Business Analysis of Duque Papetiers Gros: Expanding into Germany

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Added on 2024/07/12

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This report analyzes the feasibility of Duque Papetiers Gros, a French stationery manufacturer, expanding into the German market. It examines the German wholesale stationers market, annual spending on writing/drawing materials per capita, Duque's financial performance, international standards, costs of a new building, mean value of orders, and customer satisfaction. The analysis concludes that Germany presents a promising opportunity for Duque, with a strong market demand and potential for growth. However, the report highlights key challenges such as competition, customer loyalty, and compliance with international standards.

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BUSINESS ANALYSING INFORMATION AND DATA
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Table of Contents
1. Introduction.............................................................................................................................. 3
2.Analysis of Issues for Duque Papetiers Gros...............................................................................4
2.1 An Overview of the Wholesale Stationers Market in Germany................................................4
2.2 Annual Spending on Writing/Drawing Materials per Capita....................................................6
2.3Analysis of Duque’s last three financial years of sales data (2015-2017)..................................8
2.4 Feasibility of Expanding to Germany & International Standards...........................................11
2.5Costs of a New Building...........................................................................................................13
2.6Mean Value of Orders.............................................................................................................. 14
2.7 Customer Satisfaction.............................................................................................................. 15
3. Conclusions................................................................................................................................17
4. Reference List............................................................................................................................ 18
5. Appendix....................................................................................................................................19
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1. Introduction
It is immensely important to analyze the prospects of business catering to any industry. When
business prospects are analyzed in an accurate manner, the valuable functioning of the company
can be evaluated. ‘Duque Papetiers Gros’ is an organization which manufactures stationary
goods. The organization wants to expand in other countries and therefore it needs to understand
the situations and the potential risks of the market where it wants to expand. The organization is
headquartered at Northern France. The organization has earned a considerable amount of profits
in the mother country now it wants explore the opportunities which lies in the markets outside
the geographical boundaries of northern France. The company has chances to expand its business
either in Switzerland or Germany. The organization possesses specialization in variety stationery
products. An accurate analysis of the market scenario of the above mentioned countries will
allow the company to know whether it is feasible to expand their business or not.
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2. Analysis of Issues for Duque Papetiers Gros
2.1 An Overview of the Wholesale Stationers Market in Germany
The MCGC report has stated that, in the domestic German markets, the demand for stationery
products is quite high. The organizations that produce stationary items in Germany, import a
high amount of stationary goods which indicates that German stationary products are quite
popular all around the globe. All the stationary products manufactured by German organization
have high quality. In addition to this, the products are innovation and creative in nature to satisfy
the current needs and trends among the consumers. Montblanc, Faber-Castell, and Lamy Stabilo
are some of the big names in the German stationary industry. The yearly turnover of the
stationary market in Germany is €15 billion. All around the world, the demand for German
stationary items is increasing and as a result the turnover for the industry is witnessing greater
heights.
Figure 1: Manufacturing of various stationary items in 2014
(Source: MCGC Perspectives, 2018)
The statistics regarding production of stationery goods in 2014 has been shown in the graph
given above. The cost of production of the selected items comes to approximately €510 million.
In the present scenario, the demand for stationery is quite high which sums up the fact that the
organization needs to incorporate innovative ideas in the products so that the demands of the
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consumers can be met as well as the competition in the market can be curbed (Kim, 2016). An
indistinct idea is provided by the export quotient of the German stationery products.
Figure 2: The rate of export of stationery items in 2014
(Source: MGCC Perspectives, 2018)
The graph provided here shows the rate of export of various kinds of German stationery products
all around of the globe. From the above graph it is evident that, the worth of the exported items is
€676million. The export rate and the rate of production provides am important fact that if a
company based in France wants to expand its commerce in Germany, the organization will get
ample chances to flourish.
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2.2 Annual Spending on Writing/Drawing Materials per Capita
(Refer to the appendix for the graph)
Figure 3: Annual worth of Stationery Items in 12 countries
(Source: MGCC Perspectives, 2018)
‘Duque Papetiers Gros’ wants to expand its operations in a country within Europe. When an
organization wants to expand its business, it is very important to analysis the market where it is
planning its expansion. This analysis helps the organization to assess opportunities and potential
risks. The yearly spending of 12 nations regarding stationery goods has been devised in the table
give above. In the first three nations given in the table the yearly outgoings regarding stationery
items is the highest. In Switzerland, Austria and Germany the expenditure is €35.50m, €35m and
€35.20m respectively. Looking at the expenditure rates of the countries mentioned above it can
be concluded that ‘Duque Papetiers Gros’ will get potential customers in these countries. The
organization should not consider the eastern European countries for expansion as the expenditure
rates regarding stationery items is quite low.
If the organization, decides upon to expand its business in Slovakia, Hungary and Italy, it won’t
be make to make a humongous amount of profit. Till now, the market of Germany has been a
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profitable market to the organization. In the table given above, the last three countries that are
Poland, Croatia and Czech Republic have the lowest expenditure. Therefore, it is not a feasible
idea for the organization to expand its business here.
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2.3Analysis of Duque’s last three financial years of sales data (2015-2017)
A. (Calculations provided in the Appendix)
Figure 4: Annual Sales of Duque for the last 3 years
(Source: Created by the learner)
B. (Refer to the Appendix for pie diagram)
The annual sales for the year 2016 and 2017 for the organization are being represented by the pie
diagram. In the year, 2016 the annual sales of the company has been good and it is observed that
the organization has witnessed the maximum sales in the writing materials and shredders. The
graph also deduced the fact that the yearly sales of writing and drawing material has increased in
2017 but the overall sales has witnessed a downfall.
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C.
Table 1: Correlation Coefficient of Annual sales
(Source: Created by the learner)
Figure 5: Through scatter diagram the financial sales of Duque is being represented.
(Source: Created by the learner)
In the scatter diagram given above, the yearly sales for the last 3 years of ‘Duque Papetiers
Gros’ has been presented. R2 indicates the relation between the two variables. When the value of
R comes near to 0, then the prediction of the results tends to be fragile. However, when the value
of R tends to be close to 1, the value of the prediction is stronger. The value of R2 stays between
0 to 1. The value of R2 for the year 2015-2016 is 0.9. This indicates that the prediction is strong.
The value of R2 for the year 206-2017 is 0.85. This indicates appropriateness of the value. The
R2 value for the year 2015-2017 is 0.54 and this implies the existence between two variables.
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D. The diagram of liner progression which is given above indicates that there is a chance that the
organization will witness a strong growth in the coming years. There was not any marginal profit
made by the organization in 2017 but it is assumed that as the year will come to an end the
organization will witness a growth in the profit margin.
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2.4 Feasibility of Expanding to Germany & International Standards
A.
Table 2: Table of benefits and drawbacks related to the business
(Source: Created by the learner)
A business unit has to deal with many benefits and barriers while applying a new business
strategy. The above score represents that the company will enjoy more benefits than drawbacks.
The above pictures prove that if the company will initiate its business operations in Germany, it
will experience its success in Germany.
B. A company should be familiar with and comply with the international policies to align the
rules and regulations in that particular country for conducting business there. If an organization
can comply with the rules and regulations in international standard, then the barriers in the path
of the business will be minimized for introducing its new products and services or applying their
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business strategies in the new business structure. ISO standards are the standards for purity and
quality of the products and services (Bevan, 2015). Some examples of ISO standards are the
following:
ISO 4217: 2015- The purpose of maintaining this international standard is for ensuring that the
organization is using proper currency codes. The alphabetic or alphanumeric use of currency
codes makes it easier the access of international monetary transactions.
ISO 45001: 2018 – The purpose of maintaining this international standard is to make sure that
the workplace related accidents are prevented. This standard can be said as ‘Management system
of occupational health and safety – requirements’. This standard reduces the chances of accidents
and thus, prevents death and injuries by providing safety of the employees in their work place.
ISO 50001: 2011 – This international standard proves that the organization is improving
continuously their business activities. This standard proves that the organization promote growth
and development and modifies its products and services according to the needs and requirement
in the market.
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2.5 Costs of a New Building
A. The interest is applicable at beginning of every year and the monthly repayment of the loan
will be repaid in the following way:
Loan repayment duration is 30 years (time, t)
Initial Loan = €200,000 (Principal amount, P)
Monthly repayment amount = €1767.99
B. When the interest is applicable in the beginning of every month, the repayment will be as
follows:
P=R*[(1-(1+r) ^-n)/i]
In the above equation,
The payment size is (R), which will be identified
The principal amount of loan is €200,000 (P)
Interest rate applicable here is 10% (r)
360 is the total number of days (n)
The interest every year will be paid 0.1/12 (i)
Hence, the value of R found here is € 1755.
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2.6 Mean Value of Orders
In this point, the mean value hypotheses and the order of magnitude are the same and that is
€240
50 accounts were chosen at random basis to generate sample mean and the mean was €230 an
indicates that we cannot consider the order of magnitude as €240
H0μ = €240
The standard deviation was €43 for the 50 accounts that have been selected at random above an d
this is reasonable.
According to the justification of the problem the level of significance here assumed is 5% which
suggests that the standard deviation calculation is necessary here.
The application of standard error is also necessary here that is s√n/ and after the insertion of the
value it stands 43√50/. The result thus, received is 6.08 (Decimal is considered here up to 2
points)
Identification of every sample will be easy in case the interval vale is taken 228, 252.
Thus the null hypothesis and the middle value applicable for Duque will be €230 and 230.
Therefore, from the above calculation it can be considered the value of the order of the
magnitude stands approximately is €230.
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2.7 Customer Satisfaction
A.
Customers’ loyalty is an important element in every type of business. Customer loyalty can be
said to be a plus point through which the customers of one particular company choose that
company’s products and services over other competitors (Kandampully et al., 2015). Normally,
when a customer is loyal to a particular company, he or she does not think of the prices or
availability of products. The loyal customer is agreed to pay more and enjoys the same quality
products he or she love and like. Customers’ loyalty is important to run any type of business with
productivity and profitability. Building customer loyalty leads to more business in the company.
The loyal customers will purchase the products and enjoys the services of a company repeatedly
and the business will automatically grow.
It is significant that the organization should retain continuously a large number of loyal
customers. If the customers stop buying products of the company then there will be loss in the
business of the company and the profit and productivity of the company will be decreased (Hill
and Alexander, 2017). The pioneers of the company will take the feedback of the customers of
the company and will modify its products and services accordingly to make a growth in the
company. Apparently, in this case, Duque has not been able to keep the feedback of the
customers and he has been failure to modify its products and services (Heath, 2014). As a result,
the customers have not been attracted by the products and service of the company. The company
distribute questionnaire in the festival of Christmas.
The company, to take the updated feedback of the customers, should take regular feedback
throughout the whole year instead of planning the survey during only Christmas. The
questionnaire of company should be popped up in the website of the company and customers can
share their feedback whenever they purchase any product or the company.
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Table 3: Description of the four mentioned variables
(Source: Created by the learner)
From the above statistics, it is clear that the sales staff standard deviation and the quality of
customer service are high but the price is less. The customers are not properly provided with the
products. At the same time customers have expressed their dissatisfaction regarding the service
of the company. In the above statistics, the value is 1.95 that means that the company is still
unable to gain the loyalty of the customers. The company should develop its service for gaining
the satisfaction of the customers.
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3. Conclusions
This assignment, has thoroughly evaluated that stationery markets that are present in the nations
in Europe. ‘Duque Papetiers Gros’ wants to expand its business in some other countries in
Europe. Belgium and Germany has been considered as the countries which hold potential
opportunities for the above mentioned organization. The drawbacks has been identifies which
will help the organization to make changes in the products so that the needs of the consumers can
be sufficed. Through continuous analysis, Germany has been considered as the most potential
option for market expansion. The organization will gain high scales of profits if it plans to trage
in this country.
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4. Reference List
Dash, M., Sharma, K., Bose, A. and Lakhani, A., 2018. Impulse Purchase and Impulse Non-
Purchase in Book & Stationery Retail Outlets in Shopping Malls. International Journal of
Marketing & Business Communication, 7(1).
Iso.org. (2018). About us. [online] Available at: https://www.iso.org/about-us.html [Accessed 06
Aug. 2018].
Kim, H., 2016. Stationery box with rotary calendar. U.S. Patent Application 14/722,988.
MGCC Perspectives (2018). MGCC Perspectives, (2), pp.7-20.
Setiawan, A., Budhi, G.S., Setiabudi, D.H. and Djunaidy, R., 2017, September. Data Mining
Applications for Sales Information System Using Market Basket Analysis on Stationery
Company. In 2017 International Conference on Soft Computing, Intelligent System and
Information Technology (ICSIIT) (pp. 337-340). IEEE.
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