BUSINESS STUDIES – 0450
LEARNING OBJECTIVES
 BE ABLE TO CLASSIFY BUSINESSES BASED ON
 SECTORS
 OWNERSHIP
BUSINESS STUDIES – 0450
LESSON 2 – CLASSIFICATION OF BUSINESS
 BUSINESSES MAY BE CLASIFIED BASED ON THE TYPE OF
GOODS / SERVICES THEY PRODUCE AS
 PRIMARY SECTOR – EXTRACTING OR HARVESTING
NATURAL RESOURCES FROM LAND OR SEA. IT THUS
PROVIDES THE RAW MATERIAL FOR THE SECONDARY
SECTOR ( FARMING / FISHING / MINING / FORESTRY)
 SECONDARY SECTOR – THIS SECTOR TAKES
BUSINESS STUDIES – 0450
LESSON 2 – CLASSIFICATION OF BUSINESS
 BUSINESSES MAY BE CLASIFIED BASED ON THE TYPE OF
GOODS / SERVICES THEY PRODUCE AS
 SECONDARY SECTOR – THIS SECTOR TAKES NATURAL
RESOURCES FROM THE PRIMARY SECTOR ACTIVITY AND
CONVERTS IT TO FINISHED PRODUCTS
 REFINNG / MANUACTURING /CONSTRUCTION – FOOD
CANNING / FURNITURE MAKING / CAR MFG / HOUSE
BUILDING
BUSINESS STUDIES – 0450
LESSON 2 – CLASSIFICATION OF BUSINESS
 BUSINESSES MAY BE CLASIFIED BASED ON THE TYPE OF
GOODS / SERVICES THEY PRODUCE AS
 TERTIARY SECTOR – THIS SECTOR PROVIDES SERVICES TO
THE FINAL CONSUMERS OR BUSINESSES
 RETAILING / FINANCE / ENTERTAINMENT / TRANSPORT
SHOPS / RESTAURANTS / BANKS / CINEMAS / AIRLINES
BUSINESS STUDIES – 0450
LESSON 2 – CLASSIFICATION OF BUSINESS
 BUSINESSES MAY BE CLASSIFIED AS P/S/T BUT ARE OFTEN
DEPENDENT ON EACH OTHER
L 2 – CLASSIFICATION OF BUSINESS
CHAIN OF PRODUCTION
L 2 – CLASSIFICATION OF BUSINESS
IMPORTANCE OF BUSINESS CLASSIFICATION
 COUNTRIES ARE OFTEN DESCRIBED AS DEVELOPED / DEVELOPING / LESS
DEVELOPED BASED ON STANDARD OF LIVING
 DEVELOPED COUNTRY HAS HIGHER LEVELS OF INDUSTRIALISATION / HIGHER
AVERAGE INCOME / HIGER STANDARD OF LIVING
 SIZE OF A COUNTRY’S DIFFERENT SECTORS OF BUSINESS ACTIVITY OFTEN
INDICATES IF IT IS DEVELOPING OR DEVELOPED ECONOMY
L 2 – CLASSIFICATION OF BUSINESS
IMPORTANCE OF BUSINESS CLASSIFICATION
TYPE
DEVELOPED
DEVELOPED
DEVELOPING
DEVELOPING
COUNTRY
JAPAN
NORWAY
RWANDA
VIETNAM
PRIMARY (%)
1.2
2.7
33.3
21.5
SEC (%)
27.5
41.5
40.7
25.1
TER (%)
71.4
55.7
37.7
54.6
L 2 – CLASSIFICATION OF BUSINESS
SO WHAT EXACTLY IS THE ECONOMY ????
 IT IS MORE THAN GDP STATISTICS / STOCK
MARKETS AND FOREIGN EXCHANGE.
 ULTIMATELY ECONOMICS IS SIMPLY ABOUT HOW WE
W-O-R-K. THE ECONOMY IS THE SUM TOTAL OF THE
WORK WE MUST PERFORM TO PRODUCE THE
GOODS AND SERVICES WE NEED TO SURVIVE AND
LIVE. ECONOMICS IS ABOUT WHO DOES WHAT, WHO
GETS WHAT, AND WHAT THEY DO WITH IT. WITHOUT
WORK, NOTHING HAPPENS IN THE ECONOMY
ECONOMIC SYSTEMS
 AN ECONOMY IS THE LARGE SET OF INTER-RELATED PRODUCTION
AND CONSUMPTION ACTIVITIES THAT AID IN DETERMINING HOW
SCARCE RESOURCES ARE ALLOCATED
 MARKET-BASED ECONOMIES ( US)
ALLOW GOODS TO FLOW FREELY
THROUGH CONSUMERS AND PRODUCERS DETERMINE WHAT’S SOLD AND
PRODUCED. PRODUCERS OWN WHAT THEY MAKE AND DECIDE THEIR OWN
PRICES, WHILE CONSUMERS OWN WHAT THEY BUY AND DECIDE HOW MUCH
THEY’RE WILLING TO PAY
 MIXED ECONOMY – RESOURCES ARE OWNED AND CONTROLLED BY
BOTH THE PUBLIC AND PRIVATE SECTORS
MIXED ECONOMY
 PRIVATE SECTOR – PART OF THE ECONOMY WHERE THE RESOURCES
ARE OWNED / CONTROLLED BY COMPANIES / INDIVIDUALS FOR
PROFIT
 PUBLIC SECTOR - PART OF THE ECONOMY THAT IS CONTROLLED BY THE
GOVERNMENT
MIXED ECONOMY
MIXED ECONOMY
SER ACTION
1
WHAT TO
PRODUCE
2
HOW TO
PRODUCE
3
FOR WHOM
TO PRODUCE
PVT SECTOR
CONSUMER
CHOICES
IN A PROFITABLE
MANNER
CUSTOMERS
HAVING BUYING
POWER
PUBLIC SECTOR
GOVT DECIDES
GOVT
GOVT