Business Industries

Business industries allow us to easily group companies and organizations that produce or distribute similar goods, services, or resources. Every company belongs to at least one or more industries. Companies can be highly specialized and operate in a single sector, or they can focus on multiple sectors at the same time, in which case these companies are called conglomerates. Industries can be classified into three categories: primary, secondary and tertiary.

Primary industries include sectors that provide raw materials, such as agriculture, and can be divided into two broad categories: genetic industries and extractive industries. The genetics industry can be artificially increased, while the extractive industry cannot increase production in any way. The secondary industry basically includes manufacturing, and the tertiary industry is the service industry, including transportation, hotels, and investment.

Industries and Sectors: An Overview

Although they sound similar, the terms industry and sector have slightly different meanings. The industry refers to a more specific company or group of companies, while the term industry describes a broad area of the economy.

The word industry and sector are mostly used interchangeably to describe a group of companies operating in the same sector of the economy or engaging in similar activities. The term sector generally refers to a broader and general part of the economy, while the term industry is more specific.

The two terms are sometimes reversed. But the general idea remains: one divides the economy into several general parts, while the other divides them into more specific business activities. In the stock market, generally accepted terms refer to industries as broad classifications and industries as more specific classifications.

Important things to remember

• The term industry refers to a group of companies operating in similar lines of business, with a more limited classification

• A sector refers to the part of the economy into which many companies can be grouped and is larger in comparison

• Investors can easily compare investment opportunities in companies in the same industry

• Shares of companies in the same industry usually trade in the same direction because their fundamentals are also influenced by market factors

• There are four distinct sectors in the economy: primary, secondary, tertiary, and quaternary industries

Four Types of Business Sector

There are four types of business: primary, secondary, tertiary, and quaternary. Each consists of many companies, ranging from small businesses to large corporations. Within each sector, we see the many industries in which the company operates.

How is industry different from industry?

Industry – Consists of companies with similar products that compete directly with each other. In industry, companies are in direct competition. For example, Toyota and Ford in the automotive industry. However, they can compete indirectly with companies in other industries. For example, companies in the aviation industry indirectly compete with companies in the railway sector for passenger transportation.

Sector – A group of industries with certain characteristics. For example, the manufacturing industry includes various industries such as the food industry, the beverage industry, and the clothing industry. They have something in common, processing the input into the final output. For example, the food industry differs from the agricultural sector in that it does not produce agricultural raw materials. Instead, the food industry buys raw materials from companies in the agricultural sector and then processes them.

Primary industry

Major sectors include various companies engaged in extracting or harvesting products from nature. They produce raw commodities from secondary industries. Some are also used for final consumption, such as staple foods.

1. Primary Sector

The primary sector includes various sub-sectors, including:

• Agriculture

• Forestry

• Fishing

• Excavation

• Mining

This segment also includes simple processing activities such as packaging and processing raw materials.

2. Secondary sector

The secondary industry includes several companies that process raw materials into products. Production can be finished or semifinished. The semifinished products will then flow to other companies in the industry. So generally, this sector produces the final output.

Secondary industries include manufacturing, construction and utilities. Well for production companies it can be very diverse, for example:

• Food

• Drinks

• Tobacco products

• Textile

• Clothing

• Paper

• Basic metal

• Electronics

• Furniture

You can view details of the International Standard Industrial Classification (ISIC).

3. Tertiary Industry

The tertiary sector includes several companies engaged in the service sector. They provide business services to companies and the public in the primary and secondary sectors. They contain:

• Wholesalers and retailers

• Warehouse Logistics

• Transportation

• Bank

• Safety

• Restaurant

• Hotel

In developed countries, firms in this sector account for a large share of economic output and employment.

4. Quarter sector

The fourth industry is the intellectual service industry. Examples are computer services, information technology, research and development and internet services. Some classifications may still classify it as a tertiary industry. However, due to its significant contribution to the economy, the sector has become a unique sector in developed countries.

Companies in this industry serve three other industries. For example, information technology companies provide services to manufacturing companies, agri-food companies, and service companies such as banks and hotels.

Standard List of Industries

A. Agriculture; Forestry and Fisheries

B. Mines and quarries

C. Manufacturing:

D. Electricity; Supply of Gas, Air Conditioning and Steam 

E. Water supply; remediation, remediation activities and waste management

F. Construction

G. Retail trade and Wholesale; motorcycle repairs and auto

H. Shipping and Storage

I. Accommodation and catering activities

J. Information and Communications

K. Financial and Insurance Activities

L. Real Estate Activities

M. Professional, scientific and technical activities

N. Administrative and Support Services Activities

O. Public administration ; compulsory social security and defence

P. Education

Q. Human health and social work

R. Arts, Recreation and Recreation

S. Other Service Activities

T. Activities of households as employers; activities of indiscriminate production of household goods and services for own use.

Conclusion

Each company is divided into different industries based on the market for the products and services it manufactures. These industries are classified according to the specialization of the goods and services they provide. While some companies belong to one industry and provide industry-specific goods or services, there are also businesses that target multiple industries at the same time. The business industry refers to a specific group of companies operating in a similar business area. Essentially, industries are created by dividing sectors into more defined groups. Thus, these companies are classified into more specific groups than sectors. Each of the dozens of industries will have a different number of industries, but there may be hundreds.