Changing importance of business classification
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Changing importance of business classification
Countries are often described as developing or developed.
Developing country-has a small industrial sector and lower standard of living compared to other countries.
Industrialization-The growing importance of secondary sector business activity and the reduced importance of primary sector business activity.
De-industrialiasation- The growing importance of the tertiary sector and the reduced importance of the secondary sector.
Industrialisation: China, India
De-industrialisation: UK, USA
Higher income, demand better quality and a wider choice of products.
Better education- expect better products
More leisure time- consumers work fewer hours
A change in consumer behaviour
The need for finance to fund expansion
The need to be able to communicate internally and externally quickly
The need to provide better services for their employees, for example canteens.
A change in business behaviour resulting from:
Most countries in the world have mixed economies. These are economies that have both private sector and public sector organisations.
Mixed economy: An economy where the resources are owned and controlled by both the private and public sectors.
Business enterprises in the private and public sectors
Private sector: The part of the economy that is owned and controlled by individuals and companies for profit.
Public sector: The part of the economy that is controlled by the state or government.
Business enterprises in the private and public sectors
Private Sector Sole Trader Partnerships Limited Companies Franchises, Joint Venture, Social Enterprise
Public Sector Government Departments Public Corporations Nationalised Industries
Private Sector Public SectorWhat to produce Consumer choices The government
decidesHow to produce Firms want to make
profitThe government decides
For whom to produce
Customers buying power
The government decides
In the private sector consumers want to buy certain goods and services.
Business only produce goods if they can make a profit.
Businesses decide the best way of producing their products.
Private sector decisions
The decisions about what, how and for whom to produce in the public sector are all made by government.
The public sector in many countries produces goods and services that all people in the population need.
E.g. electricity, roads, education and health care.
Public sector decisions
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