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Class : 11
Unit : Business


Discuss the components of business.

Ans : Business is the production, distribution and exchange of goods and services to satisfy human wants with view to earn profit. Business covers large area. Business means the whole compels field of commerce and industries. It involves all economics activities. Business activities can be broadly divided into three categories. A. Industry B. Commerce C. Service Enterprises A. Industry:- Ans:- Industry involve production of goods and services through the use of raw materials. Some industries produce industrials products where as others are involved in the production of consumers goods. The following are the different types of industries: i) Genetic industry:- It is type of primary industry which is involved in production of plants and animals. For example:- Nursery, Poultry farm, Animal breeding farm etc. ii) Extractive industry:- These industries are engage in the extraction of different raw materials and products having commercial value from beneath the earth surface, water, air. For example: mining, hunting, fishing etc. iii) Construction industry:- These industry are related to construction of infrastructure development work such as construction of road, bridges, building, dam, etc. They use the product of manufacturing industries in construction work like cement, bricks, stone, rod, etc. iv) Manufacturing industry:- These industry converts raw materials into finished goods through some materials from genetic and extractive industry to produce final product. For example; cement industry collects limestone from extractive industry for the production of cement. It is sub derived into four parts. a) Analytical industry:- these industry produce various type of usable products from a single products. For example:-Dairy industry produce butter, ghee, cream, ice-cream etc. b) Syntheticall industry:- These industry produce a single product with the combination of two or more Cement fertilizers, soap etc. comes under synthetical industries. For example: cement industries use limestone, red soil, stones, clinker, chemical etc. for the production of cement. c) Processing industry:- These industries complete some process for the production of finished goods from raw materials. Textile fertilizer, medicine, sugar industry are its example. In textile industry cotton passes through stages like spinning, weaving, dyeing, and bleaching before production of clothes. d) Assembling industry:- These industries assemble various types of component or part to produce a usable product. Example: Radio, T.V, Computer Vehicle etc. B. Commerce Ans:- Commerce is one of the important components of business. It is concerned with the buying, selling and distribution of goods and services. It is concerned with the supply of goods and services to the consumer at eight places, at eight times and at eight price. It plays the role of bridge between manufactures and consumer. It is classified into two parts:- (i) Trade (ii) Auxiliaries (i) Trade:- All the business activities other than industry is trade. It is concerned with the buying and selling of goods and services. It is an important branch of commerce engaged in the exchange of commodities between the producers and the consumers. It is also classified into two parts: a)Home trade:- It is also known as international trade or domestic trade. Buying and selling of goods and services within the boundary of country is known as home trade. Both the buyers and sellers are of the same country. Trade perform between the business man of Birgunj, Kathmandu, Pokhara etc. is an example of home trade. It is also two types of trade: # Wholesale trade:- The trading activities performed by the wholesaler is known as wholesale trade. They buy goods in large quantity with manufacturer and sell them to retailer. It provides link between producer and retailer. # Retail trade:- The trading activities performed by the retailer is known as retail trade. They buy large quantity with wholesaler and sell them to final consumers at small quantity. It provides link between wholesaler and consumers. b) Foreign trade:- It is known as international trade. The buying and selling of goods with foreign countries is known as foreign trade. Both the buyers and sellers are from different countries. In foreign trade, buyer is known as importer. Trade between the business man of Nepal and India, Nepal and China etc. It is of three types: # Export trade:- It is concerned with the selling of goods to foreign countries. The seller is known as exporter. For example: Nepal export carpet, garments etc. to foreign country. # Import trade:- It is concerned with the buying of goods from foreign countries. The buyer is known as importer. For example:- Nepal imports machinery and equipment, petroleum products etc. from foreign country. # Entry-port trade:- It refers to importing goods from one country for the purpose of exporting to other countries. For example: Nepal imports certain commodity from India and exports them to China. It is also known as re-exporting trade. (ii) Auxiliaries of Trade:- Activities which provide support to the trade is known as Auxiliaries of trade. It facilitates in buying and selling of goods. The important auxiliaries of trade are: a) Transportation:- Transport is used to deliver goods from one place to another place. Goods and services produced in a particular season are consumed by the consumer in various p-laces inside or outside the country. So, transportation plays crucial role in physical delivery of goods. It may be carried out through road ways, railways, airways, waterways, ropeways etc. b) Warehousing:- Warehousing is concerned with the storing of goods safely. Raw materials and finished goods are stored in warehouse so that it can be supplied where and when needed. It creates time utility. c) Communication:- The transmissio0n of views, news, ideas, information, etc. from one place top another place for various purpose is known as communicatio0n. Development of i9ndustry and trade highly depend on communication. Telephone, fax, email, internet, T.V, radio etc. are the means of communication. d) Banking and finance:- Business and trading house needs finance to run their business Bank and financial institutions provide loan and other services. They also help in making payment to creditors or suppliers who are located at distant places within the country or in foreign country. e) Insurance:- Insurance helps in sharing the risk involved in business operation. By paying the certain amount of premium the insurance company assures the risk of theft, fire, accident, death etc. f) Promotional Advertising:- Advertising is one of the major supporting services for business. It makes consumer aware about the availability of various goods in the market. The various means of advertisement are T.V, Radio, Newspaper, social media etc. C. Service Enterprises Ans:- Business organization are directly involved in service sector business. With the development and growth of information technology, services etc. have assumed very important role in modern business. Service sector covers by the business are: i) Education ii) Hospitals iii) Hotels iv) Travel Agencies v) Repair and maintenance vi) Cinema hall vii) Information services
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