Sectors of Economy, Trade, Commerce, Industry, Quaternary, Quinary sectors, Tertiary sector, Sri City, Entrepôt, Malta, Amsterdam, Suez canal trade

1. SECTORS OF
ECONOMY
BUSINESS
FUNCTIONS AT
ENTERPRISE LEVEL

2. Professor & Lawyer
Puttu Guru Prasad
B.Com., M.Com., M.Phil., M.B.A., PGDFTM., AP.SET.,
M.Phil., DRMS., L.L.B., ICFAI TMF., DIRM., L.L.M.,
Pre PhD (PhD)from JNTUK.,
“Diploma in Psychology from YALE
University”
MHRDI’s IIC Ambassador
NSS Certified Program Officer, (A.U)
Senior Faculty for Business Studies, Economics, Accounts
Head, Board of Administration & Management Science,
Bhagavad Gita & CLAT Program Coordinator,
Commerce Department, VIVA-VVIT, Nambur,
My Blog: puttuguru.blogspot.in

3. Professor & Lawyer
Puttu Guru Prasad

4. Business Functions at Enterprise Level
• Business includes a wide variety of functions performed by many different kinds of
organizations called business enterprises or firms.
• Financing, Production, Marketing and Human resource management are the four major
functions which are performed by business enterprises to carry on business.
• Financing is concerned with mobilizing and utilizing funds for running a business enterprise.
• Production involves the conversion of raw materials into finished products or generation of
services.
• Marketing refers to all those activities which facilitate exchange of goods and services from
producers to the people who need them, at a place they want, at a time they require and at a
price they are prepared to pay.
• Human resource management aims at ensuring the availability of working people who have
necessary skills to perform various tasks in enterprises.

6. 1.5 CLASSIFICATION OF BUSINESS ACTIVITIES
• Various business activities may be classified into two broad categories — industry
and commerce.
• Industry is concerned with the production or processing of goods and materials.
• Commerce includes all those activities which are necessary for facilitating the
exchange of goods and services.
• On the basis of these two categories, we may classify business firms into industrial and
commercial enterprises.
• Let us examine in detail the activities relating to business.

7. BUSINESS ACTIVITIES
INDUSTRY COMMERCE
Trade
1 EXTRACTIVE
2 GENETIC
3 MANUFACTURI NG
4 CONSTRUCTION
Aidsto Trade
Hometrade;
1)Retail trade
2) wholesale
trade
Foreigntrade 1
import
2 export
3 Entrepot
Transport
Warehousing
Insurance
Banking
advertising

8. industry commerce Trade
Differentiate between Industry, Trade and Commerce

9. 1.6 INDUSTRY
• Industry refers to economic activities, which are connected with conversion of
resources into useful goods.
• The term industry is used for activities in which mechanical appliances and technical
skills are involved.
• These include activities relating to producing or processing of goods as well as
breeding and raising of animals. The term industry is also used to mean groups of
firms producing similar or related goods.
• For example, cotton textile industry refers to all manufacturing units producing textile
goods from cotton. Similarly, electronic industry would include all firms producing
electronic goods, and so on.
• Further, in common parlance, certain services like banking and insurance are also
referred to as industry, say banking industry, insurance industry etc.
• Industries may be divided into three broad categories namely primary, secondary and
tertiary

13. a) Primary industries:
•These include all those activities, which are connected with the
extraction and production of natural resources and reproduction and
development of living organisms, plants etc.
•These industries may be further subdivided as follows:
•(i) Extractive industries: These industries extract or draw out products
from natural sources. Extractive industries supply some basic raw
materials that are mostly products of the soil. Products of these
industries are usually transformed into many other useful goods by
manufacturing industries. Important extractive industries include
farming, mining, lumbering, hunting and fishing operations.
•(ii) Genetic industries: These industries remain engaged in breeding
plants and animals for their use in further reproduction. For the breeding
of plants, the seeds and nursery companies are typical examples of
genetic industries. In addition, activities of cattle breeding farms,
poultry farms, and fish hatchery come under the class of genetic
industries.

15. (b) Secondary industries:
•(b) Secondary industries: These are concerned with using the
materials, which have already been extracted at the primary stage.
•These industries process such materials to produce goods for final
consumption or for further processing by other industrial units.
For example, the mining of an iron ore is a primary industry, but
manufacturing of steel is a secondary industry.
•Secondary industries may be further divided as follows:
•(i) Manufacturing industries: These industries are engaged in
producing goods through processing of raw materials and thus
creating form utilities. They turn out diverse finished products,
that we consume, through the conversion of raw materials or
partly finished materials in their manufacturing operations.

16. (b) Secondary industries:
•Manufacturing industries may be further divided into four categories on
the basis of method of operation for production.
•Analytical industry which analyses and separates different elements
from the same materials, as in the case of oil refinery.
•Synthetical industry which combines various ingredients into a new
product, as in the case of cement.
•Processing industry which involves successive stages for
manufacturing finished products, as in the case of sugar and paper.
•Assembling industry which assembles different component parts to
make a new product, as in the case of television, car, computer, etc.
•(ii) Construction industries: These industries are involved in the
construction of buildings, dams, bridges, roads as well as tunnels and
canals. Engineering and architectural skills are an important part in
construction industries.

18. c) Tertiary industries:
•c) Tertiary industries: These are concerned with
providing support services to primary and
secondary industries as well as activities relating
to trade. These industries provide service
facilities.
•As business activities these may be considered
part of commerce because as auxiliaries to trade
they assist trade.
•Included in this category are transport, banking,
insurance, warehousing, communication,
packaging and advertising.

22. QUINARY SECTOR
• New trends in quinary services include knowledge processing outsourcing (KPO)
and ‘home shoring’, the latter as an alternative to outsourcing.
• The KPO industry is distinct from Business Process Outsourcing (BPO) as it
involves highly skilled workers. It is information driven knowledge outsourcing.
• KPO enables companies to create additional business opportunities. Examples of
KPOs include research and development (R and D) activities, e-learning, business
research, intellectual property (IP) research, legal profession and the banking
sector.
• The highest level of decision makers or policy makers perform quinary activities.
These are subtly different from the knowledge based industries that the quinary
sector in general deals with.
• Quinary activities are services that focus on the creation, re-arrangement and
interpretation of new and existing ideas; data interpretation and the use and
evaluation of new technologies.
• Often referred to as ‘gold collar’ professions, they represent another subdivision
of the tertiary sector representing special and highly paid skills of senior business
executives, government officials, research scientists, financial and legal
consultants, etc.
• Their importance in the structure of advanced economies far outweighs their
numbers.

23. Manufacturing industry may assume the
following forms
(a) Analytical industry: In analytical industry, the raw
material is broken down into several useful materials.
For example, an oil refinery separates crude oil into
kerosene, gasoline, diesel oil, and petrol, etc. Petroleum
refining is anexample of analyticalindustry.
(b)Synthetic industries: are those industries
which combines various ingredients and make
a new product. For example. Cement,
fragrance industry etc. Two or more materials are mixed
together in the manufacturing operations to obtain some new
products.like soap,cement etc

24. ANALYTICAL INDUSTRY

25. Petroleum Refinery
Cement Industry
Mysore Sandal Soap Industry
SYNTHETIC INDUSTRY

26. Manufacturing industry may assumethe
following forms
Processing industry:
Raw materials are processed through a series of
manufacturing operations making use of analytical
and synthetic method)- textile, sugar and steel.
Assembly line industry:
in assembly industry, the finished products can be
produced only after various components have
been made and then brought together for final
assembly. Automobile, watches, television are
examples

27. Processing industry
Assembly line industry:

28. Construction industry may assumethe
following forms
• They are concerned with making of roads, bridges, dams and
canals.
ConstructionINDUSTRY

29. Stock Market Trading
Share Markets

30. Types of trade
Trade may be classified on the basis of
1) Geographical area covered
2) volume of trade transaction
On geographical basis trade may be
classified in to two like internal trade and
external trade.
On volume of trade basis trade is divided in
to two 1. Wholesale & 2. retail trade

31. Internal or hometrade
It refers to purchase and sale of
goods within the boundaries of a
country.
Wholesale trade: purchase and sale
of goods in bulk quantity and sell to
retailers at small quantity.
Retail trade: selling of goods by the
retailer to the customer

32. WHOLE SALE
RETAIL

33. Entrepôt
• Entrepôts were especially relevant in the Middle Agesand in the early modern
period, when mercantile shipping flourished between Europe and its colonial
empires in the Americas and Asia.
• For example, spice trade in Europe, coupled with the long trade routes necessary
for their delivery, led to a much higher market price than the original buying
price.
• Traders often did not want to travel the whole route, and thus used the entrepôts
on the way to sell their goods.
• This could conceivably lead to more attractive profits for those who were suited
to travel the entire route. The 17th-century Malta, Amsterdam Entrepôt provides
an example of such an early-modern entrepôt.
• The term is still used to refer to duty-free ports with a high volume of re-
export trade. Entrepôt also means "warehouse" in modern French, and is derived
from Latin roots inter "between" + positum "position", literally "that which is
placed between."

34. MALTA Entrepot

36. MALTA Entrepot
•In 1869, the opening of the Suez Canal benefited
Malta's economy greatly as there was a massive
increase in the shipping which entered in the port. The
economy had entered a special phase.
The Mediterranean Sea became the "world highway of
trade" and a number of ships called at Malta
for coal and various supplies on their way to the Indian
Ocean and the Far East. From 1871 to 1881, about
8,000 workers found jobs in the Malta docks and a
number of banks opened in Malta. By 1882, Malta
reached the height of its prosperity.

37. External or foreigntrade
• Import trade
• Export trade
• &Entrepot trade:Duty free ports
Duty free ports

38. Duty free ports

39. AUXILIARIES TO TRADE
•Transportation
•Communications
•Banking
•Insurance
•Ware housing
•Advertising
•Packaging

41. Professor & Lawyer
Puttu Guru Prasad