2. Private Sector
What is the Private Sector?
The private sector is run by individuals and companies, rather than the public sector which is run by the
government and they have control over these organisations. So fundamentally the private sector which makes
up a huge part of the economy for many MEDC countries is not under direct state control but play a huge part
in the running of a countries economy and in countries such as the United States, Canada, Australia, Japan and
the United Kingdom the total percentage that the private sector contributes for the total GDP is over 80%.
However in the private sector, the main intention is to generate revenue and therefore produce a profit.
Companies within the private sector usually provide goods or services for those willing to pay for them in order
for them to generate their revenue to cover their overheads and make a profit to then either reinvest into the
business or for the shareholders / owners to retain after investing there own capital into the business.
Examples of the Private Sector
- Sole Traders
- Partnerships
- Small Sized Businesses
- Medium Sized Businesses
- Large Businesses / Multinational Corporations (Multinational means that corporations operate in more
than country, some examples of this is businesses like Apple, Samsung and Apple).
- Professional / Trade Associations
- Trade Unions
3. Private Sector – Example 1:
Hairdressers / Sole Trader
• Example 1: Hairdressers / Sole Trader
• What they do? This type of business offers a service of cutting and styling
customers hair, whether it be male or female. Also this business can
sometimes offer goods in terms of hair care, for example shampoo,
conditioner, styling gel, hairspray, or electronic devices like hair straightens
or hair dryers.
• How they generate revenue? This business generate their revenue
through transactions through their customers by offering them both goods
and services. This type of business is classed as a small business therefore
the amount of revenue is significantly lower to that of a PLC, or LLC. Also
this type of business often relies on location for its revenue, and the
location limits their customers due to transportation.
4. Private Sector – Example 2: Ben &
Jerry’s / Partnership
• Example 2: Ben & Jerry's / Partnership
• What they do? Ben & Jerry’s are known manufacturing their own ice cream, frozen
yogurt and sorbet and trading with retailers worldwide. The company initially
started as a partnership between Ben Cohen and Jerry Greenfield. However the
company was later bought out by Unilever, a multinational consumer goods
company in 2000.
• How they generate revenue? Ben & Jerry’s generate their revenue by selling goods
to the public. They do this by selling through major retailers such as Tesco,
Sainsbury's and ASDA in which they generate higher revenue margins and they are
able to target different audiences this way. Also this company are able to sell
through their own ice cream stores which are located in over 30 countries
worldwide which enable them to engage closely with their customers.
5. Private Sector – Example 3: Disney /
LLC
• Example 3: Disney / LLC
• What they do? Disney operates in four major areas of business, this includes film, music, theatrical and
parks and resorts. They have acquired many major companies over the years like Pixar, Marvel and
Lucasfilm which alone are huge assets and these again are involved in film, television and are now
integrated within Disney’s parks and resorts which help them engage with a wider audience and produce
better experiences for the customers.
• How they generate revenue? The way Disney generates revenue is different to other businesses as they
provide both goods and services, as Disney is known as a huge multinational conglomerate which owns
theme parks, studios, and merchandise brands this means they have income coming from all different
types of industries and from different target audiences. However due to Disney being a parent company
this means they achieve a significantly higher revenue margin, for example in 2015 their revenue was just
over $50 billion, however due to being such a vast company their have a significant costs which reduces
that revenue to a profit under $10 billion. Also with their profit being substantial Disney often reinvests
this into the company, for example the company purchased the Star Wars franchise in 2012 for over $4
billion and have invested capital in television, film and merchandise for this franchise.
6. Public Sector
What is the Public Sector?
The public sector is run by the government whereas the private sector operates by individuals or companies, so
from the government operating these organisations then their main intention isn't generating profit like those
in the private sector. The public sector is funded differently to that of the private sector as businesses don’t
need to generate revenue to cover their costs because the state sue different methods in order to fund these
organisations, some examples of these methods include using taxes, fees and financial transfers from other
levels of government. However this isn't always the case of funding the public sector as other countries may
take a different approach.
Examples of the Public Sector
- Education Services, for example schools and Libraries
- Electricity
- Emergency Services
- Fire Services
- Police Services
- Waste Management
- Gas and Oil
- Healthcare Services
- Public Transit, for example train lines
These different organisations listed above are again, operated by the government and are in state control
however they are run at different levels of government, and these levels include Federal/National, Regional
and Local.
7. Public Sector – Example 1: NHS
• Example 1: NHS
• What they do? The NHS which stands for the National Health Service provides healthcare for
the citizens of the United Kingdom and this service provides for those who are in need rather
than in the U.S.A and other countries where they base healthcare for those who can afford it.
The NHS offers a wide range of services, these include hospitals, dentists, opticians, mental
health services, NHS walk-in centres, NHS Direct, patient transportation, screenings and
pharmacies.
• How they are funded? The NHS is funded from 98.8% taxation and National Insurance
whereas the other 1.2% is funded by patient charges, which include charges from services
like optical care, prescriptions and dental care. Funding for the NHS comes directly from the
government as it is within the public sector and the decisions for funding is managed by the
Department of Health however parliament delicate the amount of funding given to each
department including the department of health.
8. Public Sector – Example 2: National
Parks
• Example 1: National Parks
• What they do? National Parks have been formed to help conserve and protect the natural
world, this involves preserving the beauty of the UK’s landscapes and ensuring that all wildlife
and their habitats are safe from human interference. Another purpose of why national parks
were formed is to help promote opportunities for the public to understand and enjoy the
many different aspects of national parks in the country.
• How they are funded? National Parks are provided by independent bodies which are funded
directly by the government and this funding is given to ensure that the purpose of national
parks is met.
9. Public Sector – Example 3: Leisure
Centres
• Example 3: Leisure Centres
• What they do? Leisure centres have a purpose to provide a service where communities can
relax and help increase their fitness using the equipment and facilities available to them. The
aim is to encourage people to take part physical exercise and therefore promote healthy
lifestyles .
• How they are funded? Leisure Centres are funded from the government as this is considered
to be part of the public sector, therefore this means that it is under state control. However
whereas the NHS is under control by higher levels of government, Leisure centres are run by
local authorities, and they decide how much funding they receive so this varies from different
local authorities nationwide, meaning the quality of services and standard of facilities will
differ. Leisure centres also receive some funding from the NHS as they contribute to services
such as Children's Weight Management, as this is classed under public health therefore the
NHS is involved due to that aspect. However leisure centres do also generate revenue
independently by offering services such as swimming lessons, access to their facilities like the
gym, basketball courts and swimming pools and also selling products like tennis rackets,
swimming caps , floats etc. that are sold to the general public to help raise money for the
centre.
10. Voluntary Sector
What is the Voluntary Sector?
The voluntary sector is run by organisations whose purpose is to provide benefits for the people, rather than
generating revenue, also this sector doesn’t receive a vast amount of intervention from the government that of
the public sector. So instead the voluntary sector has a goal of enriching society and is seen as generating social
wealth rather than material wealth, that of the private sector. Also within the voluntary sector, the work force
is varied as well, compared to the private and public sector. These workers include those being paid and those
who have volunteered themselves to provide their efforts for the organisations.
The voluntary sector is also known as the civil society as they aim for providing for society and communities
therefore money raised by these organisations is reinvested to further promote growth and to create more
opportunities and benefits for society.
Examples of the Voluntary Sector
- Charities
- Foundations
- Social Welfare Organisations
- Advocacy Groups
- Faith-Based Organisations
- Community Groups
- Recreational Sports
11. Voluntary Sector – Example 1: The Big
Issue
• Example 1: Big Issue
• What they do? The Big Issue is known as a social business and is a financially independent
charity who both provide jobs for professional journalists and allow homeless people the
opportunity to earn a income by selling issues of this magazine. From this it helps the
homeless gain some independence as they are working for their money rather than begging
the public, this also allows them an escape away from poverty and to hopefully start bigger
and better lives.
• How they generate revenue? The Big Issue is funded from charitable trusts, individuals
donating their own money and people participating in fundraising events. The magazine is
also funded by the selling of their magazine issues, so far the organisation sell 100,000 copies
every week and this has allowed the organisation to generate over £5 million for the
homeless but some of the money from purchases does go back to the organisation to help
keep it fully funded so they can continue their work.
12. Voluntary Sector – Example 2: Oxfam
• Example 2: Oxfam
• What they do? Oxfam’s purpose is to stop poverty from happening worldwide, but also to try to tackle
other keys areas which are associated with poverty for example climate change and peoples freedoms.
Oxfam use their funds to create new innovative ways to prevent poverty and to help those in need so they
can eradicate the worlds sufferings and bring together communities.
• How they generate revenue? Oxfam generate their funding through different ways, one method used is
relying on the public to donate different types of items such as clothes, toys or textile products. These are
then sold to customers to raise funds which are then used to help Oxfam with their projects around the
world. Other methods include the public donating money directly to Oxfam which is generated from
advertising such as emotional TV ads, or billboard posters. Oxfam also hold fundraising events every year
in which they market to the general public to engage as many potential members of the public as possible
to achieve bigger and better fundraising donations. Furthermore Oxfam has created partnerships with
other organisations in order to help generate their funding to accomplish their goals to create a better
world, for example ending poverty, climate change, women's empowerment, citizen voices and changing
livelihoods around the world, especially in LEDC’s (Less Economically Developed Countries).
13. Voluntary Sector – Example 3: Princes
Trust
• Example 3: Princes Trust
• What they do? The Prince’s Trust was created to help change young peoples lives around for
those who may be struggling in life and need some direction in order to achieve a better life.
For example last year, the organisation managed to achieve in helping over 56,000 young
people get into jobs, education and training, and from this the organisation has generated
over £1.4 billion back into society over the last 10 years. The organisation helps young people
by giving them the practical and financial support that they require in order to succeed.
• How they generate revenue? The Princes Trust generates its income through several
methods, one is that the organisation receives some capital from the government due to the
organisation performing so well and the fact it contributes money back into the countries
economy. Also voluntary income was the largest source of income which has increased year
after year. However the organisation tries to create public awareness and therefore they hold
fundraising events to get the public involved but also raise additional cash.
14. References / Evidence
Private Sector
• http://study.com/academy/lesson/what-is-the-private-sector-definition-examples.html
• http://whatis.techtarget.com/definition/private-sector
• http://www.privacysense.net/terms/private-sector/
• http://www.privacysense.net/difference-between-private-public-sector/
Private Sector – Example 2
• http://www.benjerry.com/about-us
• https://en.wikipedia.org/wiki/Unilever#2000s
Private Sector – Example 3
• https://thewaltdisneycompany.com/about/
Public Sector
• http://www.privacysense.net/terms/public-sector/
• http://www.privacysense.net/difference-between-private-public-sector/
• http://whatis.techtarget.com/definition/public-sector
Public Sector – Example 1
• http://www.netdoctor.co.uk/health-services/nhs/a4489/what-is-the-nhs/
• http://www.kingsfund.org.uk/projects/nhs-in-a-nutshell/how-nhs-funded
Public Sector – Example 2
• http://www.nationalparks.gov.uk/students/whatisanationalpark/aimsandpurposesofnationalparks
• http://www.nationalparks.gov.uk/about-us
Public Sector – Example 3
• http://www.placesforpeopleleisure.org/funding
• http://www.leisurecentre.com/BenefitsofExercise
• https://en.wikipedia.org/wiki/Leisure_centre
Voluntary Sector
• https://reachskills.org.uk/knowledge-centre/support-volunteers/introduction-voluntary-sector/what-voluntary-sector
• http://www.privacysense.net/terms/Voluntary-sector/
Voluntary Sector – Example 1
• https://en.wikipedia.org/wiki/The_Big_Issue
• http://www.bigissue.com/about-us
Voluntary Sector – Example 2
• https://www.oxfam.org/en/about
• http://policy-practice.oxfam.org.uk/our-approach/strategic-funding-partnerships
• http://www.oxfam.org.uk/what-we-do/about-us/faqs
• http://www.oxfam.org.uk/what-we-do
Voluntary Sector – Example 3
• https://en.wikipedia.org/wiki/The_Prince%27s_Trust
• https://www.princes-trust.org.uk/about-the-trust
• https://www.princes-trust.org.uk/help-for-young-people/frequently-asked-questions
