Market Dominance: How Firms Gain, Hold, or Lose It and the Impact on Economic Performance

By David I. Rosenbaum | Go to book overview

4
ALCOA AND THE U.S. ALUMINUM INDUSTRY

Hayley Chouinard and David I. Rosenbaum

The Aluminum Company of America, often known as Alcoa, largely dominated the American aluminum industry for over five decades. The company enjoyed a brief patent-granted monopoly, followed by a long period of domestic monopoly with limited competition from foreign producers. Eventually, Alcoa faced domestic and foreign competition, but it managed to adapt and remain a leader in the industry. This is the story of the Aluminum Company of America, and its journey from monopoly and dominance to shared oligopoly.


THE BEGINNING OF ALCOA

Sir Humphery Davis, an English chemist, discovered aluminum in 1807. During his experiments, he also found the great difficulty involved in releasing aluminum from the other elements to which it bonds. Having no means for separation, aluminum enjoyed only limited and novel applications during most of the 1800s. Napoleon III greatly admired the lightweight and shiny metal, and displayed aluminum utensils and jewelry in his court. He desired to use the light metal to shield his army and for other military uses, but the lack of quantity and the relatively high price of aluminum, $17 a pound in 1859, dampened his enthusiasm. He sponsored research in hopes of discovering a means to mass produce aluminum, but to no avail. Napoleon died before any technology could yield any great quantity of aluminum.

Scientists around the world continued to search for a method to isolate and extract pure aluminum. In 1880, using electrochemistry, some success brought the

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Market Dominance: How Firms Gain, Hold, or Lose It and the Impact on Economic Performance
Table of contents

Table of contents

  • Title Page iii
  • Contents v
  • Illustrations vii
  • 1 - Introduction 1
  • Notes 9
  • 2 - Dominance in the Oil Industry: Standard Oil from 1865 to 1911 11
  • Notes 33
  • 3 - Tobacco: Predation and Persistent Market Power 39
  • Notes 51
  • 4 - Alcoa and the U.S. Aluminum Industry 55
  • Notes 66
  • 5 - Dow Chemical and the Magnesium Industry 69
  • Notes 86
  • 6 - Eastman Kodak in the Photographic Film Industry: Picture Imperfect? 89
  • Notes 107
  • 7 - The Rise and Fall of Ford and General Motors in the U.S. Automobile Industry: A Tale Twice Told 109
  • Notes 126
  • 8 - The Rise and Fall of IBM 131
  • Notes 150
  • 9 - Microsoft 153
  • Notes 172
  • 10 - Blue Cross: Health Insurance 175
  • Notes 190
  • 11 - AT&T's Grand Design for Dominance in the Global Information Age 195
  • Notes 224
  • 12 - Conclusion 227
  • Notes 254
  • Bibliography 257
  • Index 267
  • About the Author 273
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