Key Idea: At HL, Topic 1.1 is not just about defining business basics. Students are expected to apply concepts like needs, wants, sectors, business functions and value added to real business contexts, and explain how these ideas shape decisions, risk and opportunity.
🏭 Business sectors: **Primary —** extraction of raw materials. **Secondary —** manufacturing and construction. **Tertiary —** provision of services. **Quaternary —** knowledge and information industries.
🧠 Why this matters: Different sectors face different costs and risks. Service businesses depend more on people and customer experience. Manufacturing businesses focus more on production efficiency and scale. Economic development often means a shift towards tertiary and quaternary activity.
For HL, definitions still matter. A strong definition of a business includes goods and/or services and satisfying customer needs and wants. If one of those is missing, marks are often limited.
In analytical responses, move beyond stating the sector. Explain what that means for staffing, operations, costs, demand or customer expectations.
Important: Common HL trap: students define terms correctly but fail to connect them. For example, they name the four business functions without showing how poor coordination between them creates business problems.
- Use the exact business term correctly
- Give a precise definition if needed
- Apply it to the business or context
- Explain why it matters
- Where possible, link it to value creation, risk or business decisions