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Business activity

Business activity
Photo by Annie Spratt on Unsplash

Business activities are those which are concerned with seeking to meet the needs of customers by providing a product or service that they require.

There are various stages in the production of finished goods, so business activity typically involves adding value to resources such as raw materials, to make them more desirable to the end user. Of course, one of the biggest values added is branding.

For example, a well known brand like Coca-Cola or McDonald’s adds a lot of value to the products sold by these companies because the brand is instantly recognisable.

A company like Shell, which is involved in oil and gas exploration, will extract raw materials from deposits of oil and natural gas, which may have been under the ground for millions of years.

These deposits are then brought from under the ground by drilling operations. The oil and gas is then refined to make petrol and a range of other products.

Shell adds its own special ingredients to create petroleum products, which are specially tailored to meet the needs of modern engines so that they achieve the highest levels of performance whilst, at the same time, minimising their impact on the environment.

Value added

A company like Argos adds value to the products that it retails by providing them in a convenient way for customers. Customers are able to browse catalogues at home (either online or in paper-based form) and then order the goods they want from their nearest Argos store. Argos, therefore, provides an excellent retail service for customers, enabling them to benefit from a range of value added provided by the store.

The term value added relates to the thousand and one ways in which modern businesses make the goods and services they provide customer friendly. These organisations research customer requirements in order to create the product and service benefits that their customers are looking for.

Business activity takes place at three stages of production:

Primary activity involves extracting the gifts of nature (e.g. drilling oil from the ground);

Secondary activity involves manufacturing finished goods (e.g. refining oil and gas);

Tertiary activity involves providing services such as making finished goods and services available to the end customer.

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