Chapter 6 Flashcards
(11 cards)
Business Sectors
The three business sectors form a chain of production from the source/origin of the product until it reaches consumers/customers.
The chain of production is interdependent to make meaningful/functional
goods/services available to consumers/customers.
The interaction between the three sectors makes it possible for various business operations to take place.
Primary sector
● The primary sector focuses on activities related to the
extraction/exploitation/cultivation/harvesting of natural resources/raw materials.
● It is often referred to as extractive/exploitative industries as it involves acquiring natural
resources/raw materials.
● The primary sector is dependent on nature/the natural environment because it utilises/uses the
earth’s natural resources, land, minerals, and vegetation.
● Examples of primary sector industries; mining, fishing, agriculture, forestry and farming.
Secondary sector
● The secondary sector focuses on activities related to the production/manufacturing of products.
● It uses the natural resources/raw materials sourced by the primary sector and adds value to
them.
● The secondary sector plays an important/critical role because not all resources in their natural
state are functional/useful and require further processing.
● Examples of the secondary sector industries; manufacturing, clothing, food processing, building
and construction are found in this sector.
Tertiary sector
● The tertiary sector focuses on activities related to providing final products and services to
consumers/customers.
● It is often referred to as the services sector because a variety/diverse range of commercial
services are provided to consumers/customers.
● The tertiary sector involves all activities aimed at making the distribution of products/services
possible.
● Examples of the tertiary sector industries; distribution, banking, insurance, tourism, transportation, entertainment, retail and legal services.
Business Environments
Changes within the
business environment affect businesses differently.
Businesses strive to address the
unpredictability within the three business environments in order to remain profitable/relevant.
Businesses must be aware of various challenges that may emanate from the three business
environments and the extent of control they have over these environments.
Micro Environment
Description:
● The micro environment refers to all the internal aspects of a business/refers to all resources/functions managed by the business.
● The micro environment refers to the internal environment in which the business operates.
Extent of Control:
Full/Complete
control
Market Environment
Description:
● The market environment refers to the immediate external environment.
● The market environment refers to
components/elements/factors immediately outside the business.
Extent of Control:
Some/limited/less/
partial control
Macro Environment
Description:
● The macro environment refers to the external environment that is directly outside the market environment.
● The macro environment refers to the uncontrollable factors/forces outside the business.
Extent of control:
No control
Common challenges of Market Environment
● Competition
● Supply shortages
● Changes in consumer behaviour
● Socio-cultural factors
Common challenges of Micro Environment
● Difficult/Unmotivated employees
● Lack of adequate management skills
● Lack of vision/mission
● Strikes/go-slows
● Outdated goals/objectives
Common challenges of Macro Environment
● Changes in income levels
● Political changes
● Contemporary legislation
● Labour restrictions
● Technological advances
