Business Sectors Flashcards
Business sectors are classified into categories
Primary, secondary, tertiary sectors
Formal and informal sector
Public and private
Definition of primary sector
Extracts raw materials from nature
Definition of secondary sector
Converts raw materials into final products
Also known and industrial sector
Manufacturing processes takes place
Link primary and secondary sectors
Definition of tertiary sector
Brings goods and services within reach of customers
There is two production branches:
- trade and services
Advantages of the formal sector
Products supplied are legal
Products supplied are guaranteed, faulty goods can be returned
Disadvantages of formal sector
Entering formal sector is more difficult
Jobs are scarce
Advantages of informal sector
Easy to enter
No education needed
Provides jobs and income
Gain work experience
Disadvantages of informal sector
Do not pay tax, makes use of public services
Illegal goods are sometimes sold
Faulty goods can’t be returned
Quality of goods is not guaranteed
Advantages of public sector
Services are more affordable
Provides many job opportunities
All citizens have access to services delivered by public sectors
Disadvantages of public sector
Service delivery can be slow
Remuneration paid is usually lower
Advantages of private sector
Creates job opportunities
Enables owners to create wealth
Salaries are usually more competitive
Disadvantages of private sector
Less job security
Offers more variety
More pressure on employees to perform well
Very competitive
Is formal sector registered or unregistered
Is it registered for tax
What is it also known as
Registered
Yes
Primary economy
Is the informal sector registered or unregistered
Does it pay tax
What is it also known as
Deals with cash or credit
Unregistered
No
Secondary economy
Deals with cash
