2. Business
Industry Commerce
Manufacturing Extractive Genetic Service Construction Trade Aids To Trade
Process
Domestic/Home/ Foreign/External/
Inland/National International/
Trade Trade Banking
Assembly
Insurance
Tele-
Communication
Export
Transport
Wholesale Retail
Import
Trade Trade Warehousing
Advertising
Re-export/
Entreport
Salesmanship
3. Business is a combination of industry and commerce
Industry concentrates on the manufacturing aspects
whereas commerce focuses on the trading aspect.
“Business is a human activity directed towards
producing or acquiring wealth through buying and
selling activities.”
-L. H. Haney
4. Industry is a collection of firms engaged
in the same product line.
Industry focuses on the manufacturing
aspect.
Industry is classified into five sub-types.
5. 1. Manufacturing Industry:
The manufacturing industry is involved in manufacturing
activities. It is engaged in converting taw materials, which
are mainly products of extractive industry, into finished
goods.
The output of manufacturing industry may be consumer
goods or producer goods.
Consumer goods can be directly consumed by the end
users (E.g. Biscuits, Bread, etc.) whereas producer goods
(E.g. Cement, Steel, etc.) are used by the industries and not
directly by end users.
Manufacturing activities may be undertaken using
different forms depending upon the nature of the
product.
6. a) Process Type:
In a process type of manufacturing activity the raw
materials are introduced initially in the first process. The
output of the firs process becomes the input for the second
process and so on. This goes process goes on until the
finished product is produced as an output in the last
process. E.g.: Manufacturing of oil from oil seeds, textile
from cotton, sugar from sugarcane, etc.
b) Assembly Type:
In a assembly type of manufacturing activity various parts
are assembled (joined) together in order to create a new
product. E.g.: Computer, Automobile, etc.
7. 2. Extractive Industry:
The extractive industry is engaged in extracting
natural resources which is freely available in
the nature.
E.g.: Agriculture, Fishing, Mining, Quarrying, etc.
8. 3. Genetic Industry:
The genetic industry deals with multiplication
of plants, animals, livestock and birds for the
purpose of business activities.
E.g.: Poultry farming, goat rearing, pig rearing,
nurseries of plants, etc.
9. 4. Service Industry:
The service industry is engaged in providing
services.
The output of service industry is intangible.
It cannot be seen but it can be experienced.
All aids to trade can be classified under
service industry.
E.g.: Banking, Insurance, Warehousing,
Transport, etc.
10. 5. Construction Industry:
The construction industry is engaged in
construction business.
The output of construction industry is tangible,
fixed, erected at one place and it is immovable.
E.g.: Construction projects
such as dams, buildings,
bridges, skywalk, sub-way,
metro railway,
laying of railway lines, etc.
11. Commerce is that
component of business
which is concerned
with trade and aids to
trade.
Commerce can be
further classified
into groups.
12. 1. Trade:
Trade is the exchange of the products from the seller to
the buyer.
A minimum of two parties are required in order to trade
to take place.
Trade can be within the local areas, within the national
boundaries or beyond the national boundaries.
13. a) Domestic/National/Home/Inland Trade:
The trade that takes place within the national
boundaries of a country is termed as domestic
trade.
i. Wholesale Trade:
The trade that involves dealing in large quantities of
goods it is termed as wholesale trade.
ii. Retail Trade:
The trade that involves dealing in small quantity of
goods it is termed as retail trade.
14. b) Foreign/External/International Trade:
The trade that takes place beyond the national boundaries
of a country is termed as foreign trade.
i. Export trade:
• In export trade a seller from one nation sells goods to a
buyer in another nation.
ii. Import trade:
• In import trade goods are being bought by a buyer in one
nation from a seller in another nation.
iii. Re-export or Entrepot Trade:
• In re-export trade ,the goods which are imported from one
country is exported in the same form to another country.
15. 2. Aids To Trade:
Aids to trade are the help and ancillary
services provided to trade.
Aids to trade are the
services provided for
the smooth functioning
of the trade as well as
industrial activities.
16. a) Banking:
• A bank is an institution which borrows money from the
depositors at a lower rate of interest with an objective
to lend it at a higher rate of interest.
b) Insurance:
• Business activity comprises of risks and uncertainties.
• All insurable risks can be insured by the business firms
with the insurance companies.
• In the event of that event occurring the business firm
will be compensated for their claims.
c) Tele-communication:
• For the success of any business activity timely
communication is most vital.
• Modern tele-communication devices facilitates
communication without any barriers of time or distance.
17. d) Transport:
• Transport creates place utility.
• Transport moves the goods from the
place of surplus to the place of scarcity.
d) Warehousing:
• Warehousing creates time utility.
• Warehousing stores the goods and
preserves its quality till it is actually
delivered to the customers.
e) Advertising:
• Advertising is any paid form of non-personal presentation and
promotion of ideas, goods and services by the identified
sponsor.
• Advertising helps in creating and building powerful brand
images in the minds of targeted audience.
f) Salesmanship:
• Salesmanship involves personal, one-to-one sales conversation
which aims at including the prospect to purchase the product.
