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Australian consulting market is the second largest market in the world by its contribution to GDP (Polites 2014). Accountable for 0.27 percent of the national economy, it leaves far behind the markets of the US, Germany, and France, giving way only to that of the UK (Creighton 2014). The total amount of Australian consulting market is estimated at USD 4.2 billion in 2014, which makes it the fifth largest market in the world (Polites 2014). According to IBISWorld research group (2014), there were over 10,000 companies in this market in 2013, while the share of the largest one did not exceed 6 percent. Operating in such a large and well-developed home market is a source of great opportunities to Australian business consultants, but it also means that they have to work in a highly competitive environment. An efficient means to address this challenge is the adoption of a “blue ocean strategy.”

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As a B2B market, Australian consulting industry depends on the general economic situation, but its fluctuations over recent years were surprisingly small. The market’s contraction in 2009, at the peak of the world’s economy downfall, was only 0.2 percent (Professional services Australia 2014). In the last three years, consulting industry in Australia experienced steady growth; in fact, the growth rate was 4 percent in 2011, 2 percent in 2012, and 2 percent in 2013 (Consultancy.uk 2014). The slight decrease in the growth rate is attributed by Source Information Services (2014) to political uncertainty and ongoing concerns about the future of Australian and international economy. As consumers of consulting services are businesses, their demand is shaped by their earnings in the current period and their expectations of either recession or growth in their own markets. A deeper understanding of the nature of demand in this industry can be achieved by customer segmentation.

The suitable variables in the segmentation of Australian consulting market are geographic and industrial ones. Both these kinds of segmentation contribute to the identification of comparatively low-competitive market niches where Australian consultants can implement a “blue ocean strategy.”

The geographic segmentation of customers reveals a strikingly low proportion of foreign consumption. According to the Department of Foreign Affairs and Trade (2014), the export of business and management consulting services from Australia in 2013 was only AUD 161 million, which is about 3.5 percent of total Australian market. The increase in the export of these services against 2012 was 11 percent, and the five-year trend was a decrease by 1.4 percent (DFAT 2014). Such insignificant amounts of export underline the pivotal role of domestic market for Australian consulting businesses. However, a rapid growth of exports over the last year may indicate the emergence of “blue ocean” markets for Australian consultants outside Australia.

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The industrial structure of customers is more diverse, but its analysis also reveals the dominance of certain groups. The marketing research by Source Information Services (2014) demonstrates that over a half of consulting services in Australia in 2013 were purchased by companies working in one of the three following industries: energy and resources, financial services, and non-financial services (including transport, construction, and professional services). The largest consumers were energy and resource businesses with their total spending of USD 947 million, or 22.5 percent of the whole market. Financial companies formed 18.8 percent of the market by paying USD 790 million. The firms providing transport, construction, and professional services accounted for 16.4 percent of the market, purchasing consulting services for USD 687 million. Therefore, the highest proportion of demand for management consulting in Australia is generated by energy, resource, financial, and non-financial service sectors.

The consumer segmentation data is important to identify not only the largest segments but also those most fast-growing. The largest increase in demand for consulting services in 2013 against 2012 was noted in non-financial service companies (3.9 percent), health care (3.1 percent), and retail (3 percent) (Polites 2014). Meanwhile, the rates of consumption growth in the energy and resources sector and financial services were more modest, namely 1.2 percent and 2.1 percent respectively (Polites 2014). Apparently, this data points at non-financial service companies as a potential “blue ocean” for consulting businesses. Currently, this market segment is growing almost twice as fast as the consulting market in general, having become the third largest one. Besides, the health care and retail sectors, with their small market shares but high growth rates, can also become “blue oceans.”

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The next step of demand research is the investigation of purchasing behaviour. The decision-making unit in consulting industry is a company, and the general pattern is typical for B2B markets, namely the decision is made by top management on rational basis. Drucker (cited in Appelbaum & Steed 2005) identifies two main deliverables that businesses expect from consultants; the first is the access to a broader cross-company and cross-industrial experience than most executives have, and the second is an objective insight into a company’s problems. Orr and Orr (2013) add that the main factor contributing to the demand for consulting services is the managers’ need to retain control over their businesses when there is a risk of losing it. The need to retain control, in turn, arises from a number of reasons, including perceived pressures from constituents, perceived complexity and dynamics of the inner and outer environment, and management fashions (Orr & Orr 2013). The rational nature of demand and high potential cost of a buying decision imply that the buying process is based on a thorough consideration of all possible alternatives.

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