Chapter 2 – Classification of

Business
Chapter 1 – Understaing of Business Activity
What you will learn…..
 The different levels of business activity
◦ primary, secondary, tertiary
 How private & public sectors of industry are organised
 How do businesses expand

◦ merger & take-over

 How to measure and compare business size
Key Terms
Industry
◦ manufacturing of a good or service within a
category
◦ the organized action of making of goods and
services for sale
Economy
◦ the system of production and management of
material wealth  "economic growth";
"aspects of social, political, and economical
life
Levels of business activity

Tertiary

Secondary

Primary
Levels of business activity
Types of Countries

Developed Developing
Countries Countries
Types of Countries
Varies Significantly with Different
Economies

Country Primary Secondary Tertiary

United Kingdom 3% 23% 74%

Malaysia 16% 37% 47%

Zimbabwe 40% 32% 28%

Sectors of Industry
Sectors of Industry
 Types of Economy

Free Market

Types of
Economy Command/Planned

Mixed
(Free) Market Economies

Resources Privately Owned

(Free)
Market Produce Goods  Profit

Economies
Demand & Supply
(Free) Market Economies
Command/Planned Economies
Resources Govt Owned

State Owns & Controls

Command/
Planned State  What & How Much

Economies
Consumers  Little Choice

Workers  Ordered
Command/Planned Economies
Mixed Economies
(Free)
Market
Economies
Mixed
Economies
Command/
Planned
Economies
Government Controls
Search the internet and find
Using the internet and/or other sources,
find out whether, in your country, the
government owns and controls the
following businesses
◦ Railway Systems
◦ Local Bus Services
◦ Water Supply
◦ Electricity Supply
◦ TV & Radio Supply
◦ Hospitals
Efficiency

Itis the degree to

which something is
done well or without
wasted energy or effort
Privatization

When
governments sell
of businesses
they previously
owned to new
owners in the
private sector
Privatization

New owners 
Profit Motive
Increase Competition
Government needs
cash
Decision-Making
Changes
 Sale
Privatization
Loss-Making
services closed

Job losses

Risk of Monopoly

Benefits