1.2 Classification of Business

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by Lubna Al-Shami19 views·Updated Sep 16, 2020
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  1. Hello and welcome.
  2. Today we will be talking about the classifications off businesses.
  3. When we talk about classifications.
  4. Business week two garages, businesses or classify them into three
  5. stages of economic activity or what we call the three
  6. economic sectors.
  7. Now these three sectors are the primary sector, which includes
  8. any business networks in the extraction off natural resource is
  9. so any business networks and farming extracting or drilling for
  10. oil and gas, fishing, farming, forestry.
  11. All of these are businesses that extract natural resource is
  12. the next sector is what we call the secondary sector.
  13. Now the secondary sector is includes any business networks and
  14. manufacturing goods.
  15. Okay, so when I say ah, car, factory, a chair,
  16. factory or furniture factory when I say a bakery because
  17. they manufacture baked goods all of these fall within the
  18. EC secondary sector.
  19. So the key word here is manufacturing.
  20. The third sector, which we call the tertiary sector, is
  21. the sector that covers or produces service is so any
  22. business that works in the service sector is called is
  23. considered in the tertiary sector.
  24. Example of that our banks, schools, health care providers, travel
  25. and tourism businesses and so on.
  26. Uh, next thing Yeah, we need to talk about the
  27. importance off sectors within an economy.
  28. Now we have the primary, secondary and tertiary sectors and
  29. in order to determine which sector is most important in
  30. Jordan, which sector is most important in China?
  31. Which sector is most important in the US, we have
  32. to look at two factors.
  33. The first one factor we look at is the value
  34. of output the sector provides in relation to the country's
  35. total production.
  36. So which sector produces the most value off goods and
  37. service is this could be this would be considered the
  38. most important sector in that country.
  39. Another way to measure a sector importance is to look
  40. at the percentage off workers employed in that sector compared
  41. to the, uh, number off all employed people in a
  42. country. So how much that does that sector contribute into
  43. employing workers in that country?
  44. As time goes, there happens, changes in sector importance happen,
  45. and as economies develop as economies on countries develop, they
  46. become developed countries.
  47. We start experiencing the industrialization, the industrialized, the industrialization is
  48. when the most important sector in a country stops being
  49. the primary or the secondary and moves towards being the
  50. tertiary sector.
  51. Things happens for a number of reasons.
  52. Sometimes a country could depend on the primary sector, but
  53. the natural resources are exhausted and they become depleted.
  54. So we need to look or concentrate on other businesses
  55. that work in the secondary and tertiary sector.
  56. Now. Other times, developed countries cannot compete with developing economies
  57. that work in manufacturing, such as China and Brazil.
  58. They are a manufacturing at very low costs.
  59. They are providing very low selling prices, and it makes
  60. more sense for developed countries to focus more in service
  61. is and leave these sectors to developed developing economies.
  62. This'll leads to the industrialization.
  63. In addition to that, when a country becomes, uh in
  64. a better economic situation, this means that, um, citizens will
  65. have higher incomes they want.
  66. They will want to spend more money on.
  67. Experiences on service is for our people prefer to spend
  68. money on goods or have to spend money on goods
  69. because they need to cover their needs.
  70. But once a person starts to make more income, they
  71. would like to invest in a traveling.
  72. They want to get a better education.
  73. They want to use banking service is and so on.
  74. Yeah. Uh, next off, we need to talk about the
  75. concept off mixed economies.
  76. Now, when I talk about mixed economies, I'm saying that
  77. businesses are either owned by the government or they are
  78. owned by the individuals in the country.
  79. When a business is owned by a government, it is
  80. called a public business, and it falls into the public
  81. sector When a when a business is owned by individuals,
  82. not by the public, not by the state it's owned
  83. by individuals.
  84. Then we say that the business falls within the private
  85. sector and important concept that emerged in mixed economies.
  86. Is the concept off privatization.
  87. Now, when I talk about private privatization, I'm saying that
  88. the government started selling some off the company's.
  89. It owns two individuals.
  90. It it turned public sector businesses into private sector businesses.
  91. Now this happened and telecommunication.
  92. This happened in water and electricity supplies all across the
  93. world, uh, in many countries.
  94. Why would a government sell its state owned businesses to
  95. a private sector?
  96. Things happens because sometimes the government does not have enough
  97. money or enough funds to spend on giving the best
  98. service possible.
  99. So the private sector has more access and more liberty
  100. and using their finances.
  101. Uh, in addition to that, because the private sector is
  102. a prophet aiming sector, they enhance a service quality, and
  103. they hand enhanced product quality because they want to attract
  104. more customers.
  105. I want to make profit.
  106. In addition to that, it creates work off more of
  107. competitiveness in the country.
  108. So whenever there is competition between businesses, it's better for
  109. individuals as they will get better.
  110. Quality service is and better selling prices.
  111. However, because, uh, private sector businesses aim for profit in
  112. their trial to cut costs, they may lay off many
  113. employees that were already originally hired by the government.
  114. In addition to that, private businesses usually do not have
  115. social objectives the way public sector businesses do.
  116. They do not try to, for example, increased employment, create
  117. a better community and so on.
  118. So these are problems that come with a privatization thistles,
  119. a quick crap off the classification of business.
  120. I hope you enjoyed this lesson and see you next