in
1580-431: A move to emphasize the shortened brand name "Mobil" in promotional efforts, although Mobiloil continued as a single-word term until the 1970s. In select markets, Mobil Special was marketed in select areas as a midgrade gasoline. After a few years of advertising Mobil gasolines as "Megatane"-rated and as "High Energy" gasolines, Mobil began, in 1966, to promote both its Regular and Premium fuels as "Detergent Gasolines", due to
1738-473: A network of over 700 filling stations selling 178 million liters (47 million gallons) by 1930 – an 18% market share. Company revenues in 1930 reached US$ 25 million. The Petroleum Institute ( Instituto del Petróleo ) was created on 30 December 1929, and directed by Ricardo Rojas , the rector of the University of Buenos Aires . Foreseeing conflicts with US private companies, Mosconi proposed an agreement with
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#17327727527011896-591: A new and improved Mobilgas Special in response to trends toward new automobiles powered by high-compression engines that demanded higher and higher octane gasolines. The newest formulas of Mobilgas Special were advertised as offering "A Tune-Up in Every Tankful" due to a combination of chemicals known as the "Mobil Power Compound" which was designed to increase power, check pre-ignition ping, correct spark plug misfiring, control stalling and combat gumming up of carburetors. Later Mobil campaigns advertised Mobilgas as
2054-449: A new logo (created by New York graphic design firm Chermayeff & Geismar ). To celebrate its 100th anniversary in 1966, "Socony" was dropped from the corporate name. From 1936 to 1968, Mobil sponsored an economy run each year (except during World War II ) in which domestic automobiles of various manufacturers in a number of price and size classes were driven by light-footed drivers on cross-country runs. The Economy Run originated with
2212-684: A policy centerpiece. YPF was granted an exemption from steep oil import tariffs levied on private firms, and Article 40 of the Constitution of 1949 stipulated the nationalization of all energy and mineral resources. The deteriorating oil deficit led Perón to court foreign investment in the sector as early as 1947, however, when an oil drilling contract was signed by YPF with U.S. firm Drilexco. Total exploration doubled, and significant reserves in Salta Province were developed. A more controversial joint venture with Standard Oil of California
2370-473: A portion of the syndication revenues in order for a show to gain a spot on the schedule if it was produced by a studio without common ownership. In response, the studios fundamentally changed the way they made movies and did business. Lacking the financial resources and contract talent they once controlled, the studios now relied on independent producers supplying some portion of the budget in exchange for distribution rights. Certain media conglomerates may, in
2528-457: A record 190 million in 1998; of the latter total, 32 million were produced by Maxus operations in Ecuador and elsewhere. Madrid -based multinational corporation Repsol S.A. purchased 98% of YPF in 1999 in two stages: a 15% share sold by the national government for US$ 2 billion, and a further 83% for over US$ 13 billion including all remaining public sector shares (10%, equally divided between
2686-466: A result, the former Mobil's shareholders receives about 30% in the merged company while the stake of former Exxon's shareholders was about 70%. The head of Exxon, Lee Raymond , remained the chairman and chief executive of the new company and Mobil chief executive Lucio Noto became vice-chairman. The merger of Exxon and Mobil was unique in American history because it reunited the two largest companies of
2844-571: A royalty bonanza, which financed record investments. These in turn led a doubling of YPF production to 65 million barrels; including the private sector, Argentina's oil production thus nearly tripled to 98 million barrels by 1962, and despite higher consumption, imports fell to merely one sixth of total demand. These contracts created a controversy referred to by Frondizi himself as the " oil battle ," and were ultimately cancelled by President Arturo Illia in 1963 over concerns that YPF would be deprived of adequate returns for its exploration investments; of
3002-785: A sale branch for the Netherlands and Belgium, American Petroleum Company, was established in Rotterdam . At the same year, a sale branch for Italy, Società Italo Americana pel Petrolio , was established in Venice . The Standard Oil Trust was dissolved under the Sherman Antitrust Act in 1892; however, it reemerged as the Standard Oil Interests. In 1893, the Chinese and the whole Asian kerosene market
3160-406: A sharp rise in foreign debt to maintain. YPF debts thus rose 142-fold during Suárez Mason's tenure, at the end of which in 1983 the company recorded a US$ 6 billion loss (the largest in the world at the time). YPF nonetheless remained the 365th largest firm in the world, with sales of over US$ 4 billion in 1992. Argentine President Carlos Menem initiated the privatization of YPF through an IPO on
3318-809: A similar manner, own television broadcasters (either over-the-air or on cable), production companies that produce content for their networks, and also own the services that distribute their content to viewers (such as television and internet service providers). AT&T , Bell Canada , Comcast , Sky plc , and Rogers Communications are vertically integrated in such a manner—operating media subsidiaries (such as WarnerMedia , Bell Media , NBCUniversal , and Rogers Media ), and provide " triple play " services of television, internet, and phone service in some markets (such as Bell Satellite TV / Bell Internet , Rogers Cable , Xfinity , and Sky's satellite TV and internet services). Additionally, Bell and Rogers own wireless providers, Bell Mobility and Rogers Wireless , while Comcast
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#17327727527013476-497: A slower information processing rate, with the side effect of making the company so slow that it could not react quickly. Birds Eye did not take advantage of the growth of supermarkets until ten years after the competition did. The already-developed infrastructure did not allow Birdseye to quickly react to market changes. In order to increase profits and gain more market share, Alibaba , a China-based company, has implemented vertical integration deepening its company holdings to more than
3634-514: A substantial part of the joint venture's finished lubricants business, while ExxonMobil acquired other base oil plants and a part of the finished lubricants business. The stake in Aral was sold to Vega Oel, later acquired by BP. The European Commission also demanded divesting of Mobil's MEGAS and Exxon's 25% stake in the German gas transmission company Thyssengas. MEGAS was acquired by Duke Energy and
3792-505: A supply chain. Operational routines also become more consistent and certain as the management of these firms gradually merge. Vertically integrated firms rarely need to worry about the sufficiency in their supply of materials because they generally control the facilities that provide them. A vertically integrated company also creates high barriers of entry into their respective economy, eliminating most potential competition. Implementing vertical integration can be beneficial in that it reduces
3950-451: A system in which mass production was most efficient. The model called for the manufacture of additional devices, all of which had carefully-curated designs by Ford engineers. Instead of passing these instructions and duties off to external manufacture firms, vertical integration was exercised within the corporation. This allowed for manageable division of labor, decreased costs in delay and exchange of goods, and organized updates of each firm in
4108-416: A trademark. Birdseye was paid $ 20 million for the patents and $ 2 million for the assets. Birds Eye was one of the pioneers in the frozen food industry. During these times, there was not a well-developed infrastructure to produce and sell frozen foods. Hence Birds Eye developed its own system by using vertical integration. Members of the supply chain, such as farmers and small food retailers, could not afford
4266-468: A vertically integrated strategy has helped Apple become a leading platform company; integrating their software (through APIs for third-party application developers) with their own hardware, across all the devices and services they offer. Vertical integration allows Apple to control production from beginning to end. Other companies may follow the Apple model, but may not see success for some time, both due to
4424-424: A wave of layoffs that returned employment levels to around 35,000 by 1979. The military government was openly hostile to YPF's paramount position in the oil industry, however. The company lost money every year after 1975 and by 1981 was US$ 4.1 billion in debt. YPF losses resulted, at least in large part, from policy decisions beyond its control. Government policy after 1976 kept oil prices well below inflation, with
4582-533: Is a form of vertical integration when purchasing departments take over the former role of wholesalers to source products. For vertical integration to succeed, managers must be able to adapt their managerial approach to compliment the changes in functional activities that their vertical shift accompanies. Managers should make sure that their firm can take advantage of existing functional knowledge through organisation, and simultaneously allow new functional knowledge to develop. However, environmental possibilities can be
4740-458: Is a more efficient business with lower costs and more profits. On the undesirable side, when vertical expansion leads toward monopolistic control of a product or service then regulative action may be required to rectify anti-competitive behavior. Related to vertical expansion is lateral expansion , which is the growth of a business enterprise through the acquisition of similar firms, in the hope of achieving economies of scale . Vertical expansion
4898-432: Is also known as a vertical acquisition. Vertical expansion or acquisitions can also be used to increase sales and to gain market power. The acquisition of DirecTV by News Corporation is an example of forwarding vertical expansion or acquisition. DirecTV is a satellite TV company through which News Corporation can distribute more of its media content: news, movies, and television shows. The acquisition of NBC by Comcast
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5056-459: Is an arrangement in which the supply chain of a company is integrated and owned by that company. Usually each member of the supply chain produces a different product or (market-specific) service, and the products combine to satisfy a common need. It contrasts with horizontal integration , wherein a company produces several items that are related to one another. Vertical integration has also described management styles that bring large portions of
5214-449: Is an example of an industry in which without vertical integration, would not be able to develop efficiently. In order to implement a telecommunications system that connected cities across a nation reliably, vertical integration was called upon. This strategic move ensured that the wiring, manufacture, and management of the system was consistent and functional across a state. Apple has used the vertical integration strategy for 35 years and
5372-839: Is an example of backward vertical integration. For example, in the United States, protecting the public from communications monopolies that can be built in this way is one of the missions of the Federal Communications Commission . Scholars' findings suggest that a reduction in inefficiencies caused by the market vertical value chains, including downstream prices or double mark-up, can be negated with vertical integration. Application in more complex environments can help firms overcome market failures (markets with high transaction costs or assets specificities) Scholars also identified potential risks and boundaries which may occur under vertical integration. This includes
5530-473: Is one method of avoiding the hold-up problem . A monopoly produced through vertical integration is called a vertical monopoly : vertical in a supply chain measures a firm's distance from the final consumers; for example, a firm that sells directly to the consumers has a vertical position of 0, a firm that supplies to this firm has a vertical position of 1, and so on. Vertical integration is often closely associated with vertical expansion which, in economics ,
5688-587: Is one of the most successful companies in the technology industry. Apple centered its business strategy on its own development of integrated hardware, software, and latterly services. They design most of their products in-house, and do not allow their hardware and operating system to be licensed out, which allows the company to apply its company vision to its products. Large companies such as Apple are more likely than smaller companies to employ vertical integration, as they have more resources to manage each stage of production (e.g. major expansion and funding). Implementing
5846-410: Is owned by Valero Energy . In Libya, Jersey Standard made its first major oil discovery in 1959. Exxon Chemical Company (originally named Enjay Chemicals) was established in 1965. In 1955, when Fortune released its first Fortune 500 list, Jersey Standard both before and after it rebranded as Exxon was one of the top five companies on Fortune 500 between the first edition of the list and
6004-402: Is partnered with Verizon Wireless for an Xfinity-branded MVNO . Similarly, Sony has media holdings through its Sony Pictures division, including film and television content, as well as television channels, but is also a manufacturer of consumer electronics that can be used to play content from itself and others, including televisions, phones, and PlayStation video game consoles. AT&T
6162-402: Is removed and a corporation has the power to control all firms in its supply chain. One benefit is that the implementation of vertical integration can yield increased profit margins or eliminate the leverage that other firms or buyers may have over the firm. It allows improved coordination between production and distribution firms and decreases the cost of exchange of goods between firms within
6320-481: Is the first ever vertical integration where a mobile phone company and a film studio company are under same umbrella. Vertical integration through production and marketing contracts have also become the dominant model for livestock production. Currently, 90% of poultry, 69% of hogs, and 29% of cattle are contractually produced through vertical integration. The USDA supports vertical integration because it has increased food productivity. However, "... contractors receive
6478-491: Is the growth of a business enterprise through the acquisition of companies that produce the intermediate goods needed by the business or help market and distribute its product. A firm may desire such expansion to secure the supplies needed by the firm to produce its product and the market needed to sell the product. Such expansion can become undesirable from a system-wide perspective when it becomes anti-competitive and impede free competition in an open marketplace. The result
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6636-443: The 1980s oil glut Exxon's internal report projected that solar would not become viable until 2012 or 2013. Consequently, Exxon sold Solar Power Corporation in 1984. In the late 1960s, Jersey Standard entered into the nuclear industry . In 1969, it created a subsidiary, Jersey Nuclear Company (later: Exxon Nuclear Company), for manufacturing and marketing of uranium fuel, which was to be fabricated from uranium concentrates mined by
6794-538: The Arab-American Oil Company (Aramco). Humble Oil became a wholly-owned subsidiary of Jersey Standard and was reorganized into the United States marketing division of Jersey Standard in 1959. In 1967, Humble Oil purchased all remaining Signal stations from Standard Oil Company of California (today known as Chevron) In 1969, Humble Oil opened a refinery in Benicia, California , of which today
6952-468: The Bell System , Apple , the U.S. entertainment studios, the U.S. meat industry, Ford Motor Company , CVS , and Amazon demonstrate vertical merging. Other examples like Alibaba and EssilorLuxottica cover vertical integration in other nations. During a hunting trip American explorer and scientist Clarence Birdseye discovered the beneficial effects of " quick-freezing ". For example, fish caught
7110-503: The East Texas Oil Field . As a part of the cooperation between Jersey Standard and IG Farben, a joint company, Standard I.G. Company, was established with Jersey Standard having a stake of 80%. IG Farben transferred rights to the hydrogenation process outside of Germany to the joint venture in exchange of $ 35 million stake of Jersey Standard shares. In 1930, the joint company established Hydro Patents Company to license
7268-681: The Ethyl Gasoline Corporation . In 1927, Jersey Standard signed a 25-years cooperation agreement with IG Farben for the coal hydrogenation research in the United States. Jersey Standard assumed this cooperation to be beneficial as it believed the United States oil reserves to be exhausted in the near future and that the coal hydrogenation would give an access for producing synthetic fuels . It erected synthetic fuel plants in Bayway , Baton Rouge , and Baytown (unfinished). The interest in hydrogenation evaporated after discovery of
7426-651: The Gilmore Oil Company of California in 1936 (which was purchased by Socony-Vacuum in 1940) and later became the Mobilgas Economy Run, and still later the Mobil Economy Run. The cars driven in the economy run were fueled with Mobil gasoline , and Mobiloil and lubricants were also used. The vehicles in each class that achieved the highest fuel economy numbers were awarded the coveted title as the Mobilgas Economy Run winner. Through
7584-564: The Johnny Green orchestra. In 1931, Socony merged with Vacuum Oil Company to form Socony-Vacuum. Vacuum Oil had used "Mobiloil" branding for automobile lubricating oil since 1904, and by 1918 it became recognizable enough that the company filed for its registration as a trademark ; it was registered in 1920. In 1933, Socony-Vacuum and Jersey Standard (which had oil production and refineries in Indonesia) merged their interests in
7742-471: The Maxxum 7000 ) lenses and flashes used a logo with the X's crossed in 'MAXXUM'. Exxon considered this a violation of their trademark, and as a result, Minolta was allowed to distribute cameras already produced, but was forced to change the stylistic 'XX' and implement this as a change in new production. ExxonMobil similarly sued 21st Century Fox over its cable channel FXX , but the parties agreed to dismiss
7900-492: The Mountain West , Great Plains , and Southeast . An economic theory is a framework that defines how a particular economic system functions. Economists develop principles in which an economy adheres to, which provides insight onto the relationships between economic events, markets, companies, and the government. In economic theory, vertical integration has been studied in the literature on incomplete contracts that
8058-558: The Repsol-YPF Tower , was designed by César Pelli and inaugurated in 2008. Notes: unless specified. Three year periods are averages. Output data from 1995 to 2011 includes Maxus Energy and other overseas units, typically around 20% of YPF's worldwide total. Exchange rate from IMF. * excludes Maxus Energy. Vertical integration In microeconomics , management and international political economy , vertical integration , also referred to as vertical consolidation,
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#17327727527018216-518: The Soviet state company Amtorg , which was to allow Argentina to import 250,000 tons of petroleum each year, paid by trade with leather, wool , tannin and mutton . The agreement was to be made official in September 1930, along with the complete nationalization of oil resources; but on 6 September 1930, Yrigoyen was deposed by a military coup headed by General José Félix Uriburu , and the project
8374-706: The Yrigoyenistas focused their criticism on Standard Oil of New Jersey, abstaining themselves from attacking British Empire interests, to which Argentina's economy was closely linked (in particular Royal Dutch Shell ). Following Yrigoyen's victory in the 1928 elections , YPF, still directed by Enrique Mosconi, reduced oil prices in May 1929, leading to the cheapest petroleum in the world and to an important increase in YPF's sales compared to its rival private companies, forcing them to also lower their prices. Mosconi also reduced
8532-578: The coal liquefaction process called the Exxon Donor Solvent Process . In April 1980, Exxon opened a 250-ton-per-day pilot plant in Baytown, Texas . The plant was closed and dismantled in 1982. In late 1960s Jersey Standard task force was looking for projects 30 years in the future. In April 1973, Exxon founded Solar Power Corporation , a wholly owned subsidiary for manufacturing of terrestrial photovoltaic cells . After
8690-426: The developmentalist economic policy advanced by Frondizi, this policy was made with the caveat that oil and gas resources themselves would be renationalized. Thirteen contracts were signed with mainly U.S. firms, whereby each contractor would earn 40% of the revenues produced from the new wells. Private production, which had virtually ceased, grew to become one third of the nation's total. YPF itself benefited by way of
8848-765: The oil shale industry by buying a 60% stake in the Colony Shale Oil Project in Colorado, United States, and 50% stake in the Rundle oil shale deposit in Queensland , Australia. On May 2, 1982, Exxon announced the termination of the Colony Shale Oil Project because of low oil-prices and increased expenses. In 1985, Minolta introduced an autofocus SLR camera system named "Maxxum" in the United States. Originally, cameras (such as
9006-474: The "Little Three", Universal Studios , Columbia Pictures , and United Artists , produced and distributed feature films but did not own theaters. The issue of vertical integration (also known as common ownership) has been the main focus of policy makers because of the possibility of anti-competitive behaviors affiliated with market influence. For example, in United States v. Paramount Pictures, Inc. ,
9164-420: The "New Car Gasoline" following extensive testing during the annual Mobilgas Economy Run. In 1958, Mobil fueled the first transatlantic Boeing 707 commercial flight using its aviation fuel. The flight was operated by Pan Am , and the flight flies from New York City to London . In 1962, the gasoline product lines marketed as Mobilgas and Mobilgas Special were rebranded as Mobil Regular and Mobil Premium in
9322-507: The 1930s to ban the Esso brand in those states. In those territories where the ban was in force, Jersey Standard instead marketed its products under the Enco or Humble names. In 1947, Jersey Standard and Royal Dutch Shell formed the joint venture Nederlandse Aardolie Maatschappij BV for oil and gas exploration and production in the Netherlands. In 1948, Jersey Standard acquired interests in
9480-460: The 22 percent, and would offer the company's remaining stockholders the same price, at $ 45 a share. In March 1984, Superior Oil was in the process of being acquired by Mobil for $ 5.7 billion. At that time the company was the nation's largest independent oil producer. The takeover was completed in September 1984, with Superior, then based in Houston, becoming a wholly owned subsidiary of Mobil. It
9638-561: The 51% of YPF nationalized. YPF also acquired a controlling stake in Metrogas (the nation's largest gas distributor) in November 2012. A joint exploratory venture for the development of tight oil and shale gas at the Vaca Muerta field was signed with Chevron Corporation on 16 July 2013. Following its renationalization, rapidly rising investment levels at YPF have been funded mostly via internal financing , by Chevron, and by
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#17327727527019796-608: The Asia-Pacific region, Jersey Standard has established through its Dutch subsidiary an exploration and production company Nederlandsche Koloniale Petroleum Maatschappij in 1912. In 1922, it found oil in Indonesia and in 1927, it built a refinery in Sumatra . It had oil production and refineries but no marketing network. In 1924, Jersey Standard and General Motors pooled its tetraethyllead -related patents and established
9954-546: The Far East into a 50–50 joint venture. Standard-Vacuum Oil Co., or "Stanvac", operated in 50 countries, including New Zealand, China, and the region of East Africa , before it was dissolved in 1962. In 1935, Socony Vacuum Oil opened the huge Mammoth Oil Port on Staten Island which had a capacity of handling 250 million gallons of petroleum products a year and could transship oil from ocean-going tankers and river barges. In 1940, Socony-Vacuum's gasoline buying practices led to
10112-570: The New York and other stock exchanges on 28 June 1993, at a value of US$ 3 billion for stock equal to a 45% share in the company. During the 18 months prior to the IPO, YPF underwent a massive restructuring process led by its new CEO José Estenssoro, who had been appointed by President Menem. The staff of YPF was reduced from 52,000 to 10,600 through layoffs agreed with unions and outsourcing of services to companies established by former YPF employees during
10270-625: The Petersen Group, had financed their initial purchase of 15% of the stock with a vendor's loan from Repsol for €1.5 billion. The 2008 agreement required Repsol to buy back shares owned by the Group and to assume the loan should the Madrid-based firm lose majority control of YPF. Sebastián Eskenazi indicated however that the group would forgo this option. The Senate of Argentina approved the takeover on 26 April with 63 votes in favor of
10428-730: The Standard Oil Company of Ohio. In 1882, it together with its affiliated companies was incorporated as the Standard Oil Trust with Standard Oil Company of New Jersey and Standard Oil Company of New York as its largest companies. The Anglo-American Oil Company was established in the United Kingdom in 1888. In 1890, Standard Oil, together with local ship merchants in Bremen established Deutsch-Amerikanische Petroleum Gesellschaft (later: Esso A.G.). In 1891,
10586-839: The Standard Oil trust. The merger was approved in the European Union by the European Commission on September 29, 1999, and by the United States Federal Trade Commission on November 30, 1999. As a condition for the Exxon and Mobil merger, the European Commission ordered to dissolve Mobil's partnership with BP, as also to sell its stake in Aral. As a result, BP acquired all fuels assets, two base oil plants, and
10744-487: The Supreme Court ordered the five vertically integrated studios to sell off their theater chains and all trade practices were prohibited ( United States v. Paramount Pictures , Inc., 1948). The prevalence of vertical integration wholly predetermined the relationships between both studios and networks and modified criteria in financing. Networks began arranging content initiated by commonly owned studios and stipulated
10902-473: The U.S. The vertical merge allowed CVS-Aetna to regulate more of the healthcare and delivery chain and gave them the ability to provide higher quality care to consumers. One of the most significant advantages to this integration is the reduction in costs for healthcare. Amazon.com has been criticized for being anti-competitive as both an owner and participant of its dominant online marketplace. In office products, Sycamore Partners owns both Staples, Inc. ,
11060-493: The US in 1978 ( PURPA ) forced the utilities to buy electricity outside if the rates were competitive; this gave rise to independent power producers . The other deviation from the vertical integration model were local distribution companies in some towns and regions. In the US 250 vertically integrated companies provided 85% of electrical generation. As of 2022, this "public utility" model was still utilized in some US states, mostly in
11218-486: The United States on January 1, 1973. Under the guidance of its paid consultants at Boston Consulting Group, Exxon announced in the 1970s that it would compete against IBM and Xerox. The mantra was "Information Is the Oil of the 21st Century". It launched Exxon Office Systems, and the early 1980s, Exxon retailed its fax machines and software through Sears . The venture failed since "the giant oil company failed to fully realize
11376-543: The World Bank ICISD for arbitration. The Argentine government and Repsol reached agreement in principle on compensation in November 2013, and on 25 February 2014, Repsol announced final agreement that the Argentine government would provide Repsol with guaranteed Argentine government bonds of varying maturities, the nominal amount varying to assure that Repsol would in fact receive US$ 5 billion in compensation for
11534-411: The animals, and how to handle manure and dispose of carcasses. Generally, the contract also shields the integrator from liability. Jim Hightower , in his book, Eat Your Heart Out , discusses this liability role enacted by large food companies. He finds that in many cases of agricultural vertical integration, the integrator ( food company ) denies the farmer the right of entrepreneurship. This means that
11692-452: The bylaw change. He reversed his position on the bylaws November 1983 and disclosed his intention to sell his stake. Several months before March 1984, the Keck family, which owned a total of about 22 percent of the stock of Superior, approached Mobil Corporation (now part of ExxonMobil) with an offer to sell the family stock. In March 1984, Mobil announced that it had "secretly" agreed to buy
11850-488: The company for US$ 1.3 billion on 4 May 2011. A majority of the firm's shares (58%) remained under the control of Repsol, while 16% remained in private portfolios; the Argentine Government retained the golden share. In 2014, Repsol exited the Argentine market, giving up its stake in YPF. Argentine international energy trade recorded an imbalance of US$ 3 billion in 2011, the first negative figure since 1987, and
12008-540: The company traces its roots as far back as 1866 to the founding of the Vacuum Oil Company , which would become part of ExxonMobil through its own merger with Mobil during the 1930s. The present name of the company comes from a 1999 merger of Standard Oil's New Jersey and New York successors, which adopted the names Exxon and Mobil respectively throughout the middle of the 20th century. Because of Standard Oil of New Jersey's ownership over all Standard Oil assets at
12166-458: The company while expanding its reach outside Argentina, acquiring Maxus Energy Corporation of Dallas for US$ 740 million in 1995. Estenssoro died in a plane crash in Ecuador , where Maxus maintained wells, in May of that year. His policy of high exploration investments was maintained by his successor, Nells León, and reserves expanded by 50% while production rose from 109 million barrels in 1993 to
12324-493: The company, Mosconi advocated economic independence and starting in 1928, nationalization of oil supplies ; the latter, however, was never achieved due to a 1930 military coup against Yrigoyen backed by, among others, foreign oil interests. YPF was privatized under president Carlos Menem and was bought by the Spanish firm Repsol in 1999; the resulting merged company was called Repsol YPF. The renationalization of 51% of
12482-582: The company, saying he wanted to sell his stake in Superior Oil Company . In late 1983, an "uneasy truce" was reached between two major stockholders, former chairman Howard B. Keck and his sister Willametta Keck Day. Day had in April of that year "led a stockholder revolt" leading to changes in Superior's bylaws, requiring the company's management to consider takeover bids. Howard Keck had opposed
12640-659: The consequence that costs increased faster than income. YPF also bore an extremely heavy tax burden, as 68.4% of its revenues were paid as tax to the national and provincial governments, as well as a long list of state agencies that included the National Energy Fund, the National Highway Council, and the Provincial Road Fund. Another serious drain resulted from the failure of other state enterprises such as Argentine Railways and
12798-1092: The conservative Prime Minister Raymond Poincaré . YPF's creation was followed by the creation of ANCAP in Uruguay (1931), YPFB in Bolivia (1936), Pemex in Mexico (1938), ENAP in Chile (1950), and Petrobras in Brazil (1953). Mosconi served as YPF's first director. YPF bought its first tanker in the United States in 1923, and built not only several extracting facilities, but whole towns and cities, such as Comodoro Rivadavia; Caleta Olivia in Santa Cruz ; Plaza Huincul in Neuquén ; and General Mosconi in Salta . Bolstered by production in Comodoro Rivadavia,
12956-399: The cost of entering the market and taking on the currently successful incumbent, but also by innovating their products to make them more appealing in the marketplace than the current incumbent. Vertical integration requires a company to focus not only on its core business, but also on several difficult areas such as sourcing materials and manufacturing partners, distribution, and finally selling
13114-701: The costs were too high. On March 24, 1989, the Exxon Valdez oil tanker struck Bligh Reef in Prince William Sound , Alaska and spilled more than 11 million US gallons (42,000 m ) of crude oil. The Exxon Valdez oil spill was the second largest in U.S. history, and in the aftermath of the Exxon Valdez incident, the U.S. Congress passed the Oil Pollution Act of 1990 . An initial award of US$ 5 billion punitive
13272-472: The detergency of its Super Unleaded gasoline in 1984 to prevent formation or deposit build-ups of the injectors but also remove existing deposits as well in normal driving. At the end of the 1980s Mobil sold its fuel stations in Norway, Sweden, and Denmark to Norsk Hydro , who converted them into Hydro stations. In October 1983, Howard B. Keck stepped down as a director, while still controlling 18.4 percent of
13430-539: The director's newly established company Sol Petróleo , a dummy corporation used by Suárez Mason and his appointees for embezzlement as well as to divert funds to the Contras and the fascist organization P2 (to which the director belonged). Suárez Mason had YPF borrow heavily not only to cover such asset stripping but also at the behest of Economy Minister José Alfredo Martínez de Hoz , whose bid for currency strength and policy of financial deregulation required
13588-405: The distance that separates the suppliers and customers from the resources or information, which can then boost profits and efficiency. There are internal and external society-wide gains and losses stemming from vertical integration, which vary according to the state of technology in the industries involved, roughly corresponding to the stages of the industry lifecycle. Static technology represents
13746-464: The e-commerce platform. Alibaba has built its leadership in the market by gradually acquiring complementary companies in a variety of industries including delivery and payments. One of the earliest, largest and most famous examples of vertical integration was the Carnegie Steel company. The company controlled not only the mills where the steel was made, but also the mines where the iron ore
13904-670: The entire value chain, but do not do everything in-house (e.g. assembly of iPhones by manufacturing partner Foxconn ). From the early 1920s through the early 1950s, the American motion picture had evolved into an industry controlled by a few companies, a condition known as a "mature oligopoly ", as it was led by eight major film studios , the most powerful of which were the "Big Five" studios: MGM , Warner Brothers , 20th Century Fox , Paramount Pictures , and RKO . These studios were fully integrated, not only producing and distributing films, but also operating their own movie theaters ;
14062-613: The exploitation of Salta's oil by YPF, offering 13% royalties for the province. Corvalán, allied with the Standard Oil of New Jersey , rejected Mosconi's proposal, however, referring to the concept of "provincial autonomy". This refusal led Mosconi to evolve in favor of the nationalization of oil supplies in order to strengthen Argentina's independence. The first YPF oil refinery was inaugurated in December 1925 in La Plata , and
14220-556: The farmer can only sell under and to the integrator. These restrictions on specified growth, Hightower argues, strips the selling and producing power of the farmer. The producer is ultimately limited by the established standards of the integrator. Yet, at the same time, the integrator still keeps the responsibility connected to the farmer. Hightower sees this as ownership without reliability. Under marketing contracts, growers agree in advance to sell their animals to integrators under an agreed price system. Generally, these contracts shield
14378-399: The firm was initiated in 2012 by President Cristina Fernández de Kirchner . The government of Argentina eventually agreed to pay $ 5 billion compensation to Repsol. According to Bloomberg , the board of directors include Matteo Reggio and Miguel Gutiérrez. The company, specializing in the exploration, production, refining and commercialization of petroleum, had its origin in 1907, when oil
14536-433: The firm had caused declines in output. Governors in six fossil-fuel producing provinces subsequently revoked YPF leases representing a fifth of its oil production. Citing Brazilian oil giant Petrobras as an example, the president announced the introduction of a bill on 16 April 2012, for the renationalization of YPF : the national government would purchase a controlling 51% share, with ten provincial governments receiving
14694-566: The firm produced 2.2 million barrels in its first year of operation (1922); this represented over three-quarters of domestic production and nearly a fourth of Argentina's oil consumption that year. Contracts signed in 1923 with Bethlehem Steel allowed YPF to begin the production of gasoline and kerosene . Mosconi, who had previously been in charge of the Aeronautics division of the Army , proposed to Joaquín Corvalán, governor of Salta Province,
14852-593: The first offshore oil production platform made out of concrete. Mobil credits Beryl A with being the prototype for other concrete-based deepwater oil platforms in the North Sea . As automakers were switching en masse from carbureted to fuel-injected engines during the early to mid-1980s, and the detergent additives that existed in most available gasolines proved not to be enough to prevent injection clogging, leading to drivability problems, Mobil received accolades from General Motors and other automakers for increasing
15010-619: The foreign firms which had taken part in the 1958 bids, only Amoco remained. The cancellations cost US$ 50 million in indemnity payments, though they proved fortuitous after the company's discovery of the Puesto Hernández field in 1965. Puesto Hernández, near Rincón de los Sauces , Neuquén Province , was later declared the "national energy capital" due to its having at the time around half of Argentina's reserves of oil and natural gas. This discovery allowed YPF output to rise by 50% between 1965 and 1968 to 95 million barrels, its share of
15168-493: The fuel to company-owned retail stations, for sale to consumers. Standard Oil is a famous example of both horizontal and vertical integration, combining extraction, transport, refinement, wholesale distribution, and retail sales at company-owned gas stations. Telephone companies in most of the 20th century, especially the largest (the Bell System ) were integrated, making their own telephones , telephone cables , telephone exchange equipment and other supplies. The Bell System
15326-411: The high cost of equipment, so Birdseye provided it to them. Until now, Birds Eye has faded slowly because they have fixed costs associated with vertical integration, such as property, plants, and equipment that cannot be reduced significantly when production needs decrease. The Birds Eye company used vertical integration to create a larger organization structure with more levels of command. This produced
15484-454: The hydrogenation process in the United States. The agreement with IG Farben gave to Jersey Standard access to patents related to polyisobutylene which assist Jersey Standard to advance in isobutolene polymerization and to produce the first butyl rubber in 1937. As the agreement with IG Farben gave to the German company a veto right of licensing chemical industry patents in the United States, including patent for butyl rubber, Jersey Standard
15642-438: The inclusion of additives designed to clean carburetors and various internal engine parts. During the early 1970s, Mobil ran a TV commercial featuring a character known as "Mr. Dirt" to show the ruinous effects that dirt had on automotive engines for which a tank of Mobil Detergent Gasoline could provide a cure and preventive medicine against damage that could lead to costly repairs. The year 1975 saw Mobil Oil construct Beryl A,
15800-436: The incomplete contracting setup. In these extended models, vertical integration can sometimes be optimal even if only the seller has to make an investment decision. Standard Oil of New Jersey ExxonMobil , an American multinational oil and gas corporation presently based out of Texas , has had one of the longest histories of any company in its industry. A direct descendant of John D. Rockefeller 's Standard Oil ,
15958-401: The integrator from liability for the grower's actions and the only negotiable item is a price. In the United States new automobiles can not be sold at dealerships owned by the same company that produced them but are protected by state franchise laws. Ford Motor Company vertically integrated due to high demand for their Model T automobile. With the development of Model T, the company required
16116-572: The leading oil driller in Argentina). YPF shares of total output fell 8 points to 34% in oil, and 12 points to 23% in natural gas; its declines in output represented 54% of lost oil production and 97% in the case of natural gas. The company's oil production had declined by a further 7%, and gas by 9%, during 2011. Production declines of 6% annually under Repsol were reversed following the renationalization, however. Amid sharp increases in profitability and investment, output in 2013 rose by 3.4% in oil and
16274-445: The major antitrust law case United States v. Socony-Vacuum Oil Co. The case originated with Socony-Vacuum's practices of organizing a cartel among the "major" oil companies in which they bought oil—known as "hot oil"—from independent producers and stored the surplus in tanks to limit the supply of oil available on the market and keep the price of oil artificially high. In its decision, the U.S. Supreme Court ruled that regardless of
16432-467: The measure, three opposing it and four abstentions. The Chamber of Deputies in turn approved the bill on 4 May with 208 votes out of 257 and six abstentions. The president signed the renationalization into law on 5 May. Miguel Galluccio , an Argentine petroleum engineer with experience at both YPF and at oilfield services leader Schlumberger as president of its production management division in London ,
16590-552: The mineral department of Humble Oil (later: Exxon Minerals Company). In 1970, Jersey Nuclear opened a nuclear fuel manufacturing facility, now owned by Framatome , in Richland, Washington . The company started surface mining of uranium ore in Converse County, Wyoming , in 1970, solution mining in 1972, and underground mining in 1977. Uranium ore processing started in 1972. The facility was closed in 1984. In 1972, Exxon
16748-510: The modern-day ExxonMobil corporate logo; in mid-2016, as part of a corporate rebranding accompanying the launch of ExxonMobil's "Synergy" fuel products, the mixed-case Exxon wordmark from the ExxonMobil corporate logo became the brand's main logo. The current form of the Exxon logo was made on March 3, 1972, by New York-based Louis Liska. Exxon replaced the Esso , Enco , and Humble brands in
16906-465: The nation and the provinces) as well as most of the outstanding investor shares. The union of the two companies took on the name Repsol YPF ; YPF would represent 40% of the new firm's reserves and over 50% of its production. The Petersen Group (property of the Eskenazi family of Buenos Aires) entered into a partnership with Repsol in 2007 by acquiring a 15% stake in YPF; the group bought another 10% of
17064-666: The nation's oil output growing from two-thirds to three-fourths. New oil field rental contracts were signed following a 1967 policy change enacted by President Juan Carlos Onganía which had the goal of achieving self-sufficiency in oil by 1975. Regaining its monopoly on oil imports in 1971 (which still averaged around 15 million barrels), YPF retained a majority of production (75%), as well as refining and distribution (60%), of petroleum in Argentina. The firm operated 7 refineries and 3,000 service stations by 1977, while production reached 118 million barrels. Perón's return to Argentina and to
17222-410: The national airline to pay YPF for their fuel in full and on time. These intergovernmental accounts represented 20% of YPF's sales and were as much as ten years in arrears. The tax policy of the military government followed the same path as its civilian predecessors, a path that regarded YPF as a convenient source of funds to ease the country's chronic and serious fiscal deficit position. The death in
17380-465: The nationalization of its assets in Mexico in 1938. Since the 1911 Standard Oil Trust breakup, Jersey Standard used the trademark Esso , a phonetic pronunciation of the initials "S" and "O" in the name Standard Oil, as one of its primary brand names. However, several of the other Standard Oil spinoffs objected to the use of that name in their territories, and successfully got the U.S. federal courts in
17538-710: The next few decades, Jersey Standard grew significantly. John Duston Archbold was the first president of Jersey Standard. Archbold was followed by Walter C. Teagle in 1917, who made it the largest oil company in the world. In 1919, Jersey Standard acquired a 50% share in Humble Oil & Refining Co. , a Texas oil producer. In 1920, it was listed on the New York Stock Exchange. In the following years it acquired or established Tropical Oil Company of Colombia (1920), Standard Oil Company of Venezuela (1921), and Creole Petroleum Company of Venezuela (1928). In
17696-434: The now merged company. Within healthcare systems, horizontal integration is generally much more prominent. However, in the United States, major vertical mergers have included CVS Health 's purchase of Aetna , and Cigna 's purchase of Express Scripts . The integration of CVS Health and Aetna resulted in the combination of one of the nation's largest health insurance companies with a pharmaceutical company seen all across
17854-463: The parent company of Montgomery Ward and Container Corporation of America . In 1976, Exxon, through its subsidiary Intercor, entered into partnership with Colombian state owned company Carbocol to start coal mining in Cerrejón . In 1980, Exxon merged its assets in the mineral industry into newly established Exxon Minerals (later ExxonMobil Coal and Minerals). At the same year, Exxon entered into
18012-479: The periodic issuance of high-yield corporate bonds. These bond issuances were raised to US$ 1.5 billion per series in April 2015, as demand surged to US$ 4 billion. In December 2019, the recently inaugurated President Alberto Fernández put Guillermo Nielsen in charge of YPF. Nielsen was replaced by Pablo Gerardo González in January 2021. President-elect Javier Milei stated after his election in 2023 that YPF
18170-406: The potential competitor, the enhancements to horizontal collusion, and development of barriers to entry. However, it is still debated over if vertical integration expected efficiencies can lead to competitive harm to the market. Some conclude that in many cases that the efficiencies outweigh the potential risks. Contrary to horizontal integration , which is a consolidation of many firms that handle
18328-545: The presidency in 1973 was followed by the addition of nearly 20,000 employees (YPF employed 53,000 by 1976). It also coincided with the 1973 oil shock , however, and the US$ 470 million in added oil import costs combined with larger payrolls to erase profits in 1974, while production declined slightly. The dictatorship installed in a March 1976 coup initially presided over a revitalization and streamlining of YPF. Output increased by 20% and its finances initially improved following
18486-491: The price of kerosene and agrochemicals to contribute to the development of the interior regions of Argentina. YPF produced 5.5 million barrels by 1929, and though its share of domestic output had declined to 58% (from 77% in 1923) amid a sharp rise of Esso and Royal Dutch Shell production in Chubut, the firm now covered a third of the nation's oil market. A partnership with distributor Auger & Co. signed in 1925 resulted in
18644-442: The product. Another major success of Apple's, is the forward integration with their retail stores, allowing them to sell their products directly to customers (helping customers to buy and use Apple's products and services), additionally helping them to control the prices of their products, and thus to maintain high-profit margins when they do. Apple is also known as one of the world's leading "orchestrators" as they exert control over
18802-765: The public eye suffered badly after publication of Ida M. Tarbell 's classic exposé The History of the Standard Oil Co. in 1904, leading to a growing outcry for the government to take action against the company. By 1911, with public outcry at a climax, the Supreme Court of the United States ruled in Standard Oil Co. of New Jersey v. United States that Standard Oil must be dissolved and split into 34 companies, with two of them becoming Standard Oil Company of New Jersey (Jersey Standard for short) and Standard Oil of New York (Socony for short). Over
18960-689: The purpose of the price fixing or if the prices varied, such conduct was illegal in and of itself: "Under the Sherman Act a combination formed for the purpose and with the effect of raising, depressing, fixing, pegging, or stabilizing the price of a commodity in interstate or foreign commerce is illegal per se ..." This rule remains in use today for agreements that appear on their face to always or almost always restrict competition and reduce output. During American involvement in World War II , April 29, 1942, Socony's unescorted tanker, named Mobiloil ,
19118-745: The relationship between YPF and the government became difficult. Investment in exploration at YPF as a percentage of profits had been far below those in most other Repsol subsidiaries. Market analysts and Repsol blamed the decline in exploration and production on government controls on exports and prospecting lease awards, and price controls on domestic oil and gas. Political risks and government intervention, including price controls, have discouraged foreign investment in oil production in Latin America in general. President Cristina Fernández de Kirchner raised YPF frequently in speeches during March 2012, claiming that underinvestment and excessive dividends at
19276-616: The remaining 49%. Planning Minister Julio de Vido was appointed to head the Federal intervention , replacing CEO Sebastián Eskenazi. Repsol YPF CEO Antonio Brufau, Spanish Prime Minister Mariano Rajoy , and other Spanish officials objected to the nationalisation, accusing the Argentine government of driving down YPF shares ahead of the announcement (market price of the shares declined by over half from February to April). Economy Minister Hernán Lorenzino claimed in turn that asset stripping at YPF had financed Repsol's expansion in other parts of
19434-510: The rest of the stations in the area, withdrawing the Mobil brand from the area for 29 years until a Uni-Mart location in Coraopolis, Pennsylvania , started selling Mobil gasoline in 2016. In 1998, Exxon and Mobil signed a US$ 73.7 billion merger agreement forming a new company called Exxon Mobil Corp. (ExxonMobil), the largest oil company and the third-largest company in the world. This
19592-460: The restructuring process. The financial bottom line for the company was increased from a loss about $ 1 billion in 1991 (although the accounting system at the time could not accurately compute actual profit) to a profit of $ 1 billion in 1993, and the underlying value of YPF was increased from about US$ 2 billion to the US$ 9 billion after privatization. Estenssoro stayed on as CEO, and further streamlined
19750-631: The same part of the production process, vertical integration is typified by one firm engaged in different parts of production (e.g., growing raw materials, manufacturing, transporting, marketing, and/or retailing ). Vertical integration is the degree to which a firm owns its upstream suppliers and its downstream buyers. The differences depend on where the firm is placed in the order of the supply chain. There are three varieties of vertical integration: backward (upstream) vertical integration, forward (downstream) vertical integration, and balanced (both upstream and downstream) vertical integration. Disintermediation
19908-506: The simplest case, where the gains and losses have been studied extensively. A vertically integrated company usually fails when transactions within the market are too risky or the contracts to support these risks are too costly to administer, such as frequent transactions and a small number of buyers and sellers. The following are several case studies of vertical integration in play. Many examples center around American industries, where major companies like General Foods, Carnegie Steel Company ,
20066-665: The stake in Thyssengas was acquired by RWE. The company also divested Exxon's aviation fuel business to BP and Mobil's certain pipeline capacity servicing Gatwick Airport . The Federal Trade Commission required to sell 2,431 gas stations in the Northeast and Mid-Atlantic (1,740), California (360), Texas (319), and Guam (12). In addition, ExxonMobil should sell its Benicia Refinery in California, terminal operations in Boston,
20224-455: The steel processes to the next generation. Oil companies , both multinational (such as ExxonMobil , Shell , ConocoPhillips or BP ) and national (e.g., Petronas ) often adopt a vertically integrated structure, meaning that they are active along the entire supply chain from locating deposits , drilling and extracting crude oil , transporting it around the world, refining it into petroleum products such as petrol/gasoline , to distributing
20382-585: The subtleties of managing small high-tech companies." Exxon announced the closure of the venture at the end of 1984. In 1973, Exxon acquired the Ray Point uranium ore processing facility which was shortly afterwards decommissioned. Due to the oil embargo of 1973 , Exxon and Mobil began to expand their exploration and production into the North Sea , the Gulf of Mexico , Africa, and Asia. Mobil diversified its activities into retail sale and packaging by acquiring
20540-832: The suit in October 2015. In 1986, Exxon Nuclear was sold to Kraftwerk Union, a nuclear arm of Siemens . Exxon sold the Exxon Building (1251 Avenue of the Americas), its former headquarters in Rockefeller Center , to a unit of Mitsui Real Estate Development Co. Ltd. in 1986 for $ 610 million, and in 1989, moved its headquarters from Manhattan , New York City to the Las Colinas area of Irving, Texas . John Walsh, president of Exxon subsidiary Friendswood Development Company, stated that Exxon left New York because
20698-434: The supply chain can be challenging for the firm. Another problem that may stem from vertical integration is the collapse of goals among the various firms in a supply chain. With each firm operating under different systems, integration may cause initial problems in management and production. Vertical integration also proves to be dangerous when monopolistic problems arise in a capitalistic economy. When this happens, competition
20856-587: The supply chain not only under a common ownership but also into one corporation (as in the 1920s when the Ford River Rouge Complex began making much of its own steel rather than buying it from suppliers). Vertical integration can be desirable because it secures supplies needed by the firm to produce its product and the market needed to sell the product, but it can become undesirable when a firm's actions become anti-competitive and impede free competition in an open marketplace. Vertical integration
21014-598: The supply chain. Vertical integration enabled Ford Motor Company to be self-regulating and self-sufficient. EssilorLuxottica , the company that merged with Essilor and Luxottica , occupies up to 30% of the global market share as well as representing billions of pairs of lenses and frames sold annually. Before the merger, Luxottica also owned 80% of the market share of companies that produce corrective and protective eyewear as well as owning many retailers, optical departments at Target and Sears , and key eye insurance groups, such as EyeMed , many of which are already part of
21172-598: The time of the 1911 breakup , ExxonMobil is seen by some as the definitive continuation of Standard Oil today. Today, ExxonMobil is the largest investor-owned oil and gas company in the world by revenue and market capitalization. The company is frequently included near the top of the Fortune 500 and Fortune Global 500 , and trails only Saudi Aramco in market capitalization among all the world's energy firms. Both Exxon and Mobil were descendants of Standard Oil , established by John D. Rockefeller and partners in 1870 as
21330-719: The time was the world's longest gas pipeline were completed by 1949, leading to a fifty-fold increase in natural gas production. Oil production at YPF surpassed 25 million barrels (84% of the nation's total) by 1955. This gain was partly offset by a 40% drop in private-sector output, however, such that overall oil production rose by only one-third during the Peronist decade while annual consumption nearly doubled to 70 million barrels. The nation's oil supply thus shifted from 60% domestic in 1945, to 60% imported by 1954. Oil imports by 1955 rose to US$ 300 million, or over one fourth of total merchandise imports. Perón had made economic nationalism
21488-474: The total) in 1934, production grew to 15 million in 1945 (67%). The development of the nation's sizable natural gas resources also originated largely from YPF. Drawing from an initiative by YPF director Julio Canessa, President Juan Perón ordered that the gas flared off in YPF oil extraction should instead be captured, and sold by a state company, thus establishing the sister firm Gas del Estado ("State Gas") in 1946. The nation's first gas compressor and what at
21646-491: The two parties will negotiate tomorrow about how to divide the returns of the investments. Since the owner is in a better bargaining position, he will have stronger incentives to invest. Hence, whether vertical integration is desirable or not depends on whose investments are more important. Hart's theory has been extended by several authors. For instance, DeMeza and Lockwood (1998) have studied different bargaining games, while Schmitz (2006) has introduced asymmetric information into
21804-408: The world. Responses included a diplomatic offensive by Rajoy in other countries in the region, assurances by Industry Minister José Manuel Soria of "clear and decisive" Spanish government measures, Foreign Minister José García-Margallo y Marfil 's admonition that Argentina had "shot itself in the foot" by damaging relations with Spain , and other threats. The Chinese state oil concern, Sinopec ,
21962-581: The year of its merger with Mobil and reaching the #1 spot on the list a few years between 1970 and 1995. In 1965, Jersey Standard started to acquire coal assets through its affiliate Carter Oil (later renamed Exxon Coal, U.S.A.). For managing the Midwest and Eastern coal assets in the United States, the Monterey Coal Company was established in 1969. Carter Oil focused on the developing synthetic fuels from coal. In 1966, it started to develop
22120-731: The years, Mobil was among the largest sellers of gasoline and motor oils in the United States and even held the top spot during the 1940s and much of the 1950s. Various Mobil products during the Socony-Vacuum and Socony-Mobil years included Metro, Mobilgas and Mobilgas Special gasolines; Mobilfuel Diesel, MobilHeat and Mobil-flame heating oil, Mobil Kerosine, Lubrite , Gargoyle, Mobiloil and Mobiloil Special motor oils; Mobilgrease, Mobillubrication, Mobil Upperlube, Mobil Freezone and Permazone antifreezes, Mobilfluid automatic transmission fluid, Mobil Premiere tires, Mobil Stop-Leak, and Mobil Lustrecloth, among many others. In 1954, Mobil introduced
22278-638: Was accused of treason by senator Harry S. Truman . In 1941, it opened the first commercial synthetic toluene plant. Upon the merger of Socony and Vacuum Oil , some suggested that Jersey Standard and Standard Oil of California merge to maintain dominance in the oil industry, though no serious moves were ever made by either side. In 1932, Jersey Standard acquired foreign assets of the Pan American Petroleum and Transport Company . In 1937, its assets in Bolivia were nationalized, followed by
22436-409: Was appointed CEO. Argentine Deputy Economy Minister Axel Kicillof rejected Repsol's initial demands for payment of US$ 10.5 billion for a 57% stake in YPF (the state sought 51%), citing debts of nearly US$ 9 billion. The book value of YPF was US$ 4.4 billion at the end of 2011; its total market capitalization on the day of the announcement was US$ 10.4 billion. Repsol officials submitted the matter to
22594-528: Was assigned to Standard Oil Company of New York in order to improve trade with the Asian counterparts. In 1898, Standard Oil of New Jersey acquired controlling stake in Imperial Oil of Canada. In 1899, Standard Oil Company of New Jersey became the holding company for the Standard Oil Interests. The anti-monopoly proceedings against the Standard Oil were launched in 1898. The reputation of Standard Oil in
22752-423: Was at the time the tenth largest in the world. According to Mosconi, this spawned the beginning of "the mobilization of all sort of resistance and obstacles" from the oil trusts , in particular from Standard Oil, which was one of the most influential foreign companies in Argentina, with a presence in Comodoro Rivadavia, Jujuy , and Salta . The Chamber of Deputies approved a law on 28 September 1928, establishing
22910-504: Was developed by Oliver Hart and his coauthors. Consider a seller of an intermediate product that is used by a buyer to produce a final product. The intermediate product can only be produced with the help of specific physical assets (e.g., machines, buildings). Should the buyer own the assets (vertical integration) or should the seller own the assets (non-integration)? Suppose that today the parties have to make relationship-specific investments. Since today complete contracts cannot be written,
23068-578: Was discovered near the city of Comodoro Rivadavia in Chubut . Following World War I , oil had become an important resource, leading to struggles between rival powers to gain control of it. YPF was created by President of Argentina Hipólito Yrigoyen on 3 June 1922. It was the first entirely state-run oil company in the world, the second being the French Compagnie française des pétroles (CFP, French Company of Petroleum), created in 1924 by
23226-403: Was extracted, the coal mines that supplied the coal , the ships that transported the iron ore and the railroads that transported the coal to the factory, the coke ovens where the coal was coked, etc. The company focused heavily on developing talent internally from the bottom up, rather than importing it from other companies. Later, Carnegie established an institute of higher learning to teach
23384-520: Was head of the company until 1923, when he was succeeded by Herbert L. Pratt . Beginning February 29, 1928, on NBC , Socony Oil reached radio listeners with a comedy program, Soconyland Sketches , scripted by William Ford Manley and featuring Arthur Allen and Parker Fennelly as rural New Englanders . Socony continued to sponsor the show when it moved to CBS in 1934. In 1935, it became the Socony Sketchbook, with Christopher Morley and
23542-844: Was one of the state-controlled companies that he planned to privatize. The company remained the largest in its sector in Argentina despite declining production, operating 52% of the nation's refinery capacity in three facilities and 1,600 filling stations. Its sales of gasoline and other motor fuels totaled 12.15 billion liters (3.21 billion gallons) in 2011, 57% of the national market in these. Oil production in Argentina peaked in 1998 at 308 million barrels and declined steadily afterward, reaching 209 million in 2011. Natural gas production also declined, from 52 billion m in 2004 to 45.5 billion. The company's production of oil had fallen by 43% between 1998 and 2011, and of natural gas by 37% from its high in 2004. Oil exploration fell from 30 wells in 1998 to 8 in 2010 (French energy firm Total S.A. overtook YPF as
23700-481: Was ranked as the 1360th -largest public company in the world. Founded in 1922 under President Hipólito Yrigoyen 's administration, YPF was the first oil company established as a state enterprise outside of the Soviet Union, and the first state oil company to become vertically integrated . YPF's first director was Enrique Mosconi , who took up his charge in 1922, remaining there until 1930. During his run on
23858-698: Was reduced to $ 507.5 million by the US Supreme Court in June 2008, and distributions of this award commenced in 2008. In 1996, Exxon entered into the Russian market by signing a production sharing agreement on the Sakhalin-I project, forming Exxon Neftegas in the process. Following the break-up of Standard Oil in 1911, the "Standard Oil Company of New York" (or 'Socony') was founded, along with 33 other successor companies. Henry Clay Folger
24016-430: Was reported to have been in talks to buy out Repsol's share in YPF – a potential deal scuttled by the Argentine announcement. Both Repsol and YPF shares fell sharply before and after the announcement, and the cost of insuring Argentine government bonds against default rose, as did those of Spain. Repsol Chairman Brufau estimated the company's potential loss at €5.7 billion (US$ 7.5 billion). The largest minority shareholder,
24174-621: Was signed in 1955 for the eventual production of up to 56 million barrels a year. These initiatives were opposed by much of the Army , the opposition UCR , and among others Perón's point man on national oil policy, YPF head Julio Canessa, who was dismissed. The venture ended following Perón's overthrow in September. An erstwhile critic of both the Drilexco and Standard Oil contracts, President Arturo Frondizi enacted policies in 1958 which granted foreign firms rental contracts by YPF over new wells to foster exploration and production. A key part of
24332-421: Was sunk by a German U-boat ( German Type IX submarine U-108 captained by Klaus Schlotz), and all 52 people survived after 86 hours adrift in lifeboats. Socony-Mobil ranked 86th among United States corporations in the value of World War II military production contracts. In 1955, Socony-Vacuum was renamed Socony Mobil Oil Company. In 1963, it changed its trade name from "Mobiloil" to simply "Mobil", introducing
24490-848: Was the fifth-largest oil merger in history, with the combined companies having over $ 60 billion in combined sales. Among other changes, in February 1985 it was reported that Mobil was planning on selling an unprofitable Idaho gold mine it had acquired when it purchased Superior. William P. Tavoulareas was President of Mobil Corporation until succeeded by Allen E. Murray in 1984. Mobil moved its headquarters from 150 East 42nd Street , New York City to Fairfax County, Virginia , in 1987. That same year, Mobil sold nearly all of its stations in Western Pennsylvania (including Pittsburgh ) to Standard Oil of Ohio (which had just been fully acquired by BP ) and terminated franchise contracts with
24648-442: Was the largest corporate merger at that time. At the time of the merger, Exxon was the world's largest energy company while Mobil was the second-largest oil and gas company in the United States. The merger announcement followed shortly after the merge of BP and Amoco , which was the largest industrial merger at the time. Formally, Mobil was acquired by Exxon. Mobil's shareholders received 1.32 Exxon's share for each Mobil's share. As
24806-426: Was unveiled as the new, unified brand name for all former Enco and Esso outlets. At the same time, the company changed its corporate name from Standard Oil of New Jersey to Exxon Corporation, and Humble Oil became Exxon Company, U.S.A. The rebranding came after successful test-marketing of the Exxon name, under two experimental logos, in the fall and winter of 1971–72. Exxon was "one of hundreds of names that came out of
24964-658: Was withdrawn. The coup was lobbied for chiefly by Standard Oil, whose interests in Salta Province and neighboring Bolivia conflicted with those of YPF. The subsequent Concordance regime supported YPF, however, and its role as the nation's leading oil distillates retailer was bolstered by a 1936 agreement with the Automóvil Club Argentino (ACA) to supply a chain of ACA service stations. Oil production by YPF continued to grow, and soon eclipsed private production: from just over 5 million barrels (37% of
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