Market Analysis: Duque Papetiers Gros Expansion Strategy in Germany

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Added on 2024/07/12

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This report provides a comprehensive analysis of Duque Papetiers Gros' potential expansion into the German stationery market. It begins with an overview of the wholesale stationers market in Germany, highlighting key players and market trends. The report then examines annual spending on writing and drawing materials per capita in various European countries, assessing the potential customer base in Germany. A detailed analysis of Duque's sales data from 2015 to 2017 is conducted to identify trends and patterns. The feasibility of expanding to Germany is evaluated, considering international standards and the costs associated with establishing a new building. The report also analyzes the mean value of orders and the importance of customer satisfaction and loyalty. Ultimately, the report aims to provide insights into the opportunities and challenges facing Duque Papetiers Gros as it considers expanding its business operations into Germany.

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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