Scope of Business
The term “business” has a broader definition than “trade” and “commerce.” Trade and commerce are frequently used inter changeably .intactone
One of the subsets of commerce is trade. The exchange of commodities and services is a concern. It carries out the middleman role and moves commodities from the producer to the customer in this way. However, the term “commerce” has a broader definition. It covers both “Trade” and “Aides to trade,” or the different things that make trading easier.
Industry: –ccsu bba notes
The term “industry” describes the area of commercial activity concerned with the extraction, manufacture, or creation of goods. The final customer or another company for more manufacturing may use the items that are raised, produced, or processed by an industry. Consumer’s goods, such as clothing, are defined as products made by an industry that are used by the final consumers. When products are utilized to create more wealth, they are referred to as capital or producer goods. The term “intermediate goods” refers to things created by one industry that are later transformed into finished goods by a different company, such as plastic.
Types of Industry: –
The activity-based classification of the industry further divides it into the following types: –
- Extractive Industries
Industries classified as extractive are those that mine, raise, or manufacture raw materials above or below the earth’s surface. i.e., mining, forestry, fishing, and agriculture.
- Genetic Industries: –
Genetic industries are those that work to reproduce and multiply particular kinds of animals and plants with the intention of reselling them for a profit. e.g., plant nurseries, poultry farms, and cattle breeding operations.
- Constructive Industries: –
As the name suggests, construction industries are involved in the building of buildings, canals, bridges, dams, roads, etc. ccsu notes
- Manufacturing Industries
Manufacturing industries are those which are concerned of converting raw material or semi finished products into finished products. E.g. Shoes Company, Textiles Mills.
(v) Service Industries
Service industries are usually engaged in the manufacturing of intangible goods which cannot be seen or touched by naked eye. The service of professionals such as doctors, lawyers is examples of service industries.
(vi) Commerce
The second element that comes in the scope of business is Commerce. It is a very important component of business and is concerned with the buying and selling of goods. It includes all the activities which are connected to the transfer of goods from the place of production to the ultimate consumers. The whole ranges of commerce activities are classified are as under: –
Trade
The process of buying and selling of goods is called Trade. It is the exchange of goods and services among buyers and sellers in which both the parties are benefited. Trade is classified into two types.
(i) Internal Trade
The process of buying and selling of goods within the edge of a country is called internal trade.
Wholesale Trade. The process of purchase of goods in huge quantity from producers and their resale to retailers is known as wholesale trade. The retailer then further sells these goods to the final consumers.
Retail Trade. The retailer sale the goods and services to the ultimate consumers is known as Retail Trade.
(ii) External Trade
The purchase and sale of goods between two countries are called external trade. It is also called foreign trade. There are two types of external Trade.
Import Trade
Export Trade.
Aid to Trade
The activities which help in the purchase of goods and services are called aids to trade. The aids which are compulsory for the development of the trade are as follows: –
(i) Transport
The different ways of transport help in carrying goods from the places of production to centers of utilization e.g. Railways, ships, airlines etc.
(ii) Insurance
Insurance is very essential aid to trade. The risk of damage of goods due to fire, flood, earthquake or other causes us covered by insurance.
(iii) Warehousing
Warehousing is a kind of storeroom. Nowadays most of the goods are produce in anticipation of demand. They are stored in safe places and are released as and when demanded in the market. Warehousing thus helps in overcoming the barrier of time and creates time utility.
(iv) Banking
The commercial banks play a vital role in financing the different trade activities. They are funding the traders for stock holding and transportation of goods. They also support the buyers and sellers of goods in receiving and making payments, both at the national and worldwide level. The credit facility in the form of cash credit, overdrafts and loans is provided to the traders.
(v) Advertisement
Selling of goods is the most difficult problem for the producer. Advertisement regarding the product through newspapers, magazines, radio and television has greatly helped the consumers in choosing the goods of their taste. So advertisements play a vital role in increasing sale of goods.
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