BUSINESS MARKETS AND COMPETITION


Geographic markets in which businesses sold goods or services

Businesses were asked to identify all geographic markets in which they sold goods or services during the year ended 30 June 2009. Response options included the local area; outside of local area but within the state/territory; outside of state/territory but within Australia; and overseas.

Geographic markets in which businesses sold goods or services(a)(b)(c), by employment size, 2008 - 09
	0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
	%	%	%	%	%
Local area(d)	80.4	84.8	81.9	78.4	81.9
Outside of local area but within the state/territory	36.3	43.5	48.4	68.8	39.7
Outside of state/territory but within Australia	20.3	25.0	34.7	66.2	23.2
Overseas	5.4	7.9	15.0	35.0	7.1
(a) Proportions are of all businesses in each employment size category.
(b) Businesses were asked to identify all geographic markets in which they sold goods or services.
(c) Businesses could report more than one geographic market.
(d) Local area includes the immediate area, town or city in which the business is located.

Over four in five businesses (82%) reported operating in their local area. By contrast, 7% of businesses sold their goods or services to overseas markets, ranging from 5% of businesses that employed 0-4 persons, to 35% for businesses with 200 or more persons employed.

At industry level, the proportion of businesses reporting that they sold goods or services within the local area was highest in the Health care and social assistance industry, at 96%. The Information media and telecommunications industry had the highest proportion of businesses that sold goods or services overseas (24%) and outside of state/territory but within Australia (52%).


Main source of business income

Businesses were asked to identify their main source of income from the sale of goods or services during the year ended 30 June 2009. Definitions for 'large businesses or organisations' and 'small and/or medium businesses or organisations' were not provided.

Main source of business income(a)(b)(c), by employment size, 2008 - 09
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Australian sources
	Government organisations	5.1	5.8	9.1	17.4	5.7
	Large businesses or organisations	12.5	12.4	24.6	41.8	13.6
	Small and/or medium businesses or organisations	39.3	36.4	28.8	21.8	37.4
	General public	47.5	52.8	46.2	24.7	48.9
Overseas sources		1.9	1.5	2.5	6.6	1.9
(a) Proportions are of all businesses in each employment size category.
(b) Businesses were asked to identify their main source of income from the sales of goods or services and were asked to nominate one source only.
(c) The sum of the component items within employment size categories may not equal 100% due to rounding and/or provision of multiple responses, refer to Explanatory Note 17.

Just under half of all businesses (49%) reported the Australian general public as their main source of income, followed by small and/or medium businesses or organisations within Australia (37%).

By employment size range, businesses with 200 or more persons employed were most likely to report their main source of income as being from large businesses or organisations within Australia (42%) and also recorded the highest proportion of the employment size ranges for main source of income received from overseas (7%).

At industry level, Accommodation and food services had the highest proportion of businesses reporting the Australian general public as their main source of income (89%). Businesses within Mining were the most likely to have overseas sources as their main source of income, at 13%.


Main supplier of goods or services

Businesses were asked to identify their main supplier of goods or services for the year ended 30 June 2009. A list of sources was supplied, however, definitions for large businesses or organisations and small and/or medium businesses or organisations were not provided.

Main supplier of goods or services(a)(b)(c), by employment size, 2008-09
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Australian suppliers
	Government organisations	1.7	2.0	1.3	2.1	1.8
	Large businesses or organisations	15.7	20.1	26.6	40.4	18.1
	Small and/or medium businesses or organisations	57.3	63.4	58.4	37.8	59.1
Overseas suppliers		4.7	6.4	7.4	14.0	5.5
Not applicable		22.7	12.0	12.0	12.7	18.5
(a) Proportions are of all businesses in each employment size category.
(b) Businesses were asked to identify their main supplier of goods or services and were asked to nominate one supplier only.
(c) The sum of the component items within employment size categories may not equal 100% due to rounding and/or provision of multiple responses, refer to Explanatory Note 17.

More than half of all businesses (59%) reported Australian small and/or medium businesses or organisations as the main supplier of goods or services, with Australian government organisations being the least reported (2%). The proportion of businesses reporting overseas suppliers of goods or services increased with each successive employment size range.

At industry level, Wholesale trade (36%) recorded the highest proportion of businesses with overseas suppliers, with all remaining industries recording proportions of 10% or less.


Reliance on clients, customers and buyers

Businesses were asked whether they relied on a small number of clients, customers or buyers to generate a significant proportion of their income. The question was not accompanied by a definition of what constitutes a small number of clients, customers or buyers or what constitutes significant proportion of their income. Businesses that did rely on a small number of clients, customers or buyers were also asked to indicate the potential impact to their business if they lost one of these.

Reliance on clients, customers or buyers, by employment size, 2008 - 09
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Businesses that relied on a small number of clients, customers or buyers (a)		54.7	42.4	37.9	32.4	49.5
Potential impact on business income from the loss of one of these clients, customers or buyers (b)(c)
	Little or no impact on the business's income as it would have been relatively easy to find replacement client, customer or buyer	38.6	34.6	26.0	22.3	36.7
	Moderate to large impact on the business's income as it would have been difficult to find replacement client, customer or buyer	46.7	48.3	61.2	66.5	48.1
	Extremely large impact which would have forced this business to close	15.5	17.5	13.0	11.5	15.8

(a) Proportions are of all businesses in each employment size category.
(b) Proportions are of businesses that relied on a small number of clients, customers or buyers to generate a significant proportion of their income, in each employment size category.
(c) The sum of the component items within employment size categories may not equal 100.0% due to rounding and/or provision of multiple responses, refer to Explanatory Note 17.

Half of all businesses reported a reliance on a small number of clients, customers or buyers to generate a significant proportion of their income, with businesses employing 0-4 persons reporting the highest proportion (55%).

Of the businesses that reported relying on a small number of clients, customers or buyers, 48% indicated there would be a moderate to large impact on business income if one of these clients was lost.

At industry level, two-thirds of businesses within Information media and telecommunications and Professional, scientific and technical services reported a reliance on a small number of clients, customers or buyers to generate a significant proportion of their income. Businesses in Transport, postal and warehousing reported being most likely to experience an extremely large impact on business income in the event of losing one of these clients, at 36%. By contrast, 72% of businesses in Health care and social assistance reported little or no impact as the expected outcome of losing one of these clients.


Degree of competition

All businesses were asked to describe the degree of competition they experienced during the year ended 30 June 2009. They were required to select one of four available options; captive market/no effective competition; minimal degree of competition; moderate degree of competition; or strong/tough competition. The question was not accompanied by a definition list of what constitutes each degree of competition.

Degree of competition experienced by businesses (a)(b)(c), 2007 - 08 and 2008 - 09
		2007-08	2008-09
		%	%
Degree of competition:
	minimal	16.3	17.2
	moderate	37.1	33.2
	strong/tough	33.3	36.5
Captive market/no effective competition		13.4	13.2
(a) Proportions are of all businesses in each output category.
(b) Businesses were asked to identify which one of four options best described the degree of competition experienced by the business during the year.
(c) The sum of the component items within each output category may not equal 100% due to rounding and/or provision of multiple responses, refer to Explanatory Note 17.

Over a third of businesses reported strong/tough competition (36%) for the year ended 2008-09, a 3 percentage point increase from 2007-08. Conversely, there was a four percentage point decrease in the proportion of businesses reporting a moderate degree of competition, from 37% in 2007-08 to 33% in 2008-09.

Degree of competition experienced by businesses(a)(b)(c), by employment size, 2008 - 09
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Degree of competition:
	minimal	18.9	15.6	11.4	7.7	17.2
	moderate	32.5	35.1	31.6	35.7	33.2
	strong/tough	33.1	39.3	50.1	48.0	36.5
Captive market/no effective competition		15.6	10.2	6.9	8.6	13.2
(a) Proportions are of all businesses in each employment size category.
(b) Businesses were asked to identify which one of four options best described the degree of competition experienced by the business during the year.
(c) The sum of the component items within employment size categories may not equal 100% due to rounding and/or provision of multiple responses, refer to Explanatory Note 17.

Captive market/no effective competition was reported by 13% of businesses and was most prevalent among businesses with 0-4 persons employed, at 16%, over twice the proportion of businesses with 20-199 persons employed (7%).

Businesses in Retail trade (50%) and Wholesale trade (49%) were most likely to report strong/tough competition, compared to 17% of businesses in Health care and social assistance. The Health care and social assistance industry recorded the highest proportion of businesses with a captive market/no effective competition (30%), followed by Mining, at 25%.


Size of competitors

Businesses with some form of competition were asked to identify the size of their major competitors during the year ended 30 June 2009. They were asked to select one of three options; smaller in size than this business, about the same size as this business, and larger in size than this business. A definition of what constitutes the size of competitors was not provided.

Size of competitors(a)(b)(c), by employment size, 2008 - 09
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Competitors which were:
	smaller in size	6.8	8.1	14.8	19.3	8.0
	same size	50.5	53.3	49.9	52.6	51.4
	larger in size	44.3	39.9	36.9	29.7	42.2
(a) Proportions are of businesses with some degree of competition in each employment size category.
(b) Businesses were asked to identify their main source of competition and were asked to nominate one source only.
(c) The sum of the component items within employment size categories may not equal 100% due to rounding and/or provision of multiple responses, refer to Explanatory Note 17.

Of those businesses with some degree of competition, over half (51%) reported their competitors as being about the same size as the business. Less than one in ten businesses with some degree of competition indicated that their competitors were smaller in size than the business, at 8%.

At industry level, Accommodation and food services had the highest proportion of businesses reporting competitors about the same size as the business, at 72%. This industry reported the lowest proportion of competitors larger than the business (25%).