2 Classification of business
In this unit you will learn about:
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the three sectors of industry how business activity is classified as primary, secondary or tertiary how businesses in each sector are interdependent why the types of business activity undertaken in a country are a key element in that country’s national economy.
Everything you buy starts out as either: a metal or mineral deposit in the earth a growing plant an animal living on the land, in the air, or in a river or the sea. Changing it into a useful product and getting it into a shop where you can buy it is a long process that involves businesses in different industrial sectors.
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Industrial sectors Businesses are classified into one of three sectors, depending on the type of activity they carry out. The three sectors are: 1 Primary sector
2 Secondary sector 3 Tertiary sector. Primary sector businesses Primary sector businesses produce the raw materials out of which finished products are made. Typical primary sector businesses are: • farming • agriculture • fishing • forestry • mining • fuel extraction.
Businessinincontext context Business Do you like chocolate? Have you ever stopped to think about just what goes into making the bar of chocolate that you can buy in a shop and eat before you get home? Chinua Apache owns a small farm in Nigeria. His main crop is cocoa beans. Cocoa beans are the main ingredient in chocolate. The cocoa beans that Chinua grows are harvested and shipped in cargo vessels to chocolate manufacturers such as Whittaker’s in New Zealand.
The manufacturer processes the beans and turns them into cocoa butter. Cooked full-cream milk and sugar are added to produce chocolate ‘crumb’. This is crushed between heavy rollers, other ingredients are added and the chocolate is moulded into bars. Finally, the bars are wrapped, packed into cases and delivered to retail outlets for sale to customers. The chocolate bars are usually transported by road.
Questions Look carefully at Figure 2.1 on page 16. 1 How many different operations can you identify? 2 How many different business organisations are involved in the process?
3 Explain how businesses at different stages of the production process work with each other, basing your answer on Figure 2.1.
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