Business Covers Large or wide area. It involves all kind of economic activities. Broadly business may be classified into two categories viz. Industries and Commerce. Industry involves producing goods and services whereas commerce is concerned with distribution of goods and services from manufacturers to the customers. Thus, the scope of business may be studied under the following two components:
A. Meaning and Type of Industry:
” Industry ” refers to production of goods by manufacturing or processing. It converts raw materials into finished goods and thus creates form utility. Goods produced by an industry may be “consumers’ goods” or “producers’ goods”. Consumer goods are in the form in which consumer wants them e.g. cloth, radio, television, foodstuffs, etc. Industry directly satisfy human needs and human wants. Producers’ goods are used by other producers for further production e.g. machinery, factory, building, plants, tools, etc. Industry may be further divided into Two Types.
1. Primary Industries:
2. Secondary Industries:
1. Primary Industries:
The primary sector of the economy is the sector of an economy making direct use of natural resources. This includes agriculture, forestry, fishing and mining. The primary sector is usually most important in less-developed countries, and typically less important in industrial countries.
Primary industry is a larger sector in developing countries; for instance, animal husbandry is more common in Africa than in Japan.
- Genetic Industry: Genetic Industry is related to the reproducing, breeding and multiplying certain species of plants and plants and animals with the object of earning profit from their sale. The activities involved are rearing, breeding of animals, birds, and growing plants. Nurseries, where plants are grown for sale. cattle breeding farms, poultry, etc. come under genetic industry.
- Extractive Industry: The Extractive Industry concernedwith the extraction or drawing out products from natural sources. It supplies basic raw materials to other industries. Examples of such industries are farming, mining, hunting, lumbering, fishing, etc. Materials once extracted from earthcannot be replaced. Hence, these industries are also called exhaustive industries because with extraction there is depletion of resource and exhausts
2. Secondary Industries:
Any industry that processes raw materials that are then provided to primary industry for manufacture of products. This sector, also called manufacturing industry, (1) takes the raw materials supplied by primary industries and processes them into consumer goods, or (2) further processes goods that other secondary industries have transformed into products, or (3) builds capital goods used to manufacture consumer and non-consumer goods. Secondary industry also includes energy-producing industries (e.g., hydroelectric industries) as well as the construction industry.
Secondary industry may be divided into heavy, or large-scale, and light, or small-scale, industry. Large-scale industry generally requires heavy capital investment in plants and machinery, serves a large and diverse market including other manufacturing industries, has a complex industrial organization and frequently a skilled specialized labor force, and generates a large volume of output. Examples would include petroleum refining, steel and iron manufacturing, motor vehicle and heavy machinery manufacture, cement production, nonferrous metal refining, meat-packing, and hydroelectric power generation.
Light, or small-scale, industry may be characterized by the non-durability of manufactured products and a smaller capital investment in plants and equipment, and it may involve nonstandard products, such as customized or craft work. The labor force may be either low skilled, as in textile work and clothing manufacture, food processing, and plastics manufacture, or highly skilled, as in electronics and computer hardware manufacture, precision instrument manufacture, gemstone cutting, and craft work.
3. Tertiary/Service industry:
This sector, also called service industry, includes industries that, while producing no tangible goods, provide services or intangible gains or generate wealth. In free market and mixed economies this sector generally has a mix of private and government enterprise.
The industries of this sector include banking, finance, insurance, investment, and real estate services; wholesale, retail, and resale trade; transportation, information, and communications services; professional, consulting, legal, and personal services; tourism, hotels, restaurants, and entertainment; repair and maintenance services; education and teaching; and health, social welfare, administrative, police, security, and defense services.
Exchange of goods or services for money or in kind, usually on a scale large enough to require transportation from place to place or across city, state, or national boundaries.