CLASSIFICATION OF BUSINESS ACTIVITIES
- Industry
- Commerce
INDUSTRY: It is a function of business activity which involves production, processing and provides finished goods i.e. the consumer goods or the industrial goods only.
- Extractive industry deals with extraction of natural resources first time, like mining of coal.
- Genetic industry deals with breeding of fishes, bees etc.
- Manufacturing industry deals with changing of
semi-finished goods of primary industry into finished goods.
- Constructive industry deals with
construction of buildings, dams etc.
- Tertiary industry helps only by providing
services to PRIMARY AND SECONDARY INDUSTRIES.
COMMERCE: This function of business activity only helps in the distribution of finished goods produced by industries to the ultimate consumers. In business activities there a number of hindrances by TRADE, which are solved through the help of commerce.
·
Trade refers to the way through which
exchange of consumer goods from manufacturer to consumer. It has further
two divisions i.e.·
Internal trade (with the
geographical boundaries)
a.
Wholesale trade –when goods are purchased
in large quantity and sold in large quantity.
b.
Retail trade – when goods are purchased
and sold in small quantity.
·
External trade (outside the
geographical boundaries)
a.
Import-purchase of goods from other
country for consumption.
b.
Export-sales of goods to other countries.
c.
Entrepot- purchase of goods from other
countries for the purpose of resale.
AIDS
TO TRADE: are services that help in the success of trade of goods. It removes
various hindrances, like
Hindrance
of gap - removed by warehouse
Hindrance
of place – removed by transportation
Hindrance
of people – removed by trade
Hindrance
of knowledge – by advertisement
Hindrance
of money – by banking
BUSINESS RISK: It is the uncertainty of
business of getting loss in the future course. It cannot be eliminated but it
can be reduced.
·
INSURABLE risk is that risk in which loss
can be recovered.
·
NON-INSURABLE risk is that risk in which
losses cannot be recovered.
·
SPECULATIVE risk is that in which there
are changes of both happening i.e. loss as well as gain.
·
PURE risk is that risk in which if something
occurs, it will be loss only .
