BUSINESS SECTORS AND THEIR ENVIRONMENTS CHAPTER 9

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BUSINESS STUDIES

GRADE 12
TERM TWO
CHAPTER 9
NOTES ON BUSINESS SECTORS AND THEIR
ENVIRONMENTS
REVISED

TABLE OF CONTENTS

TOPICS PAGES
Exam guidelines for business sectors and their 2
environments
Terms and definitions 2
Types of business sectors 3
Possible challenges, their environments & 4
extent of control
Example of a scenario on the primary sector 5
Example of a scenario on the secondary 5
sector
Example of a scenario on the tertiary sector 5-6
Example of a direct question on business
environments and the extent of control 6

This chapter consists of 6 pages

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CONTENT DETAILS FOR TEACHING, LEARNING AND ASSESSMENT PURPOSES

Learners must be able to:
 Name THREE types of business sectors: primary, secondary and tertiary.
 Identify/Name a business sector from given scenarios/statements.
 Identify business challenges from given scenarios/case studies and classify them
according to the THREE business environments.
 State/Explain the extent to which a business (operating in any of the three sectors)
can control the three business environments from given scenarios and case studies.

TERMS AND DEFINITIONS

TERM DEFINITION
Business Sector A business sector is a sub division/subset of the economic activities, e.g.
Primary sector primary,
This secondary
sector and
deals with tertiary. of raw materials and natural resources.
extraction
Secondary sector This sector processes raw materials into finished goods.
Tertiary sector This sector renders services to other businesses/provides auxiliary
Business Environments services.
All the internal and external factors that affect the functioning of a
Micro environment business,
This e.g. micro,
environment market
is the and macro
business itself, itenvironments.
consists of all the elements
Market environment insideenvironment
This the business.
exists immediately outside the business.
Macro environment This environment exists outside the micro and the market environments.
Extent of control The amount of influence that a business has on the business
environments.

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Introduction
Learners are supposed to select a business from each sector and describe the three
environments related to these sectors and the extent to which a business can control these
environments.

They are supposed to describe the three business environments related to the three
business economic sectors and give an explanation of the extent to which a business can
control these environments.

Business sectors
Business sectors are sub divisions/subsets of economic activities, e.g. primary, secondary
and tertiary.

1 Types of business sectors

1.1 Primary sector

 This sector deals with extraction of raw materials and natural resources.
 Natural resources which are not man made like coal, gold, fish and livestock are
extracted from this sector.
 Examples the primary sector industries; mining, mining, fishing, agriculture, forestry and
farming

1.2 Secondary sector

 This business sector is responsible for changing the raw materials acquired from the
primary sector into useful products.
 It includes the manufacturing factories, construction and energy generation
 Examples of the secondary sector industries; manufacturing, clothing, food processing,
building and construction are found in this sector.

1.3 Tertiary sector

 This sector renders services to the public and businesses.
 It includes services from transport, banking, legal and health.
 Examples of the tertiary sector industries; distribution, banking, insurance, tourism,
transportation, entertainment, retail and legal services.
NOTE: You must be able to name the above mentioned business sector from given
scenarios/statements

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2 Possible business challenges, their environments and extent of control

Possible challenges Business environment Extent of control
 Difficult employees/ High rate
of absenteeism
 Lack of vision and mission Full control
 Lack of adequate Micro environment
management skills
 Unions, strikes and go-slows

 Competition Market environment Partial/Some/Limited/Less

 Shortages of supply control
 Demographics and
psychographics
 Socio-cultural factors
 Change in income levels Macro environment No control
 Contemporary legislation
 Labour restrictions
 Political changes
 Interest rates
 Socio-economic issues
 HIV and AIDS
 Globalisation and International
challenges

NOTE: You will only be able to do the following:

 Quote business challenges from the scenario
 Classify these challenges according to the business environments
 The challenge must be linked to the business environments
 State the extent of control businesses have over each business environment.
 The extent of control must be linked to the business environment

Examples of how the business sectors and their business

environments can be assessed

Example 1: Business in the primary sector

1 Read the scenario below and answer the questions that follow:

DUKA MINES (DM)

Duka Mines specialises in the extraction of platinum. Their suppliers of mining equipment
have increased their prices by more than 20%. The supervisor does not have a good
working relationship with his employees. DM can no longer export their products due to an
increase in the exchange rate.

You need to identify the business sector in which Duka Mines operates and motivate
your answer by quoting from the scenario.

Duka Mines is operating in the primary sector becauses the business specialises in the
extraction of mines.

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You need to quote challenges from the above scenario, classify EACH challenge
according to business environment and state the extent of control DM has over EACH
business environment

BUSINESS EXTENT OF CONTROL

CHALLENGES
ENVIRONMENTS
1 Their suppliers of mining Market environment Partial/Some/Limited/Less
equipment have increased their control
prices by more than 20%.
2 The supervisor does not have a Micro environment Full control
good working relationship with his
employees.
3 DM can no longer export their Macro environment No control
products due to an increase in the
exchange rate.

Example 2: Business in the secondary sector

1 Read the scenario below and answer the questions that follow:

SUPER ENERGY ENTERPRISE (SEE)

Super Energy Enterprise produces maize meal and instant soft porridge. They buy their raw
material from Early Bird Maize Farm which is out of stock sometimes. SEE employees are
regularly absent from work. The local government has instructed the management of SEE
to register their products with the South African Bureau for Standards.

1.1 Name the business sector in which Super Energy Enterprise is operating

SECONDARY SECTOR

Identify THREE challenges for SEE's business and classify EACH challenge according to
the business environment.

CHALLENGE BUSINESS ENVIRONMENT

(a) SEE employees are regularly absent from Micro environment
work
(b) They buy their raw material from Early Market environment
Bird Maize Farm which is out of stock
sometimes.
(c) The local government has instructed the Macro environment
management of SEE to register their
products with the South African Bureau of
Standards.

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Example 3: Business in the tertiary sector

Read the scenario below and answer the questions that follow:
TIMOTHY LEGAL SERVICES (TLS)

Timothy Legal Services (TLS) is situated at the Pretoria CBD. TLS’s assistant lawyers
are not trained to handle criminal cases. Another law firm, Mbuzi Inc. has set up a law
practice in the same office block as TLS. TLS can no longer pay their bank loan due to an
increase in interest rates.

1.1 Name the business sector in which TLS is operating. Motivate your answer by
quoting from the scenario above.

Business sector: Tertiary sector

Motivation: Timothy Legal Services (TLS) is situated at the Pretoria CBD

1.2 Identify THREE challenges for TLS business and classify EACH challenge
according to the business environment. State the extent of control TLS has over
EACH business environment

CHALLENGE BUSINESS EXTENT OF CONTROL

ENVIRONMENT
TLS’s assistant lawyers are not Micro environment Full control
trained to handle criminal cases.
Another law firm, Mbuzi Inc. has Market environment Partial/Some/Limited/Less
set up a law practice in the same control
office block as TLS.
TLS can no longer service their Macro environment No control
bank loan due to an increase in
interest rates.

NOTE: You may sometimes asked to name three business environments and explain
the extent of control businesses have over EACH business environment e.g.

BUSINESS ENVIRONMENTS EXTENT OF CONTROL

Micro environment Full control
Market environment Partial/Some/Limited/Less control
Macro environment No control