B USINESS S TUDIES Grade 11

T ERM 1 Business Environments and Business Operations

B USINESS SECTORS

5.1 I NTRODUCTION There are three economic sectors: 1. The primary sector 2. The secondary sector 3. The tertiary sector Every business enterprises in at least one of the three economic sectors.

5.2 P RIMARY ENTERPRISES Primary enterprises are responsible for extracting raw materials from the earth, e.g. farming and mining. Primary enterprises provide raw materials to secondary enterprises. Example; trees are cut down to be converted to timber.

5.3 S ECONDARY ENTERPRISES Secondary enterprises are responsible for converting raw materials received from primary enterprises into manufactured goods. Example; timber is cut into smaller pieces used to manufacture furniture, or pulverised to make paper

5.4 T ERTIARY ENTERPRISES Tertiary enterprises focus on distributing products from where products from where products are manufactured to the final consumer, which can either be individuals or other business enterprises. Tertiary enterprises also render services to individuals or other businesses enterprises. Example: furniture stores ted transport that was manufactured by secondary enterprises will now be to furniture stores to be within reach of consumers.

5.5 L INKS BETWEEN PRIMARY, SECONDARY AND TERTIARY ENTERPRISES Production starts in the primary sector. Primary enterprises need products from other enterprises. Example; extracting gold from the earth is a primary activity. In order to extract gold from the earth, people need different kind of tools and equipment. Sometimes, primary enterprises need products from other primary enterprises as well.

Example; a poultry farmer needs corn to feed his poultry. It is clear that the business operations of each sector depends on activities that are performed by other sectors. We can therefore say that primary enterprises, secondary enterprises and tertiary enterprises are linked. Secondary enterprises are responsible for converting raw materials into manufactured products. In order to do this, secondary enterprises need to acquire raw materials from the primary sector.

The secondary sector uses machines that were manufactured by other secondary enterprises and that were sold and distributed by tertiary enterprises. Tertiaty enterprises are responsible for distributing products and rendering services to consumers. In order to do this, tertiary enterprises need to acquire manufactured products from the secondary sector. Tertiary enterprises also need to make use of services rendered by other tertiary enterprises.

Example; a grocery store needs products from suppliers – often, suppliers are tertiary enterprises. These products are transported by a transport company (tertiary enterprises) from the supplier to the grocery store. The grocery store needs to insure the products with an insurance company (tertiary enterprises). The grocery store also needs banking services (tertiary enterprise) and marketing services (tertiary sector) to buy supplies and sell products.