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Classification of business activities.

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Concept 4.

Classification of business activities.
Business is classified into two:
a. Industry
b. Commerce.
Industry : It is a group of companies which manufactures similar products and similar services to
similar consumers. Example: Software industry, textile industry.
Industry is further classified as:
a. Primary industry: It is a industry which concentrates in production of goods and services with the
help of nature. Example: agriculture, farming etc.
B.Genetic industry: It is a industry which focuses in multiplication of species for purpose of sale.
Example: poultry farming, cattle breeding etc.
C.Extractive industry: It is a type of industry which concentrates on extraction of raw materials from
beneath the surface of earth. Example: oil industry, coal industry, mining industry etc.
D. Construction industry: It is the industry which focuses in construction of dam, road, canals and
flyovers. It focuses on development of infrastructure.

E.Manufacturing industry: It is the industry which focuses on conversion of raw materials to finished
products. Example: paper industry, sugar industry etc.
F.Service industry: This industry focuses on providing services to the consumers along with goods.
These services include insurance, hotel services, aviation services,outsourcing etc.
2. Commerce: Commerce includes buying and selling of goods along with their distribution. Commerce is classified into two:
a. Trade
b.Aids to trade
Trade: Trade is an organized market for buying and selling of goods. It is classified into two:
a.Home trade
b.Foreign trade.
Home trade: Trade which happens within the boundaries of the country. Example: Sale which
happens within India is called Home trade. It is further classified into two:
a. Wholesale trade
B.Retail Trade
Wholesale Trade: It is a trade which happens between Producers and retailers. The wholesalers buy
large quantities from wholesalers and then sell in small quantities to retailers.
Retail trade: It is a trade which happens between Retailers and final consumers. They are in last link
in the distribution channel. They buy in small quantities from retailers and sell it to final
consumers.They are more important in distribution channel because they are in ultimate link with
Foreign trade: It is trade which happens between two are more countries. Example Export and Import.
It is classified into three:
Import trade.
Export trade.
Entrepot trade.
Import trade: It is buying of goods from other countries. Example India purchasing raw materials or
goods from china.

Export Trade: It is selling of goods to other countries. Example India selling goods like coffee,
vegetables etc to other countries.
Entrepot trade: It is importing of goods for the purpose of reselling or exporting to other countries.
Example: India purchases raw materials from Japan processes it or assembles it and resells it to USA.
Aids to trade:-
Trade or exchange of goods involves several hindrances which are removed by auxiliaries( supporting)
known as aids to trade.
The various aids to trade are as follows:-
1. Transportation:
Trade faces hindrances with respect to place and this hindrance is removed with the help of
transportation.There are several kinds of transport such as land, water and air.
2. Trade:- Business faces a personal hindrance where buyers and sellers cannot simulataneously
meet and their hindrance is removed with the help of trade.
3. Warehousing: Trade faces a hindrance with respect to time and this obstacle is removed with
the help of warehousing where goods are stored to meet the future demand of products on a
seasonal basis.
4. Insurance:- Every business faces risk and this hindrance is removed with the help of insurance
which protects the traders against financial loss resulting from fire ,theft etc.
5. Banking:- Commerce faces an hindrances with the respect to working capital finance and this
hindrance is removed with the help of banking where the traders enjoy the loans provided by
the banks and the banks safeguard the traders money and facilitate the payment of huge sum
through cheques.
6. Knowledge:- Commerce develops an hindrance of knowledge that is removed with the help of
advertisements and media.
7. Technology:- Commerce removes the hindrance that arises between the buyers and sellers
with the help of technology where online trading acts as a medium of exchange.

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