By primary, secondary or tertiary sectors
Almost anything and everything can become a business. Nobody would have thought of renting their room in their home like a hotel room before AirBnB.
As such, businesses are classified by their industrial sector - primary, secondary or tertiary through the goods and services they produce and sell. They are then classified by their ownership, that would indicate if they are incorporated or not.
A firm in a primary sector produces mostly from the use of natural resources, such as agriculture and mining. This would include farming, hunting, fishing, oil and gas, mining minerals and metals such as gold, logging and crop plantations.
They also make the most cost-effective raw material for production of goods and services as they are extracted from natural resources.
In the secondary sector, firms manufacture products using raw materials produced in the primary sector. The most common examples of products from the secondary sector are electronic components, construction equipments, machines and building materials and transport.
Example of secondary sector businesses are such as Tesla, Apple, Foxconn and Samsung. Tesla produces cars from electrical components produced by other secondary sector businesses
The tertiary sector consists of services by labour. Services produced are from human capital and complements the secondary and primary sector as the final stage of their production before being sold to consumers.
Example of tertiary sector businesses are like restaurants and universities, where businesses are paid for services provided by employees and employees are paid wages. Shops in shopping malls are also tertiary sector businesses as workers sell products such as washing machines (secondary sector) to customers.
What are other examples of primary, secondary and tertiary sectors businesses?
PAST YEAR QUESTIONS
Define ‘primary sector’. (2 marks) May/June 2021/12
Define ‘secondary sector’. (2 marks) Oct/Nov 2021/12
Identify two classifications of business sector activities (2 marks) Oct/Nov 2018/12
State two factors that a service sector business should consider when deciding where to locate. (2 marks) May/June 2021/11