Following this presentation you will:
- Understand what business activity involves
- Identify the inputs, outputs and process of the business
- Identify business main functions
- Understand the main sectors of industry
2. Objectives
• Understand what business activity involves
• Identify inputs, outputs and processes of
business
• Identify and explain business main functions
• Identify and explain the main sectors of
industry
by: Shadi A. Razak 2
3. Structure
• What Business Do?
• Business Motivations, Objectives and
Functions
• Sector, Industry and Market
• Industry Sectors
• Business Sectors
by: Shadi A. Razak 3
4. What Business Do?
• Meet the needs of stakeholders
• Buy inputs (raw materials, labour, machinery and
equipment, land)
• Produce outputs (goods and services)
• Generate profit/surplus
by: Shadi A. Razak 4
DEFINITION
5. What Business Do?
by: Shadi A. Razak 5
DEFINITION
Take
Inputs
Process/
Manufacture
Output
Cost: Fixed and Variable
Revenue
Profit
6. What Business Do?
• Business uses a combination of inputs to make
outputs:
– Land
– Labour
– Capital
– Enterprise / Entrepreneurship
by: Shadi A. Razak 6
DEFINITION
7. What Business Do?
• Who are the stakeholders?
– Customers
– Managers
– Employees
– Owners
– Local Community/Environment
– Suppliers
– Government
by: Shadi A. Razak 7
DEFINITION
8. What Business Do?
• Businesses exist to provide goods or services
• Whether or not they have to make a profit,
businesses have to satisfy customers’ wants or
needs
• There can be many different motivations for
people to set up in business
by: Shadi A. Razak 8
DEFINITION
9. Business Motivation
• Fed up with working for someone else
• Quality of life
• Buzz of success
• Feel in control
• Financial reward
• “I could do better than that!”
by: Shadi A. Razak 9
DEFINITIONMOTIVE, OBJECTIVES & FUNCTIONS
10. Business Objectives
• Whatever the motivation, a business is set up
solely to provide customer satisfaction.
• Survival
• Financial security
• Market growth
• Social Image
by: Shadi A. Razak 10
DEFINITIONMOTIVE, OBJECTIVES & FUNCTIONS
12. Business Functions
• Business usually have five main functional
areas:
– Finance & Accounting
– Marketing
– Sales
– Human Resource
– Production
by: Shadi A. Razak 12
DEFINITIONMOTIVE, OBJECTIVES & FUNCTIONS
14. Business Start-up Problems
• Finance
• Location
• Developing customer base / brand loyalty
• Poor cash flow
• Personality of entrepreneurs
• HR Management Skills
by: Shadi A. Razak 14
DEFINITIONMOTIVE, OBJECTIVES & FUNCTIONS
15. Sector, Industry and Market
• A sector is a broad industry group (or a group of
markets) especially in the public sector (e.g. the
health sector)
• An industry is a group of firms producing
products and services that are essentially the
same. For example, automobile industry and
airline industry.
• A market is a group of customers for specific
products or services that are essentially the same
(e.g. the market for luxury cars in Germany).
by: Shadi A. Razak 15
DEFINITIONMOTIVE, OBJECTIVES & FUNCTIONSSECTOR, INDUSTRY & MARKET
16. Sector, Industry and Market
by: Shadi A. Razak 16
DEFINITIONMOTIVE, OBJECTIVES & FUNCTIONSSECTOR, INDUSTRY & MARKET
17. Industry Sectors
• Business activities can be classified into four
economic sectors of industry they are active
within:
–Primary Sector
–Secondary Sector
–Tertiary Sector
–Quaternary Sector
by: Shadi A. Razak 17
DEFINITIONMOTIVE, OBJECTIVES & FUNCTIONSSECTOR, INDUSTRY & MARKETINDUSTRY SECTORS
18. Industry Sectors
by: Shadi A. Razak 18
Primary Sector extraction of raw materials from the earth – mining,
quarrying, fishing, agriculture, forestry
Secondary
Sector
Processing of raw materials into finished or semi-finished
products – manufacturing
Tertiary Sector Service industries – leisure, transport, finance, distribution,
retailing, wholesaling, communications
Quaternary
Sector
Hi tech industries, training, health, education
DEFINITIONMOTIVE, OBJECTIVES & FUNCTIONSSECTOR, INDUSTRY & MARKETINDUSTRY SECTORS
19. Industry Sectors
• Tertiary Sector : transport, energy, water (utilities)
• Quaternary Sector : finance and trading
• Quinary Sector: health, education, research, leisure
and recreation
(After Daniel Bell: 1976 ‘The Coming of Post Industrial Society’)
by: Shadi A. Razak 19
DEFINITIONMOTIVE, OBJECTIVES & FUNCTIONSSECTOR, INDUSTRY & MARKETINDUSTRY SECTORS
20. Industry Sectors
• Multiple Industry Business: British Petroleum
(BP)
– Oil exploration and drilling (Primary)
– Refining oil – production of gas, petroleum,
bitumen, lubricants, etc. (Secondary)
– Distribution of petrol from refineries to petrol
stations and sales of petrol to consumer
(Tertiary)
– Research and Development (Quaternary)
by: Shadi A. Razak 20
DEFINITIONMOTIVE, OBJECTIVES & FUNCTIONSSECTOR, INDUSTRY & MARKETINDUSTRY SECTORS
21. Business Sectors
• Business activities and organization's can be
classified into two major sector of classes
based on:
– The nature of the business activities
– The source of its funding
by: Shadi A. Razak 21
DEFINITIONMOTIVE, OBJECTIVES & FUNCTIONSSECTOR, INDUSTRY & MARKETINDUSTRY SECTORS BUSINESS SECTORS
22. Business Sectors
• Private Sector: Business activity owned,
financed and controlled by private individuals
and its main objective is generating profit:
– Sole Traders
– Partnerships
– Private Limited Companies
– Public Limited Companies (PLCs)
– Co-operatives
– Franchises
by: Shadi A. Razak 22
DEFINITIONMOTIVE, OBJECTIVES & FUNCTIONSSECTOR, INDUSTRY & MARKETINDUSTRY SECTORS BUSINESS SECTORS
23. Business Sectors
by: Shadi A. Razak 23
Objectives
Profit
Survival
Share Price
Market Power
Sales and Sales
Revenue
Efficiency
Quality and
Innovation
Environment
Satisficing
Social Issues
DEFINITIONMOTIVE, OBJECTIVES & FUNCTIONSSECTOR, INDUSTRY & MARKETINDUSTRY SECTORS BUSINESS SECTORS
24. Business Sectors
• Public Sector: Business activity owned,
financed and controlled by the state via
government or local authorities and its main
objectives to socially serve the nation :
– Key government departments that set policies and
monitor implementation
– Local Authorities: County Councils, District Councils,
Parish Councils
– Public Corporations: British Broadcasting Company
(BBC)
by: Shadi A. Razak 24
DEFINITIONMOTIVE, OBJECTIVES & FUNCTIONSSECTOR, INDUSTRY & MARKETINDUSTRY SECTORS BUSINESS SECTORS
25. Business Sectors
• Public Sector objectives:
– Access: available to all regardless of location or income
– Quality: high quality services that do not cut corners
– Affordability: services offered at prices that are cheaper
than private sector or free at the point of use
– Equity: available to anyone whatever their background,
status, income, class, race, religion, etc.
by: Shadi A. Razak 25
DEFINITIONMOTIVE, OBJECTIVES & FUNCTIONSSECTOR, INDUSTRY & MARKETINDUSTRY SECTORS BUSINESS SECTORS
26. Summary
• Explained what business do mean and what it
includes
• Understood the relation between inputs, outputs
and processes of business
• Identified and explained business main functions
• Identified and explained the main sectors of
industry
• Identified and explained the main business
sectors
by: Shadi A. Razak 26
DEFINITIONMOTIVE, OBJECTIVES & FUNCTIONSSECTOR, INDUSTRY & MARKETINDUSTRY SECTORS BUSINESS SECTORS
