Sara Inglish, the office manager of American businesses, keeps track of the family’s expenses and pays bills. Sara works for American businesses and millions of other people in the United States and around the world. Consumer is a person who buys goods such as clothes, computers, food, and sporting goods. The consumer also buys services such as trips to the dentist and repairs for their automobile.
The story of American business is a fascinating one. The range of products found in homes comes from countless types and sizes of businesses. The Inglishes’ newly acquired sleeping bag could have been purchased from a vendor at a local farmers’ market.
These and scores of other products found in homes are made by thousands of companies from around the world. Many of these companies must purchase hundreds of computer parts from other companies at very competitive prices. The treats for Marta’s day-care center may be baked by one of the 15 employees of the neighborhood bakery.
Nature of Business Activities
Companies engage in production, distribution, and sales. Companies produce products or provide services, which are sold. Companies may engage in other activities, such as research and development, advertising, and customer service. The production function involves innovation, production, and quality control. The distribution function involves marketing, transportation, and sales. The sales function involves pricing and distribution.
Service firms need employees who can provide customers with what they need. Manufacturing firms rely on machines and technology to create products.
When people think of a service economy, they think of industries like restaurants, airlines, doctors’ offices, and home repair. When manufacturing firms began leaving the area, people began moving from the manufacturing side to the service sector.
“Businesses involve a number of activities to get and keep customers. Marketing includes all of the activities between businesses and customers that may involve creating advertising, delivering goods and services, and collecting payments for goods and services. The third activity, finance, involves all of the finances involved in running the business.
Sara Inglish is willing to pay a higher price for Paul’s computer game because demand is high. Demand means the number of people interested in buying the product. If there are not very many similar games available, Sara Inglish will be willing to pay a lower price because it is harder to find.
Types of Businesses
In general, there are two major kinds of businesses—industrial and commercial. Industrial businesses produce goods used by other businesses or organizations to make things. Companies that mine coal or ore and that extract oil and gas from the earth provide resources for use by other companies and companies. Companies that manufacture goods like machinery, chemicals, and food products are examples of industrial businesses.
Industrial businesses are important because they generate essential goods that sustain life, and they do all of that at a lower cost than other businesses. Farmers are important because they grow food that we eat, and they do all of it at a lower cost than other businesses.
Commercial businesses are different from industrial businesses, which produce tangible goods. A business that engages in marketing, finance, and services is one commercial business.
Services are a type of commercial business. There are different types of service businesses. Service businesses are usually small in size. They are categorized into two groups: service-providing industries, such as food services and accommodation services, and transportation and logistics services.
The word Industry is a broad term that includes any sector or sector of the economy that produces or manufactures a product. For example, the publishing industry includes all businesses that produce and sell books, magazines, newspapers, and other printed documents prepared by authors. The automotive industry includes many businesses that produce and sell cars and other transportation vehicles.
Governments are businesses that provide services to the public. Each country has a government that provides services to its citizens. Governments are often referred to as industries because of the services they provide.