Classification of businesses

Primary sector

Extract natural resources → supply raw materials to other businesses → enable manufacturing and production → generate income from resource sales.

Secondary sector

Convert raw materials into finished goods → add value to materials → sell products at a higher value → generate revenue and profit.

Tertiary sector

Provide services to consumers or businesses → satisfy needs without manufacturing physical goods → earn service income → support the other sectors of the economy.

Private sector

Business is owned by individuals or companies → owners make commercial decisions → profits may be reinvested or distributed to shareholders.

Public sector

Government owns or funds an organisation → service provision may take priority over profit → the organisation can support public needs that private businesses may not adequately meet.

Privatisation

Transfer ownership from government to private owners → stronger commercial incentives may encourage efficiency → costs may fall → profitability may improve.

Evaluation chains-Classification of businesses

Privatisation can increase efficiency, but if competition is weak, a private provider might raise prices or reduce service quality.

Primary-sector businesses depend heavily on resource availability and commodity prices, whereas service businesses may depend more on customer demand and employee skills.

Sector classification alone does not determine success; productivity, demand and management also matter.