Duque Papetiers Gros: International Expansion Feasibility Report

Desklib provides past papers and solved assignments for students. This report analyzes Duque Papetiers Gros' potential expansion into Germany.

Analysing Information and Data for Problem Solving
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Contents
Introduction................................................................................................................................3
Analysis of Issues for Duque Papetiers Gros.............................................................................4
An Overview of the Wholesale Stationers Market in Germany................................................4
Annual Spending on Writing/Drawing Materials per Capita.....................................................4
Analysis of Duque’s last three financial years of sales data (2015-2017).................................5
Feasibility of Expanding to Germany & International Standards..............................................8
Costs of a New Building............................................................................................................9
Mean Value of Orders................................................................................................................9
Customer Satisfaction..............................................................................................................10
Conclusion................................................................................................................................12
References................................................................................................................................13
Appendix..................................................................................................................................14
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Introduction
Duque Papetiers Gros is a business which deals in manufacturing of wholesale stationery
products to various suppliers in France. This business wants to expand into the international
market but is currently facing some problems. There are solutions to this problem which can
help the business flourish in this industry sector. Also by conducting different surveys, like
questionnaires, the business can find out about the goodwill it has generated in the market.
Duque also wants to expand into foreign market. A proper research about how to enter the
international market has to be done and what rules and regulation should the business adopt.
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Analysis of Issues for Duque Papetiers Gros
An Overview of the Wholesale Stationers Market in Germany
The stationary market includes selling or supplying of pens, papers, notebooks, etc. in which
Germany has experienced many trends. Wholesale stationary supplier market in Germany has
been growing at a steady rate throughout the years. Digital technology has impacted the way
in which stationary market has been performing. Because of this there has been a more
incline towards implementing digital technology in the stationary market. Most of the times
these stationary products are bought online rather than on retail stores. According to various
reports it is seen that even though there is a rise in digital technology, paper products still
held the largest share in the market. Germany has been leading in the stationary market in all
of Europe.
Annual Spending on Writing/Drawing Materials per Capita
England
Germany
Switzeland
France
Czech Republic
Croatia
Poland
0
500
1000
1500
2000
2500
3000
3500
4000
4500
Annual Spending
Spending
Millions
It can be seen in the graph that England has come out with the most annual spending in
stationery with around €45 million. England is a large country with an economy that is
already stable and also is one of the most populated European countries. One can say that the
demand of stationery products can be expected high. Germany and Switzerland are both
relative close on spending almost the same amount on stationery products. This can be good
for Duque as it wants to venture into the internationally market of Germany. The country will
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provide for easy market capture but the only risk here would be that there is a lot of
competition. The competition would either make Duque innovate for new ideas r complete
destroy its market forcing it to go into loss. Countries like Czech Republic, Croatia and
Poland are not that much in into spending money on such products. After Duque expands into
Germany it can look for more places to expand into by looking at the chart. Switzerland can
be one of these as it is on the rise of the wholesale stationery industry (Statista, 2019).
Analysis of Duque’s last three financial years of sales data (2015-2017)
2015 Sales (€)
printer cartridges
general office supplies
low-cost printers
office furniture
shredders
paper-based supplies
writing/drawing materials
According to the 2015 sales of Duque’s data the least of its sales is known to be low-cost
printers. While the other products sale where the same. The good thing about low cost
printers not being sold is that the manufacturing process these printers would have also been
low. But the main point is that the cost incurred to manufacture and advertise would be added
to the losses. The printers that were not sold would have to be dealt with for example sold on
discount.
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2016 Sales (€)
printer cartridges
general office supplies
low-cost printers
office furniture
shredders
paper-based supplies
writing/drawing materials
During the year 2016 there was a rise in the sales of every product, except office furniture,
when compared to its previous year. The most products that were sold were writing and
drawing materials. The good thing about this is that the loss that was experienced last year by
Duque would be reimbursed this period by the profits that were made. The only bad part
about this is that the office furniture was not sold that much.
Formulae:
2015 Sales: =SUM(C3:C9)
2016 Sales: =SUM(D3:D9)
2017 Sales: =SUM(E3:E9)
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0.5 1 1.5 2 2.5 3 3.5
155000
160000
165000
170000
175000
180000
185000
Total Sales
Total Sales
Axis Title
Axis Title
Looking at the scatter diagram for the three years it can be seen that there has been a slight
decrease in the stationary products from the consumer side. The next years (2018) report
would predict a sale of around 170000 because if Duque would expand into the international
markets so it would be new to these markets and may experience fewer sales of products. But
in the next year being 2019, the sales could rise because Duque would have penetrated into
the international markets and easily start to make profits.
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Feasibility of Expanding to Germany & International Standards
Should I expand my business to Belgium & Germany?
Pros Score/10 Cons Score/10
Better growth is present in
the international market that
may not be achievable in the
original market.
Risk can be involved from
the political side in the
international market.
Once in the international
market the business would
be able to make more
money.
The exchange rate in the
country could be in a very
critical decision.
A business can overcome or
be helped by their presence
in the international market.
For example if their origin
market is running low then
they can easily survive from
the international market.
Various work culture can
be different in each
country.
The larger a company
manufactures the lower its
costs will start to become.
The skills and structure of
the countries may be
different.
New skills and knowledge
can be gained from the
international market.
Another problem that may
be faced by the business is
that it has risks of the ideas
and innovations being
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stolen.
Also the business can gain
access to technology that
was not present before.
New rules and regulations
may be present in the new
market that may not be
working for the business.
Competition increases which
will help the company come
up with new ideas.
All of the factors may not
be controlled by the
business (Chron, 2019).
Total Pros Total Cons
Average Pros Average Cons
European standards are those which describe the rules and regulations that a business has to
follow. Not only have these standards showed how the service should be delivered and also
the quality of each product. Duque has various products that it delivers to different
organisations and will have to follow all of these rules. If these standards are not met then the
business will have to pay some sort of compensation or will have to close down.
Costs of a New Building
Calculation of Monthly Cost:
Calculation of Monthly Cost:
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Mortgage is when banks lend money to a business so that it can set up a building for usage.
Duque would need to take loan form a bank so that it can set up into the international
markets. There are different banks which offer a wide range of mortgage for purpose. There
are different types of loans that are present in Germany:
 RahmenKredit: this type of loan is usually for personal use with payment fixed in a month.
 Immobilien: this is the type of loan that Duque would be interested in because this is the one
which will provide the business for mortgage loan. Also loan is provided for homes in this
type of loan in Germany (Banks Germany, 2014).
The borrowing rate differs from bank to bank. Duque can take mortgage from the this
following bank:
ING bank is situated in Germany which has a 0.96 per annum interest and the mortgage
amount is loan is to be returned in five years. But the lending amount is only 60%. According
to the mortgage amount the rate raises for example if the amount for lending is 80% the rate
for borrowing would be 1.13%. Also if a business wants to repay the mortgage in a longer
period then it would have to pay more of the interest rate. For example is Duque wants to
take a loan for 10 year then the interest rate would increase to 1.40%. The main principle for
this bank is to create international standards for attracting international firms (ING, 2018).
Mean Value of Orders
Many orders are received every month through which it hard to keep track of them. This can
be a problem for the business as losses can be occurred by this kind of practice. So Duque has
decided to try a new method for solving this problem. Duque has come with a new technique
being that it will now take fifty samples and see if this technique will work. If it does then the
business will start to adopt this technique.The standard test formula was used to help for
helping to solve this arisen problem. These tests are a way for one to compare two units and
sees if the data can be used for further generation. For this problem the‘t-test’ formula was
used. Various types of t-tests are used:
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 A sample where the populations mean is calculated.
 Another one being when two units, not being same, are compared with each other.
 And the last one is when two similar units mean is compared.
Formula for Calculation of t-test:
By
using this formula it was calculated that the sum was 1.699. This means that the new
technique which was put out for solving this problem has come out to be a positive one. It has
almost ninety percent of success rate.
Customer Satisfaction
The questionnaire which is given has not proved to be effective in achieving nay data
regarding the response form the customers. The questions in the survey are too simple and
can be found for any other company, Duque should consider in making its survey or unique.
For example, it can make the survey more attracting so that the customers feel obliged to
answer it. Another option would be to make the questions more interesting so that the
customers are interested while answering the questions. The questions asked should be in
respect with the most number of products sold. Also it should be kept in mind that the
questions should not be the ones that the answers are already known to. More questions could
have been asked about the products and which the products the consumers like the most
rather than just asking about how they like the business. There is a repetition of similar
questions in the questionnaire; there should have been different questions. The targeted
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audience should have been kept in mind while making of the questionnaire (Edelman, 2014).
The questionnaire should have included a question in which they asked about if they should
give discount on their products. The consumer would be attracted to such questions and
would appreciate to fill out the questionnaire. Lastly the questionnaire should look more
presentable by:
 Adding the business logo
 Adding different designs
 Making the whole survey online rather than printing it on paper (Survey Monkey, 2019).
Customer Service
X F
2 3
3 4
4 13
Mean 6.6
Standard Deviation 5.5
Quality Product and Service
X F
3 17
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