Types of business activity Flashcards
Sectors
Primary: Extracts and use natural resources of the Earth
Secondary: Manufactures goods using raw materials
Tertiary: Provides services to consumers
Comparison between sectors
- The number of workers in each sector
- The value of the output of goods or services
Deindustrialization
Process in which there is a decline in the importance of the secondary sector manufacturing in a business
Free market economy/market economy
The type of economy where there isn’t any government control over factors of production
Monopoly
A business that controls all of the market for a particular product
Command economy
The type of economy where there isn’t a private sector since all resources are government owned
Mixed economy
A type of economy that contains both a public and private sector
Privatisation
The process in which national industries are sold out by the government to individuals in the private sector
Capital
The money invested into a business by its owners
Groups that compare sizes of businesses
Investors - Before deciding which business to invest in
Governments - Deciding tax rates for small/big companies
Competitors - Knowing where they stand in the market
Workers - See how many people they might be working with
Banks - To see how important a loan is compared to its overall size
Business size measured
- Number of employees
- Value of output and sales
- Capital employed
Profit
Sales revenue - Total costs
Types of growth
Internal - Business expands its existing operations
External - Business takes over or merges with another business to make one big firm
Takeover
When one firm buys out the right or owners of another business
Integration
Horizontal - When one firm merges with another of the same sector of industry and the same stage of production
Veritcal - When one firm merges with another of the same industry but different stage of production
Conglomerate - When one firm merges or takes over a firm with a completely different industry
