BUSINESS

All the economic activities related to production and exchange of goods or services for an economic return.

BUSINESS SECTORS
The business sector consists of two main subsectors: - Industrial sector - tertiary or service sector

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

Business which Produce

This class of business is involved in actual production of goods. There are two categories of goods 1. Commodities goods which are produces by the primary sector i.e. agriculture and mining. 2. Products Goods that are produced by the secondary sector.

Business which produce Services

This is the tertiary sector of the economy. This sector provides services . This sector is a barometer of how developed an economy is. The more developed an economy, the more is the contribution of this sector to the GDP

Business which Distribute Goods

This business is also a part of services. This is an important business because it distributes the goods produced by other businesses. These include wholesalers, retailers, exporters and importers

Business which Facilitate Distribution of Goods

This business helps in the distribution of goods. Included in this are Warehousing, Auction houses, exchanges, transportation firms, advt.firms and financing firms.

Businesses which deal in Finance and Financial Services

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

CLASSIFICATION OF INDUSTRIES
Industry consists of all those firms which produce goods and services. It is that part of business which creates form utility. Industry may be classified on the basis of the nature of activity, on the competitive structure, use of the output, ownership category, size

Classification on the Nature of Activity

This classification is on the basis of the activity being carried out by the industry. They can be Extractive Industries Genetic Industries Manufacturing Industries Construction Industries Service Industries IT Industries

Classification on Competitive Structure

This classification is on the basis of the competitive structure of the market. There are two types of market competition Perfect Competition Imperfect Competition

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.

Imperfect Competition
Following types of competitive structures are included in this 1. Monopolistic Competition 2. Monopoly 3. Duopoly. 4. Oligopoly.

Monopolistic Competition
In a monopolistic competition, there are a large number of sellers, but the products are differentiated. No seller is large enough to influence the competition.

Monopoly
In monopoly , there is a single firm controlling the supplies. There may be a large number of buyers or few buyers. The firm has full control over the pricing.

Oligopoly
There are a large number of buyers but only a few sellers. There is little or no product differentiation.