What are the Components of Business? Are industry and commerce the only components of Business?

Updated: Oct 19, 2019


What are the Components of Business? Are industry and commerce the only components of Business?
What are the Components of Business? Are industry and commerce the only components of Business?

Business includes the total enterprise of the country. Business activity has two branches. The two types of enterprises are as follows:

• Industry

• Commerce


Industry - Components of Business

In broad sense, industry is the branch of business activity which is concerned with raising production, fabrication or possessing of goods and services. In other words, industry is an activity concerned with conversion of raw materials or semi-finished goods into finished goods. Industry provides two types of goods namely consumer goods and industrial goods. Consumer goods are those goods which are manufactured by the industry for ultimate use of a customer. For instance brush, paste, cloth and food products, etc. Industrial\Capital goods are those goods which are produced and used for further production. For instance the machineries, tools and raw materials used in the various processes of production.


Types of industry - Industry is further classified into five broad types. They are as listed below:


• Extractive industries

• Genetic industries

• Manufacturing industries

• Construction industries

• Tertiary\Service industries


Extractive industries

Extractive industries are those industries which are concerned with the extraction of wealth from the surface of the earth, soil, forest, and water; for instance agriculture, mining, etc.


What are the Components of Business? Are industry and commerce the only components of Business?
What are the Components of Business? Are industry and commerce the only components of Business?

Genetic industries

Genetic industries are those industries which are concerned with reproduction and multiplication of plants and animals for the purpose of making profit by their sale. For example, Nurseries, cattle building and poultry farming.


Manufacturing industries

Manufacturing industries are engaged in the conversion and processing of raw materials through separation, combination and transformation into finished goods. Examples such as machinery and plants of all types- iron and steel, sugar, paper, cotton cloth, electrical appliances, zinc ore, paper pulp, water power, etc.


Construction industries

Construction industries are concerned with the construction of roads, railways, dams, canals, buildings, bridges. There are mainly concerned with the manufacture of non-moveable items.


Tertiary or service industries

Tertiary or Service industry is the one which produces intangible goods (those which cannot be seen or touched). Intangible goods included in this category are banking, transport, insurance, communication and services of professional nature such as lawyers, doctors, dentists, management consultants, advertisers, chartered accountants and engineers, etc.


Commerce - Components of Business

Commerce has been defined as “the sum total of those processes which are engaged in the removal of the hindrance of persons (trade), place (transport and insurance), and time (warehousing) in the exchange (banking) of commodities”.


Trade

Trade means sale, transfer, or exchange of goods and services, through certain ancillary functions like packing, warehousing, banking, transportation, insurance, and advertising.

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