Duque Papetiers Gros is a small firm owned by Donald Duque that specializes in the distribution of stationery products in Northern France. The company deals with the wholesale of stationery items. The owner of Duque Papetiers Gros, Donald Duque, lacks business analytics to enable him to understand the importance of complementing business data with decision making. In this paper, an analysis will be carried out on data related to the company’s sales and per capita spending when it comes to stationery products in other countries to determine whether it is possible for the firm to expand into other European markets.
2. Analysis of Issues for Duque Papetiers Gros
2.1 An Overview of the Wholesale Stationers Market in Germany
In Germany, revenue generated from wholesale stationery products amounts to more than 15 billion euros in a year. In 2015, a notable growth of 3.5% was seen in the stationery industry total revenue; this was due to an increase in the consumer demand which grew by 2.5% and a 5% increase in the consumer demand abroad. Each year in Germany 182 euros constitutes the per capita spending concerning stationery products. On drawing and writing stationery products 35 euros are spent by Germans annually which ranks the country second in the European Union in terms of stationery products expenditure. Contrasting changes and developments have marked the wholesale stationery market trends in Germany; for example, there is a decline in turnover sales of paper products such as document folders, primarily attributed to the rise of digital devices that have reduced the need for writing on paper. Categories of stationery, for example, office supplies, pencils and pens have experienced growth. When it comes to net revenue, almost 50% of the wholesalers have at minimum 500, 000 euros which justify their success. Majority of the wholesalers sell their products directly to the consumers, other use business to business channels. A lot of German wholesalers also use E-commerce websites to sell their products. Mergers and barriers to entry have led to a constant number of stationery wholesalers in Germany. In the European Union, Germany is the most significant exporter when it comes to stationery products; it accounted for more than 19.5% sales in 2017 (Schmidt, 2016, p. 8)
2.2 Annual Spending on Writing/Drawing Materials per Capita
There are various indicators of a thriving industry in a country such as per capita spending. Therefore, the expenditure on drawing and writing products is one of the critical elements which that determines the viability and profitability in the wholesale stationery business. The per capita spending can also be used to determine the European Union markets that Donald Duque should enter first. The customer’s total expense linked to drawing and writing material amounts to 35.2 Euros. Such a conclusion was led by Countries such as Cyprus, Denmark, Belgium, Austria and Bulgaria (Sungau, 2015, p. 142) Germany was the second position while France was fourth. Supermarkets collecting the products is a common occurrence since they constitute the top distributors in the country. Customer awareness is a critical issue which leads to sales promotion, positively affecting the purchasing decision of the buyer Advertising the products continually has had a positive impact leading to an increase in buyers.
The graph provides information about individual spending on drawing and writing products in 12 European Union markets. In countries such as Austria, Germany and Switzerland, per capita spending on drawing and writing products was over 35 euros. In Slovakia and Spain, the expense was under 10 euros. In France, the per capita spending on the materials was 28.3 euros. The figures offer critical insights into which markets Duque Papetiers Gros should first penetrate. Since individual spending on drawing and writing material in Germany, Switzerland and Austria is above 35 euros, it is sensible, for the company to consider expanding to these markets before it grows to other countries.
2.3 Analysis of Duque’s last three financial years of sales data (2015-2017)
Products
2015
2016
2017
Printer cartridges
25000
26000
22000
Low cost printers
15000
18000
18000
General Office supplies
25000
27000
23000
Office furniture
25000
25000
27000
Shredders
25000
29000
29000
Paper based supplies
25000
27000
27000
Drawing/ writing material
25000
30000
32000
Sales by year
165000
182000
178000
Total sales
525000
Products
2015
2016
2017
Total sales by products
Printer cartridges
25000
26000
22000
73000
Low cost printers
15000
18000
18000
51000
General Office supplies
25000
27000
23000
75000
Office furniture
25000
25000
27000
77000
Shredders
25000
29000
29000
83000
Paper based supplies
25000
27000
27000
79000
Drawing/ writing material
25000
30000
32000
87000
Sales by year
165000
182000
178000
525000
Total sales
525000
Correlation by year
0.911966649
0.975623028
0.918781746
The company’s operations in the last three years are valuable in explaining the company’s future direction in the global market. It is, however, essential to understand that various factors are involved when it comes to the creation of the required goals. In the year 2015 and 2016, the sales made by the company on printer cartridges were positive, the company made profit. However, in 2017 a loss was recorded. Sales accrued from the general office supplies are critical since they require broader understanding. A notable advantage was made in the first two years while a loss was incurred in the last. Examining the cost of printers that are low cost showcases a stable profit made by the company during the year. Office furniture sales are positive since the company recorded no loss and in 2017 there was an increase in sales (Sungau, 2015, p. 157).The price of shredders was steady over the years since it remained constant after the initiation sales were made that is a critical practice of Duque Papetiers Gros due to the high number of complications from the story. While creating a steady income, it is crucial to understand that various difficulties are involved. Paper-based supplies sales were also stable since the company recorded positive incomes in the previous three years. The drawing materials sales were favourable due to the maintenance of the increasing and positive sales in the past three years.2.4 Feasibility of Expanding to Germany " International Standards
Pros
Score/10
Cons
Score/10
More sales
9
Regulatory problems
10
Bigger individual spending (over €35)
8
Cut-throat competition
9
Raising brand awareness
5
Problems with business registration
4
Selling online
5
Investment to expand
8
Learning about the new market
3
Learning new language
4
New products for a new audience
3
Adapting to new business culture
4
Total Pros
6
Total Cons
6
Average Pros
6
Average Cons
6.6
The German market is the preferred place in which the company should expand its operations concerning the actual profit which would be derived from Duque Papetiers Gros operating within the country’s economy. In the country, there exists a ready demand for stationery products. Germans can afford the products due to their economic status.
Expanding to Germany and other European Union markets will cause Duque Papetiers Gros to be the subject of more standards and regulations. The essential standards that the company is required to comply with include the ISO regulations. The following are the presented ISO regulations and how they can be applied to the products of Duque Papetiers Gros. Unlike other product categories for example electronics, products such as drawing and writing instruments are not subject to stringent standards; the owner can, therefore, ensure compliance with the ISO regulations by spending less time or energy. ISO 12756:2016 sets down the applicable terms in the writing instruments production such as gel ink pens and ballpoint pens. ISO 9180:1988, on the other hand, offers multiple standards when it comes to wood-cased pencils that are wholesaled by Duque Papetiers Gros. The ISO regulations and measures that can be applied to Duque Papetiers Gros are however not limited to the mentioned two standards since there exist various ISO standards when it comes to stationery products. Hence before the expansion, Duque Papetiers Gros is required to consider the implications of complying with the different ISO regulations, having systems in place that will ensure that products exported to Germany abide by the existing standards and regulations (Kau, 2014, p. 563)
2.5 Costs of a New Building
Facts
Numbers
Time
30 years
Total loan amount= Loan reimbursement
=
21215.85 euros
Monthly reimbursement
21215.85 / 12
=1767.98
Facts
Numbers
Time
30 years * 12 months =360
Monthly interest rates
10% / 12 = 0.00833
Monthly reimbursement
The company will incur a monthly cost of about 1700 euros which will be paid on a regular basis. Using mortgages is a beneficial way since there are limited options to be used when coming up with a way in which the building cost can be met adequately. The method is advantageous since the cost involved in paying to build high. The consideration of the factors is favourable since there are limited options associated with developing an accurate production line which is reliable on several issues involving saving up the cost which the company will incur in constructing a new building. In an ideal situation, multiple factors apply when it comes to the application of the building since it works based on the minimisation of the costs that exist involving property management and other factors that require a particular line of understanding. The success of Duque Papetiers Gros in acquiring the property is dependent on the ability of the company to blend in with the sceptics that exist, making the critical investment decisions required to propel the company to succeed in expanding to other countries. Hence 1700 euros a month is the preferred option which the business can apply in such a scenario.
Examining the cost paid monthly works for the advantage of the business as well as the mortgage owner since minimal costs are applicable in long-time payment for a property in the country. It is essential to understand that monthly payment has more advantages in comparison to the annual fee. The company is able to cater to building costs regularly in comparison to using monthly charges that appear to be more expensive compared o other payment modes in the country.
Mean Value of Orders
Facts
Results
The entire population’s mean
240
Sample average
230
Standard Deviation
43
Value of the z score
(240-230)/ 43
=10/43
0.23
The results showcase that the p-value of Z gives 0.23 accounting for 0.59. The emergence concludes that P values are higher than the 0.5 standard limit. The account which is forecasted to provide an assessment has positive feedback.
By applying the method, Donald gets the statistical figures that are required which can provide a specified estimate for the required period. The technique application is effectual since it is useful in the calculation of actual figures which are thought of as realistic. Mean value calculation explains clearly the number of sales made by the company annually and on a monthly basis that is important. Using the mean facilitates the realistic line creation of understanding based on the figure that is realistic applied when the company operates within. Using the evidence is enough since it offers a practical means of effectively tackling the issue which will lead to the realistic line creation advantageous for the organization’s set up in the industrial domain. The company’s current position will, therefore, be based on it since it can utilize the existing set of figures and develop a practical way in which the calculations can be made (Hullgren, 2016, p. 657).The estimates would enable the owner to understand that despite the orders the mean would remain the same regarding the complications involved in creating calculations that are realistic which can address the issue substantively beneficial for the company.
Customer Satisfaction
Mean scores and standard deviations of each component offer essential insights on how consumers view Duque Papetiers Gros products. Price value mean scores were the lowest at 1.95 suggesting that consumers did not consider the company’s products as having the correct value for their price. Using the data, Donald can use a different pricing strategy, or work on the products quality in case he intends to use a price differentiation strategy. Customer service mean scores were 3,5 which was very high, demonstrating that customers considered the products very satisfying.
In order to improve the response rates, Donald should adopt the following tips. The format of the questionnaire needs to be simplified with the aim of ensuring that more customers respond to them. Simplicity is an essential factor in ensuring that more people respond to the factors, the element is a very critical determinant of whether people respond to questionnaires. For example, the questionnaires third question is very complicated with most of the consumers avoiding such questions (Michaelidou, 2006, p. 293). Overlaps exist in the first and second question, since its options are between three and six months, within last month, between one to 3 months and six months to 1 year. Such overlapping areas get customers perplexed. Changes should, therefore, be made in the current questionnaire to mitigate overlapping areas. Remembering other events can be challenging for some customers. Donald should consequently avoid any questions that require consumers to remember events of the number of times that they have been in the store.
Conclusion
In this part, an analysis of the findings will be made, stating the conclusions that Donald should take for his company. The most viable markets for the company are Switzerland, Austria and Germany; this is because the individual spending on drawing and writing materials is more significant compared to France. Various expansion problems exist such as competition. However, if Donald can be able to penetrate the market, cultivating a brand image that is reputable, then he will be able to gain market share in Switzerland and Germany. If Donald intends to expand, he is required to comply with ISO regulations. The sales of the company are projected to go through a steady increase in France to reach 195000 euros in 2019 if it maintains its current trends.
References
Hullgren, M. a. I.-L. S., 2016. Borrower characteristics and mortgage rate choice in Sweden. International Journal of Bank Marketing , 34(5), pp. 649-669..
Kau, J. B. D. C. K. a. C. L., 2014. First Mortgages, Second Mortgages, and Their Default.. The Journal of Real Estate Finance and Economics , 48(4), pp. 561-588..
Michaelidou, N. a. S. D., 2006. Using email questionnaires for research: Good practice in tackling non-response. Journal of Targeting, Measurement and Analysis for Marketing , 14(4), pp. 289-296..
Schmidt, T., 2016. Germany – A Potential Stationery Market. MGCC perspectives , p. 8.
Sungau, J. J. a. P. C. N., 2015. Business process re-engineering: a panacea for reducing operational cost in service organizations. Independent Journal of Management " Production, 1(6), pp. 141-168..
Appendix
Products
2015
2016
2017
Total sales by products
Printer cartridges
25000
26000
22000
73000
Low cost printers
15000
18000
18000
51000
General Office supplies
25000
27000
23000
75000
Office furniture
25000
25000
27000
77000
Shredders
25000
29000
29000
83000
Paper based supplies
25000
27000
27000
79000
Drawing/ writing material
25000
30000
32000
87000
Sales by year
165000
182000
178000
525000
Total sales
525000
Correlation by year
0.911966649
0.975623028
0.918781746
