Duque Papetiers Gros: Business Expansion Analysis in Germany

Report for Duque Papetiers Gros
Date: 25th of June, 2018
Table of Contents

1. Introduction...........................................................................................................................1
2. Analysis of Issues for Duque Papetiers Gros........................................................................2
2.1 An Overview of the Wholesale Stationers Market in Germany.........................................2
2.2 Annual Spending on Writing/Drawing Materials per Capita.............................................4
2.3 Analysis of Duque’s last three financial years of sales data (2015-2017)..........................6
2.4 Feasibility of Expanding to Germany & International Standards.......................................9
2.5 Costs of a New Building...................................................................................................11
2.6 Mean Value of Orders.......................................................................................................12
2.7 Customer Satisfaction.......................................................................................................13
3. Conclusions.........................................................................................................................14
4. References...............................................................................................................................15
4. Appendices..........................................................................................................................16

1. Introduction
Analysing the business status of a particular industry or market is beneficial for organizations
who are potential new entrants. Conducting a proper analysis is also advantageous for the
organizations that are looking forward to expand their business in foreign countries. The
company ‘Duque Papetiers Gros’ is France based wholesale stationery company that
specializes in providing printer cartridges, paper-based supplies and many other stationery
items. They have a strong customer base in France and currently, they intend to expand their
business in Germany and Belgium. Both these places are considered as suitable for stationery
market. This assessment conducts a proper analysis of the stationery market of some of the
European countries, focusing mainly on the market of Germany and form a conclusion whether
the market is suitable for business expansion 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 German stationery market is one of the biggest contributors in the economic development
of the country. In the years between 2014 and 2015, more than 70% of the wholesaler and
retailers of the country witnessed profits in their business and it is expected to increase in the
upcoming years. At the same time, the domestic demand for stationery items grew by 2.5%,
while the international demand grew by 5% between the years of 2014-2015 (Dasanayaka et
al., 2017). The demand in German stationery items grew due to the intervention of creativity in
the ordinary notebook or pens. The country is home to some of the eminent names in the global
stationery market such as Faber-Castell, Montblanc, Lamy, Stabilo and many more (Han and
Ma, 2018). The production, import and export of the stationery items of the country will
provide a better insight to the suitability of conducting business in the country.
Figure 1: Production rate of stationery items in Germany
(Source: MGCC Perspectives, 2018)
From the chart depicted above, it can be said that the production rate of stationery items has
amounted to about €510 million in the year of 2014. According to the MGCC reports, the rate
of export has also increased in the year of 2014 and it is much higher than the import rate of the
country. The production and export rate of the country suggests that Duque will be able to gain
substantial amount of profit in Germany. The convenience related to e-commerce will allow
the company to distribute their products effectively.
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Figure 2: Export rate of writing instruments in Germany
(Source: MGCC Perspectives, 2018)
The above chart depicts the export rate of various writing instruments from the stationery
market of Germany. In the year of 2014, the stationery market of the country exported
stationery items worth of €675.7 million. The German stationery market is driven by an intense
tendency to consume and invest equally by private and commercial customers respectively
(Dash et al., 2018).
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2.2 Annual Spending on Writing/Drawing Materials per Capita
(Appendices- Bar graph)
Figure 3: Annual Spending of 12 countries on stationery
(Source: MGCC Perspectives, 2018)
From the above table, it can be stated that the countries Switzerland, Germany and Austria
have the highest per capita expenses in terms stationery items. France follows up next in the
list for having a per capita expense of €28.30m. However, since the company is already
operating in France so the former three countries can be considered suitable for Duque’s
business expansion. The combined expenditure of the three countries on stationery items is
€105.7m. These three countries have the ability to provide substantial amount of opportunity
for the company to flourish in their market and gain customer loyalty.
Initiating business operations in the Eastern European countries will not be considered suitable
for the company. The per capita expenses of these countries are very less which implies that if
Duque decides to operate in those countries they will not be able to gain enough profit in their
business. If the per capita expenditure of the Eastern European countries is combined then they
will generate the value of €24m, which is very less than the combined value of the countries
Switzerland, Germany and Austria. If the company decides to expand their operations in
Slovenia, Italy and Slovakia then the company will earn moderate profits. The per capita
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