chapter 2 business IGCSE

1. IGCSE Business Studies
1.2 Classification of Business
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SCHOOL

2. Business Classification
• A classification is a way of grouping
together firms that are similar in some
way. There are different ways to do this:
1) By industry
2) By size
3) By value
4) By sector

3. Business Sectors

4. Primary
50%
Secondary
33%
Tertiary
17%
Value
Industrial Sectors
• Primary Sector
Resource extraction
• Secondary Sector
Manufacturing / processing
• Tertiary Sector
Services and retail

5. Industrial Sectors
60%
30%
10%
Value by Sector
2016
Primary
Secondary
Tertiary
40%
40%
20%
Value by Sector
2017
Primary
Secondary
Tertiary

6. Importance of Sectors
• To show value / growth areas
• To show employment statistics
• To show scale of industrialisation and
development
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7. Types of Economies
• As well as happening in different sectors,
business can occur in different
economies
– Command - where the government owns all
firms (known as the public sector)
– Free Market – where there is no government
but firms are owned privately
– Mixed – an economy with private and public
sectors

8. Mixed Economies

9. Changing sizes of sectors
Privatization: the selling of public sector organisations
to the highest private bidder
• Private sector
– Profit is a motivator
– Provides government with tax
• Public Sector
– Can provide a lot of employment
– Useful for dangerous industries
– Very expensive and often inefficient
0
20
40
60
80
100
120
Country 1 Country 2
Private
Public