Duque Papetiers Gros: Business Analysis and Market Opportunity

This report provides a business analysis for Duque Papetiers Gros, a French stationery company, exploring its potential expansion into the German market. The analysis includes an overview of the wholesale stationers market in Germany, annual spending on writing and drawing materials, a review of Duque's sales data from 2015-2017, a feasibility study of expanding to Germany, cost considerations for a new building, order value analysis, and customer satisfaction factors. The report utilizes SWOT and PESTEL analyses to assess the opportunities and challenges facing Duque Papetiers Gros in the German market, ultimately providing insights into the company's potential for success. Desklib offers a wide range of similar business reports and solved assignments to aid students in their studies.

Report for Duque Papetiers Gros
Date: Dec 19th, 2017

Report for Duque PapetiersGros 2017
Executive Summary:
Every new company who wants to make overseas business must consider several factors that
affect the business in a complete new environment. Duque Papetiers Gros wants to make their
business in German market and their strengths in making the materials of writing and drawing.
They generally make wholesale business in the French market as a result they have huge
reputation of their products in the local market. Therefore, the company can make sustainable
planning for the international business depending upon the traders from the Germany. This will
help to make their goodwill and at the same time it will fulfil the customers’’ satisfaction.
1

Report for Duque PapetiersGros 2017
Table of Contents
Introduction...................................................................................................................................3
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.................................................4
2.3Analysis of Duque’s last three financial years of sales data (2015-2017)...............................6
2.4Feasibility of Expanding to Germany & International Standards............................................8
2.5Costs of a New Building........................................................................................................10
2.6Mean Value of Orders............................................................................................................11
2.7Customer Satisfaction............................................................................................................12
Conclusions.................................................................................................................................13
References:..................................................................................................................................14
Appendices..................................................................................................................................16
2

Report for Duque PapetiersGros 2017
Introduction
Duque Papetiers Gros is s small family stationary business in Northern France, which is owned
by Donald Duque. However, Donald wants to know the prospect of making new market in
other countries and the possibilities of gaining success in that process. The main aim is to find
out the statistical business analysis and its effects upon the relatively smaller businesses. Duque
is not likely to sell the products in retail rather than they are emphasising on selling the goods
on the wholesale basis in Northern France. Until date, there is no factory or sales outlet of them
outside France, so they want to expand their business in a new country and to observe the facts
that affects the process. Therefore, in this context there will be discussion about the facts that
will help Duque to fulfil the tasks.
3

Report for Duque PapetiersGros 2017
Analysis of Issues for Duque Papetiers Gros
2.1 An Overview of the Wholesale Stationers Market in Germany
Three major trends are continuously having the impact upon the retail market business in
Germany. This business has continuously been becoming as aging industries that has reduced
the demand of the repeated school products. However, those products, which are very
lucrative and easy for displaying, are gaining markets in Germany. Now for Duque Papetiers
Gros to make their business in Germany, they have to understand the facts that may provide
them acceleration in gaining market for their products. This trustworthy company makes the
overall turnover process about 3.5 percent during the first year of its sales and the condition of
local market has improved compared to before (Sender et al. 2016). As the collaboration and
sharing, the business strategic planning used by the local vendors has improved their financial
growth and the products get an outstanding promotion in the local market. Apart from this, the
huge range of product offered by the stationary items and the need of local people as for
labour, strategic developer and indicating the areas in which they can launch the products to
promote their business has increased the demand of the local residents. As a result, the
company needs to make a proper statistical analysis that may prove helpful to gain the business
in the new market besides this, they have to take opinion from local people to understand the
market condition and type of customer and their choices. The turnover sales for Wholesale
market in Germany is about € 14.8 billion and the amount spend individually is near about
€181 annually. Almost € 35.2 only is spent for writing and drawing materials that makes
Germany second highest in terms of dealing stationary items in European market (Hall et al.
2015).
2.2 Annual Spending on Writing/Drawing Materials per Capita
As it has been discussed earlier that the wholesaler industries in Germany has managed to
continue the turnovers at the range of € 35 to € 40, which is the highest individual turnovers
recorded at the European market. The positive attitude of the companies has managed to make
the more than 70 of the German companies have manage to experience the increased sales in
the last few years. According to the report published by the German stationary brand, the total
turnover has been recorded to be increased by 3.5 percent in 2014-2015 periods (Zheng, et al.
2016.).
From the annual report published by the company, it has been observed that their retailing
strategy has gone through enormous uprising facts. The local market has faced the demand by
2.5% and the figure in international market has grown by 5%. Their vision 2020 strategy is
4

Report for Duque PapetiersGros 2017
about to reach the desired target of gaining almost 10% increases in the international market
sales and to fulfil the innovative products demand in the market (refer to appendix 1). Apart
from this, the retail companies in France have produced effective concepts in the business in
the overseas market. However, the annual report of all other leading companies makes the fact
that there is symmetry in the process in the wholesale business. From the last decade, the
company has managed to make their business up growing and the process and the revenue
collection has reached the level of 67 % that is almost the € 27.4 billion overall (Silver et al.
2016). Apart from this, the operating profit, basic EPS and net cash from operating activities
have increased by 77%, 54%, 83 % respectively. This figure illustrates that the Duque
wholesale retail is able to manage create their business in Germany’s market. Besides this, as
the company sales their product in a wholesale basis, therefore, they can easily manage the
huge demand of the products in a new market (Iyer-Raniga and Dalton, 2017).
5

Report for Duque PapetiersGros 2017
2.3 Analysis of Duque’s last three financial years of sales data (2015-2017)
Product item 2015 Sales (€) 2016 Sales (€) 2017 Sales (€)
printer cartridges 25000 26000 22000
general office
supplies
25000 27000 23000
low-cost printers 15000 18000 18000
office furniture 25000 25000 27000
shredders 25000 29000 29000
paper-based supplies 25000 27000 27000
writing/drawing
materials
25000 30000 32000
Figure 1: Product item sales per year (2015-2017 respectively)
(Source: Hall and Nemirovsky, 2015)
The above list entitles the entire product sales by DUQUE Papetiers Gros. There is an
estimation of the costs of sales by the company in consecutive three-year basis. The essential
commodities like low-cost printers, office furniture, shredders and so on, sales has been
increased from the last year. Therefore, this wholesale stationary market is an indication that
the company may gain acceleration in grabbing the European market. Above all the materials
supplies by the company the turnover for the writing and drawing materials is the most of
them. Eventually, the European market has also managed to take a prior advantage for the
turnover for the writing and drawing materials cost. It can be observed form the above table is
that, the sales has increased by €5000 in the 2015-2016 period and by €2000 in the 2016-2017
period. Hence, DUQUE Papetiers Gros can get an advantage in gaining the advantage for the
Germany market (Griffin and Anchukaitis, 2014). Compared to other companies available in
the same field, this renowned company has managed to collect most of their revenues in the
local market and is expected to retain their popularity in the foreign market. The cost of the
other products of the list has costs almost the same and the changes are almost constant. Hence,
for the long run the company is expected to generate lucrative amount of revenues in the local
as well as in the foreign market. According to the business market researchers, the growth is
expected to be uplifting and the market demand is also going to boost. Besides this, the
company must look for the innovative products by analysing the demand in the Germany’s
market (Braswell, 2017).
6

Report for Duque PapetiersGros 2017
2.4 Feasibility of Expanding to Germany & International Standards
SWOT Analysis:
Strength Weakness
 DUQUE Papetiers Gros has managed
to supply innovative and quality
products through market research. As
a result, there is huge development in
the local market for the essential
commodities.
 Being a new company in Germany’s
market, they need to gain acceleration
in the local market.
 The other products served by them like
low-cost printers, printer cartridges,
general office supplies and so on has
not upto the mark of customers’
satisfaction.
Opportunities: Threats:
 DUQUE Papetiers Gros has managed
to retain their popularity in the local
market and has supplied the essential
commodities at a suitable range of
prices. Hence, there is a possibility
that the company can make their
business smoothly in Germany’s
market.
 The products and their goodwill
should be promoted in the
international market.
 They must promote their brand and
product in both online and offline
process.
 To consider all the facts related to the
business growth and the related steps
to overcome the possible risks that
may come across their growth.
 The company may face excessive
challenges from its competitors and
this may hamper their business in the
overseas market.
 According to the market researchers,
the possibility of the company
regarding their business efficiency is
almost 50-55 percent that needs to
improve almost to the 90 percent while
promoting their business sin the
international market.
PESTEL Analysis:
Political DUQUE Papetiers Gros needs to follow the several policies and the rules
7

Report for Duque PapetiersGros 2017
provided by the French government for making the international business.
Apart from this, they must fulfil the demands and the guidelines provided by
the German government regarding the trading process in their market.
According to the legislations provided by the German government the taxes
paid by the foreign industries is more compared to the local companies.
Economic Economic factor is going to play a vital role as the business is going to be in
international market. The company must understand the effects of the
products in the local market and how the customers are responding to the
service.
Social Apart from the business point of view, the company must focus on socio-
cultural activities and the effects that drives the customer to purchase their
product.
Technical Technological up gradation must be included in the process as the various
software and the networking sites are coming out to be an innovative way to
promote the products.
Environmental Being and overseas business, DUQUE Papetiers Gros must follow the
environmental rules and regulation set up by the government while promoting
the trading process.
Legal There is always several trading law and taxation process for business, which,
the company must fulfil.
Porter’s Five Forces
Threats of new entrants: As it is a new company in international market, the company have to
pass through several challenges from Government policies, rules and guidelines. At any
condition, the company has to fulfil the regulations provided by the company. The parameters
like cost of material, capital revenue generation, and the brand equity development and so on.
Bargaining power of customers: It is the prime motto of the customers to avail great quality
products within the specified amount. As a result, there is bargaining in the retail shops and
company must provide the customer a suitable amount of discount and if they are interested to
buy the products at a wholesale rate, then the discount must be lucrative.
Threats of the substitutes: Substitutes always lowers down the demand of the existing product.
Hence, before launching any new product the company must consider the facts that whether
this product will be obsolete in long run or the up gradation may replace the product.
8

Report for Duque PapetiersGros 2017
Industry rivalry: Competition will be always there for a new company making business in the
overseas market. Hence, the company must take into consideration the similar companies and
their strength and weaknesses while launching any new product (Ennew et al. 2015.).
Bargaining power of suppliers: Suppliers are the backbone of the company that makes the
difference for a new company and new product. Therefore, if a particular product has only one
supplier in the market the price will go up eventually.
2.5 Costs of a New Building
As the company is going to make business sin the new market, there will be demand for new
buildings and new retail outlets in the foreign market. However, this is a serious point of
discussion as the lucrative design and the constructional features helps to attract customer.
Hence, the company must take all these factors so that they can make their business sustainable
in the market. However, the estimated cost of building sometimes falls short while making the
practical calculation. Hence, to overcome these errors DUQUE Papetiers Gros can take help
from the local merchandises to estimate properly. Furthermore, launching a new product needs
sufficient time and costs more in a new market. As a result, there are several factors involves in
the process of building and promoting new products. For the report development process, an
arbitrary description of the prices involved is taken. Hence, for ease of calculation the DUQUE
Papetiers Gros Company can take suggestion from the local business personnel about the cost
analysis. Eventually, the cost margin is justified for the company and the company can invest
more money in making new business.
9

Report for Duque PapetiersGros 2017
2.6 Mean Value of Orders
Mean value of orders can be classified as the e-commerce metric measure that helps to estimate
the average total order placed for a particular time. This is the prime factors by the companies
makes their trade in online process. Average value is calculated by the multiplication of the
revenue and the numbers of order placed in that specific time (refer to appendix 3). However,
the mean value of orders cannot help to measure the gross profit or the profit margins rather
than offers insight how these figures can be calculated. For an example, online clothing retailer
is providing three shirts priced at € 14, € 20 and € 29 at a mean value of € 20. This is the
measure of two trends of customer behaviour in the storefront.
1. Multiple items will not be purchased by the customers.
2. The shirts of low price will get majority of sales.
The items of higher cost margins have an opportunity to improve the positioning and marketing
efforts. Hence, by increasing the AOV online retailers manages to increase the overall ROI of
marketing efforts. The higher the mean value, more the customer will get an opportunity to
grab the product. This creates an opportunity to grab the money spent to avail the customers.
This parameter must be closely monitored as this provides the details of the business metric for
a particular market. Making new campaigns, session buying and cosmetic alterations are the
probable causes that affect the fluctuation of mean value.
10

Report for Duque PapetiersGros 2017
2.7 Customer Satisfaction
Several factors affect the customer satisfactions for a particular company. This is the prime
measure that how the company is fulfilling the needs and demand of the customers and how the
service quality is affecting them (Blut et al. 2015). One of the main considerations by the
companies who is making business in a new market is to fulfil the demands of the customers
and getting feedbacks from them. This process can be judged as the trial and error process for
the product and for the company. The feedbacks’ receiving from the customers helps to
improve product quality as well as the lucrative promotion. Every company must maintain a
customer feedbacks or customer care centre to receive the feedbacks regarding the product.
Those who make online retailing must consider the customers’ satisfaction as it is important to
attract more customer of their product. However, the companies have to communicate with
their reliable customers to aware about the pros and cons facing by them and important
suggestion to make the product more prominent (Gera et al. 2017).
Higher the satisfaction levels of the customers, more the profit for the company. In this
competitive market condition, customer satisfaction plays the most vital role to promote the
product and to increase the demand among the local people. This improves the customer-
company relationships that increase the goodwill for the company.
11