Business Env. 5th Aug

7/27/2019 Business Env. 5th Aug

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BUSINESS

All the economic activities related toproduction and exchange of goods or servicesfor an economic return.


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BUSINESS SECTORS

The business sector consists of two main sub-sectors:

- Industrial sector - tertiary or service sector


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CLASSIFICATION OF BUSINESS

Business enterprises can be classified as under 1. Business which produce goods

2. Businesses which produce services 3. Businesses which distribute goods 4. Businesses which facilitate distribution of

goods 5. Businesses which deal in Finance &

Financial Services


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Business which Produce

This class of business is involved in actualproduction of goods.

There are two categories of goods 1. Commodities goods which are produces

by the primary sector i.e. agriculture andmining.

2. Products Goods that are produced by thesecondary sector.


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Business which produce Services

This is the tertiary sector of the economy. This sector provides services .

This sector is a barometer of how developedan economy is. The more developed an economy, the more is

the contribution of this sector to the GDP


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Business which Distribute Goods

This business is also a part of services. This is an important business because it

distributes the goods produced by otherbusinesses.

These include wholesalers, retailers, exportersand importers


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Business which Facilitate Distributionof Goods

This business helps in the distribution of goods.

Included in this are Warehousing, Auctionhouses, exchanges, transportation firms,advt.firms and financing firms.


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Businesses which deal in Finance andFinancial Services

These include Commercial Banks, NBFS,Insurance Services, Stock Exchanges etc.


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CLASSIFICATION OF INDUSTRIES

Industry consists of all those firms whichproduce goods and services.

It is that part of business which creates formutility.

Industry may be classified on the basis of thenature of activity, on the competitivestructure, use of the output, ownershipcategory, size


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Classification on the Nature of Activity

This classification is on the basis of the activitybeing carried out by the industry. They can be

Extractive Industries Genetic Industries Manufacturing Industries Construction Industries Service Industries IT Industries


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Classification on Competitive Structure

This classification is on the basis of thecompetitive structure of the market.

There are two types of market competition- Perfect Competition Imperfect Competition


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Perfect Competition

Following are the features of a perfect Competition 1. There are very large number of buyers and sellers. 2. All the buyers and sellers are small.

3.The products are homogenous . 4. There is no entry or exit barrier. 5.Buyers and sellers are perfectly knowledgeable. 6. There is complete mobility of factors of production. 7. There is no transport cost.


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Imperfect Competition

Following types of competitive structures areincluded in this-

1. Monopolistic Competition 2. Monopoly 3. Duopoly.

4. Oligopoly.


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Monopolistic Competition

In a monopolistic competition, there are alarge number of sellers, but the products aredifferentiated.

No seller is large enough to influence thecompetition.


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Monopoly

In monopoly , there is a single firm controllingthe supplies.

There may be a large number of buyers or fewbuyers.

The firm has full control over the pricing.


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Oligopoly

There are a large number of buyers but only afew sellers.

There is little or no product differentiation.

Business Env. 5th Aug

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