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Understanding business (Sectors of industry (Primary- this consists of…
Understanding business
Sectors of industry
Primary- this consists of businesses that are involved in exploiting natural resources.Examples inlcude farming,mining and oil drilling.
Secondary- This consists of businesses that are involved in manufacturing and construction,by taking natural resources and turning them into goods that can be sold later. Examples include manufacture,car production and house building.
Tertiary- This consists of businesses and organisations that are involved in providing services rather than goods. Examples include retail outlets, banks, hotels and hospitals.
Quaternary- This consists of businesses providing information and knowledge based services such as:
-Ict
-Consultancy
-R&D
Sectors of the economy
Private-this consists of all businesses that aim primarily to maximise profits and includes all profit making business from your local bakery to multinational companies such as Ford and Samsung. Private sector organisations have limited liability. This means that the owners personal savings are not at risk and they only lose what they invested if the company gets into debt. They are owned by shareholders,controlled by a board of directors and financed by the shareholders investments. Shares are not available to the general public and are sold privately to investors whom the business knows,such as employees.
Public- This consists of government owned organisations and agencies which aim to provide a service to society. This sector of the economy includes the NHS, police and state education. Public limited companies are owned by the government , controlled by a board of directors and financed through taxes.
Third- This consists of organisations that have been set up to provide goods or services to benefit others. This sector of the economy includes:
-Charities such as Cancer Research and the SSPCA
-voluntary organisations such as golf clubs and Scouts groups
-social enterprises
-democratic enterprises such as co-operatives
Third sector organisations are not owned by one person instead they are set up as a trust. They are controlled by a board of trustees, run by volunteers and financed through donations
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Voluntary organisations- aim to provide a service for their members and the local community. for example a sports club, golf club or youth football team.
Social enterprises- are organisations that aim to make a profit a specific group or cause e.g. The Big Issue
Franchise
A franchise is a business that allows businesses to pay a sum of money to own a branch of a well known, existing business. Each original branch is known as a franchiser and the owner of the individual branch is called a franchisee.
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Central government
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Local government- Scotland is split up into local authorities such as East Lothian Council ,Edinburgh Council
Maximising profits- means bringing in more money through sales, than they spend on purchasing materials, and other running costs of the business such as wages and rent.
Maximising profits- means bringing in more money through sales, than they spend on purchasing materials, and other running costs of the business such as wages and rent.
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