Duque Papetiers Gros: Expansion into German Stationery Market Report

This report analyzes the potential for Duque Papetiers Gros, a wholesale stationery business, to expand into the German market. The report begins with an overview of the German wholesale stationery market, highlighting its size, growth trends, and the impact of digital technology. It then presents a graph comparing annual spending on writing materials per capita across various European nations, emphasizing Germany's position as a significant market. The report includes an analysis of financial data, including a correlation coefficient and sales forecasting for 2018 and 2019. A SWOT analysis is performed, considering the pros and cons of expanding into Germany. The report also covers relevant international standards and calculates the cost of a mortgage for a new building. Furthermore, the report includes hypothesis testing regarding the mean value of orders and provides advice for improving customer satisfaction, along with descriptive statistics. The conclusion summarizes the key findings and recommendations regarding the expansion strategy.

Report for Duque Papetiers
Gros

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Providing an overview of the wholesale stationers market in Germany .........................1
TASK 2............................................................................................................................................2
2.1 Presentation of graph to show annual spending on writing materials per capita in Europe. 2
TASK 3............................................................................................................................................3
3.1 Analysis of financial data of sales....................................................................................3
TASK 4............................................................................................................................................5
4.1 Expanding business in Germany......................................................................................5
TASK 5............................................................................................................................................6
5.1 Cost of mortgage of new building....................................................................................6
TASK 6............................................................................................................................................8
6.1 Mean value of orders........................................................................................................8
TASK 7............................................................................................................................................8
7.1 Customer satisfaction.......................................................................................................8
TASK 8............................................................................................................................................9
Conclusion..............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business is required to expand operations to various markets to achieve desired results.
The present report deals with Duque Papetiers Gros which is small business firm engaged in
wholesale stationery products. It is planning whether to expand in German market or not. The
report outlines sales data and merits of expanding business to German as it is the highest
spending nation on stationery products. Mean and standard deviation is calculated to see the
ratings of customers on the basis of products provided by it. Moreover, advice regarding increase
in responsive rate of customers towards filing of questionnaires is discussed as well.
TASK 1
1.1 Providing an overview of the wholesale stationers market in Germany
The stationers' market of Germany is the key sector which provides good income to the
overall GDP to the economy. It has quite effective wholesale stationers market which is in good
position (Bank, Bryant, Denner and O'sullivan, 2017). This is evident from the fact that whole
industry is around 14.8 billion in euros. This figure provides clarity that each person spends
around 182 euros annually. Moreover, more than 70 % of the businesses of stationers were on
upward trend as sales was increased up to high extent in 2015. This shows that industry is
performing quite good in the market which has already garnered good quantum of sales.
In contrary to this, current trend of German stationers market is good as well. But paper
and document folders have witnessed a decline in sales. This is because digital technology has
prevailed in past couple of years and as such, sales are considerably declined which is affecting
wholesale market of Germany quite adversely (Klein, 2017). Apart from this, office supplies and
other writing materials have witnessed good amount of sales in effective way. Well-structured
strategies have been adopted by wholesalers to inject sales in current scenario which is selling
the office supplies to commercial customers without involving retailer. This has helped markets
to grow in the best possible way as customers are satisfied up too much extent and sales are
injected as well. Moreover, German's main pharmacy firms have diversified businesses in
stationers market so that they may be able to garner more profits.
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TASK 2
2.1 Presentation of graph to show annual spending on writing materials per capita in Europe
The graph shows about annual spending on writing materials per capita in various nations
of Europe. It can be interpreted that Switzerland is the highest European nation which is
spending more than 35.5 euros on annual basis which marks its first position among other
nations. On the other hand, on second position is Germany with annual spending of 35.2 in the
wholesaler stationers market (Breslau, Stein, Han, Shelton and Yu 2017). On next position
comes Austria which has spending of 35 annually. On fourth position comes France having
annual spending on writing materials of 28.3. While, Slovenia comes at fifth position among
other nations having total of 20.4 and on next position comes Italy having total spending of 18.6.
Switzerland
Germany
Austria
France
Slovenia
Italy
Slovakia
Hungary
Spain
Poland
Croatia
Czech Republic
0 5 10 15 20 25 30 35 40
Spending in €
It can be interpreted from the graph that on seventh position comes Slovakia having 9.8
in euros spending on annual spending. On eighth position, Hungary spends around 9.6 on annual
basis. In addition to this, Spain has annual spending of around 8.9 which marks ninth position of
it. On tenth position comes Poland, another European country having total spending on writing
materials around 8.5. On the other hand, second last position on spending comes of Croatia
having 7.9 and on last position Czech Republic comes having spending of 7.6. Thus, it can be
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said that Switzerland is spending quite more than compared to other nations marking first
position. Whereas, Germany is also not way behind it spending much amount on stationery
writing materials. Thus, Germany is the biggest market spending money on stationery.
TASK 3
3.1 Analysis of financial data of sales
A)
B) Mixed pie chart
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C) Correlation coefficient
4
Illustration 1: Computation of correlation coefficient

Interpretation-
It can be interpreted from the above calculation of correlation coefficient that sales are
moderate as correlation prevails between 0.25 to 0.75. This means that sales are moderately
increasing year after year. Correlation method shows relationship among two variables and was
developed by Pearson (Correlation Coefficient: Simple Definition, Formula, Easy Steps, 2018 ).
It is quite used in linear regression. This means that sales of Duque Papetiers Gros is moderately
increasing towards upward trend which shows positive correlation between variables. If
correlation coefficient comes more than 0.4, then it shows positive interaction of two variables.
This is showed in the calculation that correlation coefficient comes to 0.73 which is near to 1.
This implies that for every increase in one variable, then other variable will be also increased in
the same manner. The value of correlation coefficient which is 0.73 shows that there is stronger
relationship between two variables. This means that larger the number of coefficient, more
strong will be the relationship of them (Chen, Hanson and Stein, 2017).
D) Forecasting trend for 2018 and 2019
Trend for 2018
Y = 6500 * 4 + 162000
= 188000
Trend for 2019
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Y = 6500 * 5 + 162000
= 194500
It can be interpreted that sales of the company will increase in 2018 and 2019 up to high
extent. This is reflected in the above chart and calculation that trend for 2018 will be 188000
which is 178000 in 2017. On the other hand, sales trend for 2019 will be 194500 which is
increased by reasonable margin. Thus, sales of the firm will be increased in coming future.
TASK 4
4.1 Expanding business in Germany
A)
Should I expand my business to Belgium & Germany?
Pros Score/10 Cons Score/10
Customer satisfaction 4 Capital requirement 2
More revenue 2 Incurring costs 1
High scale of business 2
Total Pros 8 Total Cons 3
Average Pros 2.7 Average Cons 1.5
Germany has the highest spending on the writing materials which is already discussed in
the preceding paragraphs. It can be said that German could be the best option for expanding of
Duque Papetiers Gros as it will be able to sale more of the goods to customers and ensure healthy
sales which will be beneficial for company to earn desired revenue. Germany's stationers market
is the main factor for driving sales and is much beneficial for the country as more revenue are
generated alone from this sector (Boerschinger, Svitavsky and Yoder, 2017). Another pros of
expanding business in Germany is that it revenue will be produced as it is the second highest
spending nation on writing materials and paper related products with 35.2 euros which makes
first choice of several businesses as with much of spending income on stationery products,
organisation may earn revenue with much ease. Another merit is that scale of the business will
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become more. This is because 81 million of citizens have high purchasing power than other
European nations. This implies that wholesale stationery market is widely open for the company
and it can easily sell products to customers in effective way.
In contrary to this, expanding business in Germany is not suitable. The main reason
behind this is that more of the capital will be required to expand the business. Moreover, it will
have to look for source of funds for raising capital. Another demerit is that company will have to
incur more of the costs including fixed and variable costs. But apart from cons, there are more
cons which states that Duque should expand market to Germany for better market growth and
share in effective way (Casserly, 2018).
B) International standards
1. ISO 26000- Social responsibility
This standard deals with operations of organisations so that they may think of welfare of
society.
2. ISO 45001- Occupational health and safety
Employees should be provided with full safety at the workplace so that they may work in
safer conditions.
TASK 5
5.1 Cost of mortgage of new building
A) Cost of monthly mortgage calculation
T = 30 years
r = rate of interest on mortgage
Repayment of loan
= Loan amount / Discounting factor
= 200000 / ({[ (1 + 0.10) ^ 30] – 1} / [0.10 (1 + 0.10) ^ 30])
= 200000 / 9.42
= 21215.85
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For calculating monthly payment, formula is
= Repayment amount / 12
= 21215.85 / 12
= 1767.98
B) Interest applied and re-calculate monthly cost
N = 30 / 12
= 360
r = 10 % interest rate / 12
= 0.00833 per month
= 200000 / ({[(1 + 0.00833) ^ 360] – 1} / [0.00833(1 + 0.00833) ^ 360])
= 200000 / 113.99
= 1754.55
Thus, this is the mortgage cost which needs to be fulfilled by the business so that it may
be able to expand operations in German and then satisfy customers with much ease.
TASK 6
6.1 Mean value of orders
Testing of Hypothesis
Null hypothesis – There is no significant difference between mean value of orders and sample
mean
Alternative hypothesis – There is significant difference between mean value of orders and
sample mean
Performing z score test
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Formula,
z = (x – μ) / σ
= 240 – 230 / 43
= 0.23
It can be interpreted that null hypothesis is accepted as value of z is more than 0.5. The
value of z score test from the table is 0.5910 which means that there is no significant difference
between two variables. If the value of z score would have less than 0.5, then it would have been
stated that there is significant difference between two variables up to high extent. In addition to
this, value is obtained by using normal distribution curve (Bordo and Haubrich, 2017). This
implies that test have been performed using normal population.
TASK 7
7.1 Customer satisfaction
A) Advice for improving responsive rate
The situation can be improved by providing survey in concise way. It should not be long
as customers will not tend to reply. Moreover, responsive rate can be increased by telling
respondents about the aim and purpose of the same and why information is required by the
company. Duque's will be able to increase responsive rate in effective manner by utilising the
feedback of the survey (Zhang and Warner, 2017). Moreover, use of jargon should not be made
as it will decrease responsive rate because customers will not be able to understand questions.
Open-ended questions should be asked in the questionnaire so that they may be able to answer
easily and share valuable feedback. Anonymity should be made and name of respondents be
remained undisclosed. This will help them to answer quite easily. Thus, it is advisable to the
company to implement these tips and responsive rate may be increased up to more than 5 %.
B) Descriptive statistics
CUST_SERV QUAL_P&S SALES_STAFF PRICE_VALUE
3 3 3 3
3 3 3 2
4 4 4 2
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4 3 4 1
2 3 2 2
4 4 4 2
4 3 4 2
4 3 4 2
2 3 2 2
4 3 4 1
4 3 4 2
4 3 4 2
4 3 4 2
4 3 4 1
2 3 2 2
4 3 4 2
4 4 4 2
3 3 3 3
4 3 4 2
3 3 2 2
Mean 3.5 3.15 3.45 1.95
Standard
Deviation 0.7608859103 0.3663475485 0.8255779475 0.5104177855
It can be interpreted that mean and standard deviation shows that prices are treated fairly
as rating is 2 and as compared to other good ratings (Rönnberg, 2017). Thus, company should
reduce prices to achieve excellent ratings i.e. 4.
TASK 8
Conclusion
It can be concluded that firm is able to achieve good sales and profit is maximised as
well. It should expand business in Germany as it is good stationers market which has immense
purchasing power of customers which means that it is business friendly nation. The current trend
of German market is also on upward trend which means that good quantum of revenue is being
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