Unit-6

Contents

• Introduction to Business Sectors

• Manufacturing(Automobiles & Pharmaceutical)

• Service (IT , Telecommunication, Banking ,Insurance)

• HR, Marketing ,Production & Operations ,Finance

Acc. to the Chambers Dictionary, business means

 Trade
 Profession
 Occupation
 commercial activity

Business :may be defined as the organized efforts of an individual or an

organization to supply consumers or customers with goods & services for a
profit.E.G : Retail shop, Shopping Mall, any product manufacturing company,
Any service providing company .

Classification of Business

1. Business which produce goods

• Commodities- produced by primary sector For eg Wheat, rice , vegetables
, etc
• Commodities- produced by secondary sector For eg Cars, Mobiles ,
chemical, medicines, etc

2.Business which produce Services

• Hotels, internet , legal, & other producers of services of any kind
-. Business which distribute Goods(Wholesale merchant of various types i.e inter-
mediators , Importers & exporters)
- Business which facilitate Distribution of Goods(Transporters, Aviation , shipping
, courier )
( Commercial Banks, Cooperative -Businesses which deal in Finance & Financial
Servicesbanks, NBFC& Insurance companies, Stock exchanges
SCOPE OF BUSINESS
• Vast.
• Multiple activities from bringing raw material to factory & end product
from there to market constitute business.
(production, Trading , Retailing, Selling, Services etc)

Nature of Business
• -Dynamic
-Continuous
-Unpredictable

CHARACTERISTICS OF BUSINESS
• Transition ( old to new)
• Competition
• Opportunities
• Global orientation
• Technology
• Information

Industry: The number of business organization dealing in same type of goods or

services irrespective of their capital , size , operation , sales & legal forms constitute
the industry. Eg- Banking , Telecommunication
Classification of Industries
1. Nature of activity
Extractive ,genetic manufacturing, construction, service,etc)
2. Competitive structure
Monopoly/Duopoly/Oligopoly/perfect competition/monopolistic competition
(oligopoly contains a small number of large firms and monopolistic competition
contains a large number of small firms.)
3 Size based classification
( small/medium/ large)
4. Used based classification
(Basic industries/intermediate goods /capital good/ consumer goods)
5. Legal Forms of business classification
Pvt ltd/ proprietorship/partnership/public ltd)
 Business Sector
a sector refers to a large segment of the economy, while the
term industry describes a much more specific group of companies or
businesses. A sector is one of a few general segments in the economy within
which a large group of companies can be categorized.

Eg-Financial Sector (Banking, Insurance , Stock broking companies, Credit rating

and auditing companies , Investment banking etc)

The term Business Environment is composed of two words ‘Business’ and

‘Environment’.
Business Environment may be defined as a set of conditions (internal and external
) that are uncontrollable in nature and affects the functioning of organization.

Importance of Business Environment

 Identify opportunities and getting the first mover advantage:
For eg, Maruti Udyog became the leader in the small car market because it was
the first to recognize the need for small cars in India.

 Identify threats and early warning signals:

. E.g- Bajaj Scoter
 Coping with rapid changes:
Eg-Samsung beating Nokia in features of m. phone
 Improving performance:
Eg- Disel cars

Types of Business environment

1-Internal Environment

• -Value system (ethics, behavior, Vision, Mission, Objectives etc)

• Human Resources (Management structure and nature)

• Financial resources & Marketing capabilities

• Facilities , Infrastructure
 2-External Environment

Micro environment
• Suppliers,
• Customers,
• Competitors,
• Marketing intermediaries,
• Financiers,
• Publics

Macro environment
• -Political and Legal
• Economical,
• Socio-Cultural,
• Natural,
• Global ,
• Technological

A-Manufacturing :
Manufacturing is the value added production of merchandise for use or sale using
labour and machines, tools, chemical and biological processing, or formulation.

Manufacturing Industry :
Combination of industries engaged in chemical, mechanical, or physical
transformation of materials, substances, or components into consumer or
industrial goods.
Eg- Chemical +Electronics (Semiconductor) +Automobiles+ Real Estate + Gems &
Jewellary + Biotechnology+Cement +Textile
etc
India’s ranking among the world’s 10 largest manufacturing countries has improved
by 3 places to 6th position in 2015.
1-Chemical industry: accounts for about 2.11 per cent of GDP. In terms of volume
of production, Indian chemical industry is the 3rd largest producer in Asia and
6th largest in the world. Indian chemical industry generated business worth US$
118 billion in 2014.The Indian chemical industry is very diverse and covers
basic chemicals and their intermediates, petrochemicals, fertilizers, paints,
pesticides, bulk drugs and pharmaceuticals.

=Bulk chemicals(39%) +agrochemicals (20.3%) +specialty chemicals(19.5)

+pharmaceuticals & biotechnological (20.2%)
Major companiesin pharmaceuticals = GlaxoSmithKline, Dabur, Ranbaxy , Pfizer,
etc

Regulators : Central Drugs Standard Control Organization (CDSCO) is the national

regulatory body for Indianpharmaceuticals and medical devices

Major companies in chemicals :

Tata Chemicals United Phosphorous Limited BASF India Glycols Pidilite
Industries Vikas WSP Phillips Carbon Black Limited Gujarat Heavy Chemicals
Aarti Industries Gujarat Alkalies & Chemicals Limited

Chemicals: paints, adhesives, pharmaceuticals, dye stuffs , leather chemicals,

pesticides etc. Methanol, acetic acid, formaldehyde, pyridines, phenol, alkyl
amines, ethyl acetate and acetic anhydride are the major organic chemicals
produced in India

The Indian Chemical Industry comprises both small and large-scale units, and
presently, there are about 70,000 chemical manufacturing units located in the
country (Deptt. Of Chemicals and Petrochemicals- 2013) a major component
(in numbers) are covered in the small scale sector.
FDI=100%

2-Automobiles Industry : It is one of the largest in the world. The industry

accounts for 7.1 per cent of the country's GDP. As of FY 2014-15, around 31
per cent of small cars sold globally are manufactured in India.

The Two Wheelers segment with 81 per cent market share is the leader of the Indian
Automobile market owing to a growing middle class and a young population.
 Moreover, the growing interest of the companies in exploring the rural markets
further aided the growth of the sector. The overall Passenger Vehicle (PV)
segment has 13 per cent market share

Major companies = Maruti suzuki ltd, Hyundai,Honda, Toyota,Tata motors ,

Mahindra & Mahindra etc

Industry association =

B-Service industry :
The service industries involve the provision of services to businesses as well as
final consumers. Eg-Accounting, tradesmanship (like mechanic or plumber
services), computer services, restaurants, tourism, e-commerce etc.
Indian service sector grew at approximately 8 per cent per annum and contributed to
about 64 per cent of India's GDP in FY 2015-16. India is the 8th largest services
exporter in the world. The services exports have in 2014 stood at US$ 155.6
billion, which constitutes 7.5 per cent of GDP.
The services sector has attracted the highest amount of FDI equity inflows in the
period April 2000-March 2016, amounting to about US$ 50.79 billion which is
about 18 per cent of the total foreign inflows, according to the Department of
Industrial Policy and Promotion (DIPP).

1-Banking Industry : The Indian banking system consists of 26 public sector

banks, 25 private sector banks, 43 foreign banks, 56 regional rural banks, 1,589
urban cooperative banks and 93,550 rural cooperative banks, in addition to
cooperative credit institutions. Public-sector banks control nearly 80 percent of
the market, thereby leaving comparatively much smaller shares for its private
peers.
Major companies =Icici bank,Hdfc,SBI bank ,Citi bank, Kotak bank, Yes bank etc
Regulator -RBI
Contribution of banking in GDP =7.7% of GDP
Employment=1.5.million

1-Insurance Industry :
The insurance industry of India consists of 53 insurance companies of which 24 are
in life insurance business and 29 are non-life insurers. Among the life insurers,
Life Insurance Corporation (LIC) is the sole public sector company. Apart from
that, among the non-life insurers there are six public sector insurers. The Indian
 insurance market is a huge business opportunity waiting to be harnessed. India
currently accounts for less than 1.5 per cent of the world’s total insurance
premiums and about 2 per cent of the world’s life insurance premiums despite
being the second most populous nation

Major companies =LIC/icici prudential/idbi life insurance

Regulatro -IRDA

2-Telecommunication Industry :
India is currently the world’s second-largest telecommunications market and has
registered strong growth in the past decade and half. The Indian mobile
economy is growing rapidly and is expected to contribute substantially to
India’s Gross Domestic Product (GDP). India' has the second largest mobile
subscriber base in the world. According to Telecom Regulatory Authority of
India (TRAI), the total telecom subscriber base in December 2015 stood at 1.04
billion, out of which 1.01 billion were mobile subscribers and 25.52 million
were wireline subscribers.

Major companies =Airtel,Reliance Jio,Vodafone etc

Regulator-TRAI

Area of operations for a business organization

HR(Human Resource Management)

Key activities of HR in a business organization :

• Manpower planning (No of employees to be needed , hired and promoted, etc)

• Training & development of employees ( Induction , product & sales training)

• Compensation designing (Salary, bonus, incentives, pf, etc)

• HR plolicies ( leaves , timing, dresss code, code of conduct , grivence handling

, integration etc)

Marketing
Key activities of Marketing in a business organization :
• Managing 4ps/7ps (Product, price , place and promotion )
Product/Packaging/Pricing /Promotion(Advertisements( print, electronic , internet
etc)
STP(segmentation , targeting and positioning)
Distribution channel
Sales target /complaints / research / surveys etc

Finance
Key activities of Finance in a business organization :

• Budgeting

• Meeting Capital requirement

• Break even point

• Listing in stock exchnge

• Balance sheet

• Audit

Operations
Key activities of Operations in a business organization :

• Quality control in production and services

• Logistics (Supply chain management )