20 Corporate Rivalries That Reshaped The World

During the Depression, Coca-Cola’s boss, Robert Woodruff, insisted that all the company’s 6.5-ounce bottles be sold for 5 cents nationwide. Walter Mack and Charles Guth ran the bankrupt Pepsi-Cola division, and Guth started putting Pepsi into discarded 12-ounce beer bottles and charging the same 5 cents per bottle. He doubled the value, and Mack promoted the gimmick with the slogan “Twelve full ounces, that’s a lot” on the radio. Coke’s most enduring competitor survived because of that clever bit of salesmanship.

Samuel Cunard’s Cunard Line built fast turbine ships to win the era’s trans-Atlantic speed contest. The White Star Line, operated by Thomas and J. Bruce Ismay and owned by J.P. Morgan’s shipping holding company, responded with huge luxury liners, including the Titanic. The sinking of the Titanic in 1912 and of Cunard’s Lusitania in 1915 crippled both companies and led to a slew of new safety regulations. Unable to complete new vessels during the Depression, Britain forced Cunard and White Star to combine in 1934.

Adolf “Adi” Dassler and his brother Rudolf Dassler ran a German shoe company together that made running shoes for the sprinter Jesse Owens during the 1936 Berlin Olympics. After years of wartime tensions, the brothers divided the company in 1948 in the town of Herzogenaurach: Adi founded Adidas, and Rudolf created what would become Puma. The town was divided into Adidas territory and Puma territory, and the rivalry spurred advancements such as screw-in soccer cleats and the modern-day sports endorsement.

By 1921, Henry Ford’s Model T represented over 60% of the American car market through manufacturing prowess. GM’s response, led by Alfred P. Sloan, was to segment its range from Chevy to Cadillac based on buyer income level, introduce annual model changes, and offer consumer credit via General Motors Acceptance Corp. Ford did not modify the Model T until declining sales led him to close a factory. In 1931, GM overtook Ford as the world’s largest automaker.

Edison consolidated the film technology patents he owned into a conglomerate known as the Motion Picture Patents Company, or “Edison Trust.” The Edison Trust owned the rights to cameras, projectors, and film stock. Filmmakers like Carl Laemmle and William Fox didn’t want to pay the Edison Trust’s licensing fees, and the Edison Trust sued them in turn. The independents moved to Southern California, where the sunlight was dependable year-round, and the proximity to the Mexican border made it easy to slip out of the reach of federal marshals. In 1915, courts found the Edison Trust to be in violation of antitrust laws, and it was fully dissolved within a couple of years.

By offering local affiliates free programming in return for guaranteed commercial time, CBS president William Paley turned CBS into a serious challenger of David Sarnoff’s NBC. In 1948, Paley carried out what became known as the CBS Talent Raids, utilizing a tax loophole to entice such NBC talent as Jack Benny and Red Skelton away from Sarnoff. Later, the rival networks engaged in a bitter struggle over color TV. RCA’s technology prevailed, partly because it was compatible with viewers’ existing black-and-white sets.

John D. Hertz and Walter Jacobs ran Hertz, the dominant car rental firm of the time. Its model relied on downtown locations near train stations. Warren Avis, an ex-Air Force officer, placed his bets on the upcoming air travel boom, investing $10,000 in setting up the first airport rental counters at Detroit’s Willow Run Airport and Miami International Airport in 1946. Hertz, dismissive of the idea, allowed Avis to expand throughout the nation’s airports without opposition, until it finally started doing the same by the mid-1950s.

Pan Am, under Juan Trippe, was the sole federal-designated airline permitted to operate internationally out of the United States. No one came close to rivaling its services across the ocean. In 1939, Howard Hughes, the wealthy aviation magnate, bought a controlling stake in Trans World Airlines. That year he secretly commissioned Lockheed to build a new plane, a pressurized airliner called the Constellation, which he personally flew cross-country in a record time. When World War II ended, Hughes persuaded Congress and the Civil Aeronautics Board to dismantle Pan Am’s monopoly by allowing TWA access to European destinations beginning in 1945.

In 1910, Bernard Gimbel’s Gimbels department store opened its flagship a block away from the Straus family-owned Macy’s at New York’s Herald Square, and the two spent decades competing by undercutting each other. Macy’s guaranteed a price 6% lower than any other store; Gimbels matched the discount and sold the same goods. Gimbels started the first department-store Thanksgiving Day parade in Philadelphia in 1920, and Macy’s added its own New York parade a few years later.

Prior to World War Two, laundry soap was made from animal fat and left a scummy film in hard water. But in 1946, Procter & Gamble, under Richard R. Deupree, secretly launched Tide, a synthetic detergent, and it quickly grabbed 30% of the American market. The makers of the leading soap powder, Rinso, Lever Brothers, came out with their own synthetic, Surf, triggering a price war that was exacerbated by a massive program of sponsorships for daytime television drama series, hence the name “soap opera.”

Samuel Zemurray, known as “Sam the Banana Man,” ran Cuyamel Fruit Company, the archrival of United Fruit. After a border dispute put his Honduran holdings in jeopardy, he hired armed mercenaries in 1911 to help oust the country’s president. United Fruit then swallowed up Cuyamel in a stock deal. After United Fruit’s stock tanked during the Depression, thanks in part to terrible management, Zemurray amassed enough votes to take over the giant he’d just sold to. It’s said that he told the board they’d been mismanaging the company for long enough.

In 1868, Cornelius “Commodore” Vanderbilt, who owned the New York Central Railroad, attempted to take over the competing Erie Railroad in order to monopolize rail transport to New York City. The Erie directors, including Jay Gould and Jim Fisk, legally issued new convertible bonds and then converted them into tens of thousands of newly minted shares that Vanderbilt unknowingly purchased for millions of dollars. When judges demanded their arrest, Gould and Fisk escaped to New Jersey, where they bribed legislators to ratify the transaction. Vanderbilt was left with a massive loss, and public outrage led to new regulations on corporate finance.

The British East India Company, chartered in 1600 by Queen Elizabeth I, and the Dutch East India Company, chartered in 1602, were both private companies whose investors traded in spices such as nutmeg and cloves. In 1623, the Dutch company, which had raised huge sums of public capital and built its own navy and army, had ten British traders executed on charges of treason, an incident called the Amboyna Massacre. The British company then shifted focus to India, a move that ultimately became the foundation for the British Empire in India.

Although the Hudson’s Bay Company had a royal charter for the monopoly of the fur trade in a vast area of Canada, the North West Company, established by Montreal fur traders, refused to acknowledge its authority. Each company attacked and destroyed the posts of the other, and they were actually at war for a time, the “Pemmican War,” including the Battle of Seven Oaks in 1816, where 21 men were killed. When both corporations faced bankruptcy, Parliament ordered them in 1821 to unite under the name of the Hudson’s Bay Company.

Elias Howe owned the master patent on the lockstitch, the basic mechanism inside every sewing machine. He sued Isaac Singer, who had built a more practical, commercially viable machine, and won, forcing Singer to pay royalties for each machine. Overlapping patents among several manufacturers resulted in dozens of lawsuits until an attorney named Orlando B. Potter persuaded the competitors to pool nine key patents into a single licensing group, the first patent pool in American history. Howe’s wealth was derived not from making sewing machines but from the royalties he received from the pool.

Rockefeller’s Standard Oil controlled the business of oil refining through a series of secret railroad rebates that made it impossible for small producers to compete with it. Two such producers formed the Tidewater Pipe Company and began building the nation’s first long-distance pipeline, which would pump crude 109 miles over the Allegheny Mountains to the refineries on the coast. Standard Oil attempted to block the line by purchasing the land on which it would run, but Tidewater completed it in 1879. Rockefeller subsequently built his own pipelines, and rail tank cars no longer served as the usual method of transporting crude oil long distances.

Swift & Company’s Gustavus Swift perfected the insulated refrigerated railcar, which made it possible to ship Chicago-slaughtered beef fresh to the rest of the country at any time of year. Competing meatpacking firm Philip Armour constructed enormous plants that used almost all of the byproducts of the animals, converting the waste into such things as soap, glue, and fertilizer; he was said to use everything but the squeal. Both companies also developed overhead trolley lines for moving the carcasses past the stationary workers, a system that would provide the blueprint, according to Henry Ford himself, for his own automotive assembly line.

Boeing’s Model 247 was the first true modern aircraft, an all-metal plane. But Boeing’s parent company also owned United Airlines and kept the first planes for it, leaving every other airline out in the cold. So TWA’s Jack Frye went to Donald Douglas and told him to build another plane, one with 21 seats, that would be cheaper and carry more people than the 247. Douglas built the DC-3, the first airliner that actually made money selling tickets and didn’t have to rely on airmail contracts from the government.

When financier J.P. Morgan created U.S. Steel in 1901, Charles M. Schwab was its first president. After clashing with Morgan, he resigned and purchased Bethlehem Steel, a much smaller company. Schwab then put his money on a patented new rolling mill that could manufacture single-piece wide-flange steel beams, which were lighter, stronger, and less expensive than riveted steel. Although U.S. Steel rejected the design, architects embraced it, building such skyscrapers as the Woolworth Building and the Empire State Building, until U.S. Steel eventually licensed the process itself.

Edison’s direct current, DC, could transmit power only about a mile. But George Westinghouse, an industrialist who licensed patents from inventor Nikola Tesla, used transformers to transmit Westinghouse’s alternating current, or AC, over hundreds of miles. To discredit AC, Edison went public with electrocuted dogs and cats, and he was a key player in creating the electric chair, which was powered by AC. Westinghouse’s comeback was a contract to light up the Chicago World’s Fair, and then he built the hydroelectric plant at Niagara Falls. Today, AC powers our grid, and Edison’s investors had earlier merged his business into General Electric.

This content was created with the help of AI.