Background on oil industry: The importance of oil for lighting, new discoveries of oil in Pennsylvania, and low startup costs made the oil industry in the nineteenth century an extremely competitive industry.
Incorporation: Rockefeller organized his large Cleveland oil refinery as a corporation, which helped him limit liability and maximize profit.
Size and leverage: Rockefeller used the size of his corporation, Standard Oil, to bargain surreptitiously for reduced railroad rates, which in turn enabled him to undercut competition. From this position, he was able to force competitors to shut down, or sell out and become part of Standard Oil.
Trusts and holding companies: To strengthen the legal footing of his secret dealings, Rockefeller used trustees and stock swaps to coordinate between companies, effectively giving him a monopoly over oil refinement. When the legal standing of this arrangement came under fire, he reorganized his refineries under a holding company, which made them technically one company. A central administration could coordinate their actions without risking being held in violation of antitrust laws.
Management: By controlling an entire sector of the economy, Rockefeller was able to maximize efficiency. He expanded outward from his control of refineries to seek control of transportation, marketing, and sources of crude oil.