11-13-08 - Entrepreneurship I Class Notes JP MORGAN CASE...

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Entrepreneurship I – Class Notes – 11/13/08 JP MORGAN – CASE STUDY JP Morgan – tried to monopolize Morgan formed a syndicate to provide gold coin for the firm, from which he profited, he was able to keep the U.S economy on the gold standard 1907 – famous – October – significant financial panic – The panic of 1907 – the economy is very HOT (boom) – knickerbocker trust company was trying to buy copper overextended themselves – out of funds – there was a run Morgan had to decide which institutions to save and which to let go Morgan, in his 70s, gets with the lead bankers, to come up with a fund to use to save certain institutions o They saved Trust Company of America Stopped a run there o Saved a few other institutions If Morgan was able to save these institutions, there was This led to the creation of the central bank Federal Reserve Was Morgan an entrepreneur? YES! Team: He did have a team For his resources: He had a proprietary network of individuals, connections to other individuals who were very wealthy, affluent individuals aristocrats – was able to place securities in both America He could do what commercial banks could not he acted as an investment banker He was able to provide a valuable service he helped to create an institution that did not exist before - Federal Reserve Opportunity: ?
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Survival Principle: Different sizes of firms: o Small o Medium o Large Get census data on the sizes of firms look at the percentages over time of the sizes of firms for each industry If the size ratios stay the same over time, there are not many advantages to having a bigger firm o Economies of scale – big firms are able to ascertain significant market share Over time, in industries with economies of scale, the larger firms are able to
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This note was uploaded on 06/03/2009 for the course ECON 290 taught by Professor Goldenandallison during the Fall '08 term at Allegheny.

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11-13-08 - Entrepreneurship I Class Notes JP MORGAN CASE...

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