Business, Sectors and Competition – GCSE Business Studies Revision

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Define

  • A business is an organisation that makes money by providing a good or service
  • A good is a physical product that the customer can take away with them
  • A service is a non-physical thing a business does for a customer
  • Customers are people who buy things from a business
  • Consumers are people who buy things
  • Suppliers are businesses that provide things for other businesses

Competition

  • Competitors are rival businesses trying to sell the same things to the same people
  • When a business is ginormous or controls everything, it is called a monopoly (even having 25% of the market share makes you a monopoly)
  • The government has special laws designed to stop monopolies from appearing
  • The main way companies compete is to have low prices so customers will come to them
  • To keep competition going and keep prices low, it is illegal for businesses to communicate with each other about what to do with their prices
  • If this wasn’t the case, they could just agree “we’ll charge £100 for everything” and things would be too expensive
  • Businesses also try to compete by launching new products or having better customer services, in the hope that it will draw in new customers

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  • There are three main industries; the primary, secondary and tertiary (third) sectors
  • The primary sector involves extracting/mining raw materials and selling them
  • The secondary sector involves making raw materials into products – manufacturing and assembling stuff
  • The tertiary sector involves providing services to help with selling things, such as advertising, transport and insurance
  • Companies in these three sectors are interdependent on each other… they couldn’t exist alone!
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