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8167.0 - Selected Characteristics of Australian Business, 2007-08 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 17/09/2009   
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BUSINESS MARKETS AND COMPETITION



Geographic markets in which businesses sold goods or services

Businesses were asked to identify all geographic markets (from four options) in which they sold goods or services during the year ended 30 June 2008.

Geographic markets in which businesses sold goods or services(a)(b), by employment size, 2007 - 08

0-4 persons
5-19 persons
20-199 persons
200 or more persons
Total
%
%
%
%
%

Local area(c)
83.8
85.5
83.4
78.8
84.2
Outside of local area but within the state/territory
35.4
45.5
55.5
73.3
40.1
Outside of state/territory but within Australia
21.4
26.1
39.3
69.6
24.4
Overseas
5.9
10.4
17.8
37.9
8.3

(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. Businesses could report more than one geographic market.
(c) Local area includes the immediate area, town or city in which the business is located.


Over four in five businesses (84%) operated in their local area (i.e. the immediate area, town or city in which the business is located). In contrast, 8% of businesses sold their goods or services to overseas markets, ranging from 6% for businesses with 0-4 persons employed to 38% for businesses with 200 or more persons employed.

By industry, Health care and social assistance had the highest proportion of businesses that sold goods or services within the local area (96%). Mining had the lowest proportion of businesses who sold their goods or services to local markets, although they reported the highest proportion of businesses to have sold goods or services to overseas markets.


Main source of business income

Businesses were asked to identify their main source of income from the sales of goods or services during the year ended 30 June 2008. 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 source of business income(a)(b)(c), by employment size, 2007 - 08

0-4 persons
5-19 persons
20-199 persons
200 or more persons
Total
%
%
%
%
%

Australian sources
Government organisations
4.1
5.0
9.1
14.0
4.8
Large businesses or organisations
11.3
11.7
23.5
46.0
12.6
Small and/or medium businesses or organisations
39.7
35.7
32.8
20.6
37.9
General public
51.8
56.2
41.0
27.0
52.0
Overseas sources
2.0
2.4
2.6
7.6
2.2

(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 over half of all businesses (52%) reported the Australian general public as their main source of income, with small and/or medium businesses or organisations within Australia as the second highest source of income (38%). By employment size range, businesses in the 200 or more persons group were most likely to report their main source of income as being from large businesses or organisations within Australia (46%) and overseas sources (8%).

Businesses in Accommodation and food services were most likely to report the Australian general public as their main source of income (90%). Overall, 2% of businesses reported overseas sources as their main source of income. This was most prevalent for businesses in Mining (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 2008. 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, 2007 - 08

0-4 persons
5-19 persons
20-199 persons
200 or more persons
Total
%
%
%
%
%

Australian suppliers
Government organisations
1.6
1.5
1.8
1.5
1.6
Large businesses or organisations
15.0
21.3
27.3
41.8
17.9
Small and/or medium businesses or organisations
60.5
62.2
55.3
37.2
60.4
Overseas suppliers
4.0
6.3
9.9
15.1
5.2
Not applicable
21.2
12.4
10.4
11.8
17.8

(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 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.


Over half of businesses (60%) reported Australian small and/or medium businesses or organisations as their main supplier of goods or services, with Australian government organisations being the least reported main supplier of goods or services (2%). The proportion of businesses reporting overseas suppliers of goods or services increased with each successive employment size range.

At the industry level, Wholesale trade (32%) recorded the highest proportion of businesses with overseas suppliers, with all remaining industries recording proportions of 9% 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. Definitions of what constitutes a small number of clients, customers or buyers and what is significant were not specified. Businesses that did have reliance on a small number of clients, customers or buyers were then asked to indicate the potential impact of losing one of these.

Reliance on clients, customers or buyers, by employment size, 2007 - 08

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)
54.5
37.4
37.7
28.1
48.2
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
39.6
40.5
31.3
24.2
39.2
Moderate to large impact on the business's income as it would have been difficult to find replacement client, customer or buyer
45.0
47.1
54.4
55.3
46.1
Extremely large impact which would have forced the business to close
15.6
12.4
14.2
20.5
14.8

(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.


Just under half of all businesses (48%) 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 across all employment size ranges.

Of the businesses that reported relying on a small number of clients, customers or buyers, 46% indicated there would be a moderate to large impact on business income if one of these clients was lost. An extremely large impact was reported by 15% of these businesses.

At the industry level, businesses within Construction and Administrative and support services were most likely to rely on a small number of clients, customers or buyers to generate a significant proportion of their income. Of these, 40% in Construction; and 35% in Administrative and support services reported that they would have experienced little or no impact on income if they lost one of those clients. Businesses within Transport, postal and warehousing were the most likely to experience extremely large impact on their income in the event of losing one of these clients.

The prospect of losing one of these clients would be more likely to have a moderate to large impact on innovation active businesses (54%) than non-innovation active businesses (40%).


Degree of competition

All businesses were asked to describe the degree of competition they experienced during the year ended 30 June 2008. 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. Detailed definitions for these options were not provided. Guidance as to how businesses could make this assessment was not specified.

Degree of competition experienced by businesses(a)(b)(c), by employment size, 2007 - 08

0-4 persons
5-19 persons
20-199 persons
200 or more persons
Total
%
%
%
%
%

Degree of competition:
minimal
18.3
12.8
13.7
8.3
16.3
moderate
36.4
39.4
34.9
39.9
37.1
strong/tough
29.8
38.6
41.5
43.4
33.3
Captive market/no effective competition
15.7
9.5
9.8
8.4
13.4

(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.


Over two thirds of businesses reported a moderate degree of competition or strong/tough competition in their business market. Captive market/no effective competition was reported by 13% of businesses and was most prevalent in businesses with 0-4 persons employed, at 16%, around twice the proportion of large businesses.

Businesses in Wholesale trade were most likely to report strong/tough competition (49%), compared to 12% of businesses in Health care and social assistance. Businesses in Mining were most likely to report captive market/no effective competition (25%), followed by those in Transport, postal and warehousing (22%); and Health care and social assistance (22%).


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 2008. They were required 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. Guidance for determining size of competitors was not provided.

Size of competitors(a)(b)(c), by employment size, 2007 - 08

0-4 persons
5-19 persons
20-199 persons
200 or more persons
Total
%
%
%
%
%

Competitors which were:
smaller in size
7.8
10.0
12.7
21.6
8.9
same size
49.8
56.0
52.0
54.0
51.8
larger in size
45.0
37.1
38.3
26.4
42.1

(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, 52% reported their competitors as being about the same size as this business. Under 10% of businesses with some degree of competition indicated that their competitors were smaller than this business, with the proportion increasing in each successive employment size range.

At the industry level, Accommodation and food services had the highest proportion of businesses reporting competition about the same size as this business at 67%. This industry reported the lowest proportion of competitors larger than this business (27%).


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