Classification of Business Activities
The business activities are classified as Industry and Commerce.
Industry
Industry is concerned with the processing and production of goods and services with the motive of earning profit. Simply put, it involves changing the raw materials into finished products for the purpose of selling them to the customers. The goods sold by industry can be either used by other companies for further production or can be used by the end consumers for final consumption. The goods produced in the former case are known as producer goods. For example, machinery, etc. However, the goods produced in the latter case are known as consumer goods. For example, bread, milk, butter, cloth, groceries, medicines, etc. An organization can also produce materials that can be used by other companies to further process and convert into finished goods. These goods are known as intermediate goods. For example, rubber, copper, plastic, etc. Industry can be further classified into three parts: primary, secondary, and tertiary industry.
Commerce
Commerce is concerned with the activities involving taking goods and services from the manufacturers and delivering them to the users. The basic motive of commerce is ensuring the proper flow of goods and services in the market for the ease of manufacturers and consumers. With the help of commerce, an individual can purchase the goods produced in any part of the world. Commerce not only includes the buying and selling of goods but also consists of all the activities or services like transportation, banking, insurance, communication, packaging, advertisement, warehousing, etc., required to facilitate the process of trade, i.e., buying and selling of goods. Hence, commerce provides the required link between the manufacturers and consumers. Commerce can be further classified into two parts: trade and auxiliaries to trade.