BUSINESS SECTORS AND THEIR ENVIRONMENTS CHAPTER 6

BUSINESS STUDIES

GRADE 12
PAPER 1
TERM 2
CHAPTER 6
BUSINESS SECTORS AND THEIR ENVIRONMENTS
REVISED NOTES
2024
TABLE OF CONTENTS

TOPICS PAGES
Exam guidelines for business sectors and their 2
environments
Terms and definitions 2
Types of business sectors 3
Possible challenges, their environments & 4
extent of control
Example of a scenario on the primary sector 5
Example of a scenario in the secondary sector 5
Example of a scenario in the tertiary sector 5-6
Example of a direct question on business
environments and the extent of control 6

This chapter consists of 6 pages

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BUSINESS SECTORS AND THEIR ENVIRONMENTS CHAPTER 6

CONTENT DETAILS FOR TEACHING, LEARNING AND ASSESSMENT PURPOSES

Learners must be able to:
• Name THREE types of business sectors: primary, secondary and tertiary.
• Identify/Name a business sector from given scenarios/statements.
• Identify business challenges from given scenarios/case studies and classify them
according to the THREE business environments.
• State/Explain the extent to which a business (operating in any of the three sectors)
can control the three business environments from given scenarios and case studies.

TERMS AND DEFINITIONS

TERM/CONCEPTS DEFINITION/MEANING
Business Sector a business sector is a subdivision/subset of the economic activities, e.g.
primary, secondary, and tertiary.
the different categories of business enterprises based on
the type of business/production activity conducted.
Business Environments All the internal and external factors that affect the functioning of a
business, e.g. micro, market and macro environments.
The extent of control and the amount of influence that a business has on the business
environment.
the degree of control the business has over the specific business
environment.
Macro environment This environment exists outside the micro and the market environments.
external uncontrollable factors/forces outside the business.

Market environment this environment exists immediately outside the business.

components/elements/factors immediately outside
the business.
Micro environment the business itself, characterised by all the processes/
functions/factors within the business.
Primary sector extracts/exploits/collects/harvests natural resources/raw
materials from the earth.
The secondary sector
focuses on the manufacturing/processing/converting/
transforming natural resources/raw materials into semi-finished/finished.
products.
Services an action/performance of intangible activities offered by one party
to another.
Tertiary sector provides/distributes final products and services to
customers.
Business Environments All the internal and external factors that affect the functioning of a
Micro environment business,
This e.g. micro,
environment market
is the and macro
business itself, itenvironments.
consists of all the elements
inside the business.

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Introduction
In Grade 10 you were introduced to the concepts of Business environments and
the components of EACH environment. In addition, different business sectors
were discussed in detail.

The focus in Grade 11 was on the link/relationship between the primary,

secondary and tertiary sectors, including challenges emanating from the THREE
business environments.

The focus areas in Grade 12 will be on the identification of business sectors, and
the identification and classification of business challenges. The extent to which
businesses can control the THREE business environments will also be discussed.

Business sectors
Business sectors are sub-divisions/subsets of economic activities, e.g. primary, secondary
and tertiary.

1 Types of business sectors

1.1 Primary sector

• The primary sector focuses on activities related to the
extraction/exploitation/cultivation/harvesting of natural resources/raw materials.
• It is often referred to as extractive/exploitative industries as it involves acquiring
natural resources/raw materials.
• The primary sector is dependent on nature/the natural environment because it
utilises/uses the earth’s natural resources, land, minerals, and vegetation.
• The primary sector plays a critical/essential role in production activities because,
without it, further production activities would be impossible in the secondary sector.
• This sector deals with the extraction of raw materials and natural resources.
• Natural resources which are not man-made like coal, gold, fish and livestock are
extracted from this sector.
• Examples of the primary sector industries; are mining, fishing, agriculture, forestry
and farming.

1.2 Secondary sector

• The secondary sector focuses on activities related to the production/
manufacturing of products.
• It uses the natural resources/raw materials sourced by the primary sector and
adds value to them.
• The secondary sector is often referred to as manufacturing industries because
valuable products are created/manufactured/produced so that these products
can serve a meaningful function/purpose to customers/consumers.
• It transforms/converts/processes natural resources/raw materials into
meaningful products/semi-finished products.
• The secondary sector plays an important/critical role because not all resources
in their natural state are functional/useful and require further processing.
• This business sector is responsible for changing the raw materials acquired
from the primary sector into useful products.
• It includes the manufacturing factories, construction, and energy generation
Examples of the secondary sector industries; are manufacturing, clothing, food
processing, building, and construction are found in this sector.

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1.3 Tertiary sector

• The tertiary sector focuses on activities related to providing final products and
• services to consumers/customers.
• It is often referred to as the services sector because a variety/diverse range of
• commercial services are provided to consumers/customers.
• The tertiary sector involves all activities aimed at making the distribution of
• products/services possible.
• It plays a unique/different role because it allows natural resources/raw materials
• that were collected and transformed available to consumers/customers.
• Businesses in the primary/secondary sectors rely on the tertiary sector to make
• their products/services available to consumers/customers in a convenient/
effective/efficient manner.
• This sector renders services to the public and businesses.
• It includes services from transport, banking, legal and health.
• Examples of the tertiary sector industries; distribution, banking, insurance, tourism,
transportation, entertainment, retail and legal services.
NOTE: You must be able to identify/name the above-mentioned business sector
from given scenarios/statements.

2 Possible business challenges, their environments and extent of control

Possible challenges Business environment Extent of control
• Difficult/Unmotivated employees
• High rate of absenteeism
• Lack of vision and mission
• Lack of adequate management Micro environment Full control
skills
• strikes/ go-slows
• Lack of human resource capacity
• Poor working conditions
• Various business functions
working/operations

• Competition
• Supply shortages Market environment Partial/Some/Limited/Less
• Change in consumer behaviour control
• Demographics/psychographics
• Socio-cultural factors
• Change in income levels
• Contemporary legislation
• Labour restrictions Macro environment No control
• Political changes
• Interest rates
• Socio-economic issues
• Technological advances
• Globalisation and International
Challenges

NOTE: Learners should be able to:

• Quote business challenges from the scenario
• Classify these challenges according to the business environments
• The challenge must be linked to the business environments
• State the extent of control businesses have over each business environment.

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• The extent of control must be linked to the business environment

Examples of how the business sectors and their business environments can be
assessed

Example 1: Business in the primary sector

Read the scenario below and answer the questions that follow:
BESTIE FRUIT CANNING (BFC)
Bestie Fruit Canning manufactures a variety of canned foods. BFC lost customers to Dinah
Fruit Canning because their products are of high quality. The profitability of BFC decreased
due to poor management skills. Bestie Fruit Canning borrowed money from the Y Bank at a
high-interest rate.

You need to identify the business sector in which Bestie Fruit Canning operates and
motivate your answer by quoting from the scenario.

You need to quote challenges from the above scenario, classify EACH challenge
according to the business environment and state the extent of control BFC has over
EACH business environment

BUSINESS EXTENT OF CONTROL

CHALLENGES
ENVIRONMENTS
1 BFC lost customers to Dinah Market environment Partial/Some/Limited/Less/little
Fruit Canning because their control
products are of high quality.
2 The profitability of BFC Micro environment Full/Complete control
decreased due to poor
management skills.
3 Best Fruit Canning borrowed Macro environment No control
money from the Y bank at a high-
interest rate.

Example 2: Business in the secondary sector

Read the scenario below and answer the questions that follow:
SUPER ENERGY ENTERPRISE (SEE)

Super Energy Enterprise produces maize meal and instant soft porridge. They buy their raw
material from Early Bird Maize Farm which is out of stock sometimes. SEE employees are
regularly absent from work. The local government has instructed the management of SEE to
register their products with the South African Bureau for Standards.

Name the business sector in which Super Energy Enterprise is operating

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SECONDARY SECTOR

Identify THREE challenges for SEE's business and classify EACH challenge according to
the business environment.
CHALLENGE BUSINESS ENVIRONMENT
(a) SEE employees are regularly absent from Micro environment
work
(b) They buy their raw material from Early Bird Market environment
Maize Farm which is out of stock
sometimes.
(c) The local government has instructed the Macro environment
management of SEE to register their
products with the South African Bureau of
Standards.
Example 3: Business in the tertiary sector
Read the scenario below and answer the questions that follow:
TIMOTHY LEGAL SERVICES (TLS)

Timothy Legal Services (TLS) is situated at the Pretoria CBD. TLS’s assistant lawyers are not
trained to handle criminal cases. Another law firm, Mbuzi Inc. has set up a law practice in the
same office block as TLS. TLS can no longer pay their bank loan due to an increase in interest
rates.

Name the business sector in which TLS is operating. Motivate your answer by quoting from
the scenario above.
Business sector: Tertiary sector
Motivation: Timothy Legal Services (TLS) is situated at the Pretoria CBD
Identify THREE challenges for TLS business and classify EACH challenge according to the
business environment. State the extent of control TLS has over EACH business environment

CHALLENGE BUSINESS EXTENT OF CONTROL

ENVIRONMENT
TLS’s assistant lawyers are Micro environment Full/Complete control
not trained to handle criminal
cases.
Another law firm, Mbuzi Inc. Market environment Partial/Some/Limited/Less/little
has set up a law practice in control
the same office block as
TLS.
TLS can no longer service Macro environment No control
their bank loan due to an
increase in interest rates.
NOTE: You may sometimes asked to name three business environments and explain
the extent of control businesses have over EACH business environment e.g.

BUSINESS ENVIRONMENTS EXTENT OF CONTROL

Micro environment Full control
Market environment Partial/Some/Limited/Less control
Macro environment No control