The economy is a structure in which people use limited resources to meet diverse needs. For this purpose, they produce a variety of goods and services, and then share and exchange them among themselves. Speaking about the economy, we usually mean agriculture, industry and trade. In other words, we have the following three basic sectors of the national economy, namely:
The extension of this division is a five-division of the national economy. The continuum starts with the primary sector, which concerns itself with the utilization of raw materials from the earth such as agriculture and mining. From there, the distance from the raw materials of the earth increases.
The primary sector of the economy extracts or harvests products from the earth. The primary sector includes the production of raw material and basic foods. Activities associated with the primary sector include agriculture (both subsistence and commercial), mining, forestry, farming, grazing, hunting and gathering, fishing, and quarrying. The packaging and processing of the raw material associated with this sector is also considered to be part of this sector. In developed and developing countries, a decreasing proportion of workers are involved in the primary sector.
The secondary sector of the economy manufactures finished goods. All of manufacturing, processing, and construction lies within the secondary sector. Activities associated with the secondary sector include metal working and smelting, automobile production, textile production, chemical and engineering industries, aerospace manufacturing, energy utilities, engineering, breweries and bottlers, construction, and shipbuilding.
The tertiary sector of the economy is the service industry. This sector provides services to the general population and to businesses. Activities associated with this sector include retail and wholesale sales, transportation and distribution, entertainment (movies, television, radio, music, theater, etc.), restaurants, clerical services, media, tourism, healthcare, and law. In most developed and developing countries, a growing proportion of workers are devoted to the tertiary sector. In the U.S., more than 80% of the labor force are tertiary workers.
The quaternary sector of the economy consists of intellectual activities. Activities associated with this sector include marketing, advertisement, insurance, banking and real estate services.
Some consider there to be a branch of the quaternary sector called the quinary sector, which includes the highest levels of decision making in a society or economy. This sector would include the top executives or officials in such fields as government, universities, nonprofit, healthcare, culture, libraries, scientific research and information technology.
The sector is therefore part of the industry grouping companies producing goods or services for similar purposes and selling them on the same geographic market. The criterion for separating a particular sector is the use by its participants from the same sources of supply and meeting the needs of the same customers. Determining the boundaries of product and geographic sector allows you to specify the basic parameters: size, dynamics and age, as well as profitability and its participants. An important element of the enterprise environment research (sectoral analysis) with a diversified portfolio of production is to identify the sectors of activity and a separate study of each of them.
An economy can also be divided along different lines, by ownership:
One of the key elements of proper corporate management is the comprehensive knowledge of the economic environment, the sector in which the entrepreneurship is operating. The wide-ranging knowledge about the competitors, potential and threats is essential to build the proper business strategy. The Polish Institute of Credit Management produces customer-focused and general sector analysis helping to tackle that challenge.
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