Industry Groups

A national economy can be described in terms of its main sectors and industries.

Another way to classify an economy is:

• Primary industries, which include agriculture, forestry and mining.
• Secondary industries, which include construction and manufacturing. Manufacturing itself is often divided into capital goods (eg equipment and machinery used to produce other goods), durable goods (eg cars, washing machines) and non-durable goods (eg food, clothing).
• Service industries, which include banking, entertainment, tourism.

An economy can also be divided into:

• The private sector, which includes large corporations, SMEs (= small and medium-sized enterprises) and individuals working on a self-employed basis.
• The public sector, where there are schools and hospitals as well as SOEs (= state-owned enterprises) such as railways and the post office.

Within each industry there can be a variety of types of business organization, each with their own legal structure. A business can be:

A sole trader (US: sole proprietorship). Here the business is owned by one person, who is 'self-employed'. That individual has unlimited liability - they are personally responsible for any debts. A self-employed professional will refer to themselves as a 'freelancer'.

A partnership. Here two or more people run the business together. Lawyers, architects and auditing firms are typical partnerships.

A limited liability company. Here there is a legal distinction between the company and the owners, so the company is responsible for any debts, not the owners. The owners therefore have 'limited liability'. This type of company is often quite small, and includes many family-run businesses. The company is referred to as a 'private' company because shares cannot be sold to members of the public. In official documents, the company name is followed by Ltd (UK) meaning 'limited', or Llc (US) meaning 'limited liability company'.

A public limited company (US: a corporation). Here the company is owned by shareholders (US: stockholders), who might be:

-large financial institutions (e.g. pension funds or investment banks).

-other companies.

-members of the public (and for this reason the company is called a 'public' company).

The shareholders receive a share of the profits every year (paid as dividends), and will also get a capital gain or loss when they sell their shares (because the price can go up or down on the stock market). These are large companies, and are run by managers under the supervision of a Board. In official documents, the company name is followed by PLC (UK) or Inc or Corp (US).

A franchise. This type of company includes McDonald's and the Body Shop. Here the business owner allows other people (franchisees) to set up in business using the company's brand name, products and reputation. The franchisee has varying degrees of control over how products are marketed and sold.

There are various ways that a company can grow:

Internal growth: stay private. The company increases its sales, number of employees, etc, but stays as a private company, perhaps run by the original founders of the business (often family members).

Internal growth: IPO. The company moves from being a small, family-owned firm to being a large corporation with a stock-market listing. The process of issuing shares for the first time is called an IPO (initial public offering).

Internal growth: 'trade sale' to a much larger company in the same sector. In this case the original small company is absorbed and its name often disappears. Many start-ups in the IT and biotechnology areas sell themselves in this way. (Microsoft, Intel and Google all grew by buying start-ups.)

Merger. Two established companies join to form one (e.g. Mercedes and Chrysler).

Acquisition (= takeover). One established company buys another. The first step in an acquisition is often to take a controlling stake in the other company - buying a large number of shares but without complete ownership. The acquired company often keeps its original trading name, becoming a subsidiary of the larger 'parent company'.

Дата добавления: 2015-08-03