Introduction to

Business
Chapter # 01- nature and scope of business
For BBA 1st semester

Saba gul rehmat

 Division of Business or Components of
Business

 The scope of business is very wide it covers

activities related to production and distribution
of goods and services with the aim to earn
profit.

 Business activities can be divided into two parts

 Industry or industrial activities

 Commerce or commercial activities
 business

Industry Commerce
Industry
The term industry refers to that part of
business activity which is concerned
with the extraction or production of
products.
Goods produced by industry are used
by final consumer or are used for
further production .
Cont..

 Consumer goods:
 Goods produced by an industry which are used by the final
consumers are called consumer goods.(cloths , bread etc)
 Capital goods:
 Goods produced by industry and is used for further wealth
generation by other company like plant, machinery etc.
 Intermediate goods/semi finished goods :
 Good produced by an industry are further processed into
finished products by another company like steel , glass ,
salt, yarn etc
Types of industry
 Extractive industry:
 industries which extract raw material from above or
below the surface of earth like mining , oil,
petroleum extraction, gas drilling , coal mineral, etc.

 Genetic industries:
 Which are engaged in reproducing and multiplying
certain species of animal and plant and selling them
in the market for profit , for example cattle breeding
farms, poultry farms, plant nurseries.
 Types of industry
 Manufacturing industry:
 Which are concerned with converting the raw material or
semi finish goods into finished products. Like textile
industry, shoe making industry etc
 Construction industry:
 They are engaged in the construction of building,
bridges, dams etc.
 Service industry:
 They are engaged in creating intangible goods which
cannot be seen or touched like services of doctors,
lawyers, teachers etc
Commerce

 Commerce is concerned with the buying and

selling of goods. It includes all activities which
are related to the transfer of goods, from the
place of production to the final consumer.

 Commerce is classified into two main

categories
 Trade
 Aids to trade
Commerce

Commerce

Trade Aids to Trade

Trade
Trade means Buying and selling of
goods. it is the exchange of goods and
services among buyers and sellers in
which both the parties (buyers and
sellers)are benefited.
Types of trade

 Internal trade: The trade(buying and selling of

goods ) within the boundaries of the country .

a) Wholesale trade: To purchase goods in large

quantities from producers and resale to retailers.

b) Retail trade Activities related sale of goods and

services to the final consumers. here goods are
sold in small quantities to the consumer.
Cont..
External trade: Purchase and sale of
goods between two countries is called
foreign trade or external trade.

a) Import : the purchase of goods from a

foreign country.
b) Export :sale or supply of goods to a
foreign country.
Aids to trade

The activities which facilitate in the

purchase and distribution of goods
and services are called aids to trade.
These are Essentials for the
expansion of business.
Aids to trade

helps in carrying goods from

1. Transport :
the place of production to center of
consumption e.g., railway , ships , airlines
etc.

2. Insurance :the risk of damage of goods is

covered by insurance like fire, flood ,
earthquake etc.
Cont..
3- Warehousing :a place where goods are stored in
safe places and are release when demanded.
(storage facility for seasonal goods)

4- Banking: Banks and financial institutions ,

frequently provide loans under different
terms and conditions to the business ,banks
also help in receiving and making of
payments .