Types of Business Activity

IshaM
Flashcards by IshaM, updated more than 1 year ago
IshaM
Created by IshaM over 6 years ago
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The second chapter in the business IGCSE course

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Question Answer
Levels of business activity The three main stages which are typical to nearly all production.
Primary Sector of industry extracts and uses the natural resources from the earth.
Secondary Sector of industry manufactures goods using the raw materials provided by the primary sector.
Tertiary Sector of industry provides services to consumers and the other sectors of industry.
De-industrialisation occurs when there is a decline in the importance of the secondary (or manufacturing) sector of industry in a country.
Free market economy has no government control over factors of production.
Command Economy Does not have a private sector as all resources are owned by the state.
Mixed Economy Has both a private sector and a public sector.
Monopoly A business which controls all of the market for a product.
Private sector Made up of businesses not owned by the government.
Public sector Made up of government, or state-owned, businesses and controlled businesses and organisation.
Privatisation The transfer of ownership of businesses from the government to the private sector.
Nationalisation The process of taking a private industry into public ownership by a national government or state.
Capital The money invested into a business by its owners.
Internal Growth When a business expands its existing operations.
External Growth/Intergration When a business works with, takes over or merges with another business.
A merger When the owners of two or more business decide to join their firms together and make one business.
Takeover/Acquisition When one business buys out the owners of another business which then becomes part of the 'predator' business.
Horizontal Intergration When one firm merges with, or takes over, another business in the same industry at the same level of production.
Vertical Integration When one firm merges with, or takes over, another business in the same industry but at a different stage of production.
Forward Vertical Intergration When one firm merges with, or takes over with another business in the same industry but at a higher stage of production.
Backward Vertical Intergration When one firm merges with, or takes over with another business in the same industry but at a lower stage of production.
Conglomerate Intergration/ Diversification When one firm merges with, or takes over, a firm in a completely different industry.
Niche An opportunity for a business to offer a product or service that is not offered by other businesses.
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