1.Overview of Business (4 marks)

• Specific Objectives-State various business types and sectors-Describe importance of globalisation Contents1.1 Types of Business 1.2 Industrial sectors 1.3 Globalization

Business

• Broad term • Human activity directed towards producing or

acquiring wealth through buying and selling of goods.

-Henry Lewis• It includes production of goods, selling into

the markets, provide necessary services and make profit.

Basic Industry Types

Types of Business

• Service• Manufacturing• Trade

Service

• The service industries ('tertiary sector of industry' by economists)

• involve the provision of services to businesses as well as final consumers.

• An industry made up of companies that primarily earn revenue through providing intangible products and services.

Important features

• 60% GDP in Indian economy(Gross Domestic Product)

• Fastest growing industry with 9% annual growth rate

Transportation

• Transport or transportation is the movement of people, animals and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline

Transportation Modes

Public Transport(Road) Goods Transport(Sea)

Manufacturing Industry

• Manufacturing industry involves Raw material is converted into finished or semi finished products with help of machines, technology, various Processes etc. e.g.Automobile, Leather, Electronics, fertilizersSony, Lenovo, Toyota, Samsung, Bridgestone, TATA

• 1965-1990:Liacence Permit Raj• 15% share in GDP• 50% share in Exports

Trade

• The action of buying and selling goods and services.

Trade, or commerce, involves the transfer of the ownership of goods or services, from one person or entity to another, in exchange for money, goods or services. A network that allows trade is called a market.

Barter-willing exchange of goods

Trade types

Entreport

• A port where merchandise can be imported and then exported without paying import duties.

SEZ-Special Economic Zone

• A special economic zone (SEZ) is an area in which business and trade laws differ from the rest of the country.

• Aims :increased trade, increased investment, job creation and effective administration.

• To encourage businesses to set up in the zone, financial policies are introduced.

• These policies typically regard investing, taxation, trading, customs and labour regulations.

• The creation of special economic zones by the host country may be motivated by the desire to attract foreign direct investment (FDI)

SEZ

• Special Economic Zones (SEZs) Policy was announced in April 2000

• The benefits a company gains by being in a special economic zone may mean it can produce and trade goods at a lower price, aimed at being globally competitive.

S. No. SEZ Name Location Type State Notification Date

1

Magarpatta Township

Development And

Construction Company Ltd.

Magarpatta City Village Hadapsar

Taaluka Haveli District Pune

Computer / Electronic Software

Maharashtra 20-07-2007

2

Maharashtra Airport

Development Company Ltd. (

Mihan SEZ )

Mihan, District Nagpur Multi Product Maharashtra 29-05-2007

Industrial Sectors

• Depending upon the type of production Indian industry is classified into:

Engineering Chemical

Iron And Steel Agro

Automobile Paper

Textile Cement

Process

Engineering

• Design, manufacture and operation of machine, structures, devices

• Mechanical , Civil, Electronics • Modern Technology

Iron And Steel

• India's iron and steel industry is one of the most important industries in India.

• During 2014 through 2015, India was the third largest producer of raw steel

• The Ministry of Steel in India is concerned with the Coordination and planning of the growth and development of Iron and Steel Industry in the country, both in the Public and Private Sectors

• Steel Authority of India (SAIL) is the apex authority of Govt. of India

• Major plants:-SAIL-TISCO-JINDAL STEEL- Indian seamless

Automobile

• annual production of 23.37 million vehicles in FY 2014-15

• The automobile industry accounts for 7.1 per cent of the country's gross domestic product (GDP).

-Two wheelers-81%-Passenger Vehicle (PV) segment has 13%

Plant Location Manufacturer

Gurgaon Maruti Suzuki

Pune  Fiat

Pune  Bajaj Auto

Pune  Force Motors

Noida Honda

Nashik Mahindra

Ennore, Chennai Ashok Leyland

Process

• Process manufacturing is the branch of manufacturing that is associated with formulas and manufacturing recipes

• Once the final output is produced, It cannot be distilled back.

• There is no concept of a unit of sauce while it is being processed.

E.g.Food, beverages, chemicals, pharmaceuticals, petroleum, ceramics, base metals, coal, plastics, rubber, textiles, tobacco Major companies:-Asian Paints -Britannia-Hindustan lever

Textile industry

• Oldest industry in India• 60% -Cotton based• In last 25 years -73% to 27% decline in cotton

cloth• Polyester, synthetic textiles, blended fabrics

ITES• ITeS is Information Technology enabled

Services • ITES is form of Outsource services which

has involvement of IT in different fields like Finance & banking, Insurance, telecommunication

IT industryIT is Information Technology

Banking, Insurance sector

• India’s banking sector is sufficiently capitalized and well-regulated-RBI

• financial and economic conditions in the country are far superior to any other country in the world.

• 26 public, 25 private, 43 foreign, 56 regional rural, 1,589 urban cooperative and 93,550 rural cooperative banks

• The insurance industry of India consists of 53 insurance companies of which 24 are in life insurance business and 29 are non-life insurers.

• Life Insurance Corporation (LIC) is the sole public sector company.

Globalization

• the process by which businesses or other organizations develop international influence or start operating on an international scale

• Until the liberalization of 1991, India was largely and intentionally isolated from the world markets, to protect its underdeveloped economy.

• Foreign trade was subject to import tariffs, export taxes etc.

• In 1991 India accepted LPG• LPG Stands forLiberalization, Privatization, GlobalizationIt began since July 24, 1991.

• Liberalization refers to the slackening of government regulations.

• Privatization refers to the participation of private entities in businesses and services and transfer of ownership from the public sector (or government) to the private sector as well.

GATT

• General Agreement on Tariffs and Trade • GATT was signed by 23 nations in Geneva on

October 30, 1947 and took effect on January 1, 1948

• GATT is replaced byWorld Trade Organization (WTO) on January 1, 1995

Advantages w.r.t. India

• Market size increased• Increase in employment• Enhancement of living standards and

increased purchasing power• Empowerment of Indian youth• Competition creates quality awareness• Indian culture got appreciated in world

Disadvantages w.r.t. India

• the environment in great trouble• local market, domestic market collapsed• Overutilization of resources• Monopoly in business• Cultural transfusion disturbing present

systems of traditionsWestern styles, Relationships, Parties