Germany’s stationery industry has been seen to be stationed ideally in the international market. The country is well known for its writing instruments and its artisan paper (Klehm, 2011). The stationery industry in Germany grew at a rate of 3.5% in 2014 and 2015 (GTAI, 2018). These statistics are based on the number of stationery products that the different companies in the country sold during this period. The nation was facing a downward trend in its sale for stationery products, but this has slowed significantly given the increased turnover rates. The sales in 2012 reduced by 5.8% and in 2013, the sales decreased by 1.3%. The nation’s all-time-high sales revenue was 13.96 billion euros in 2011 (Franze and Sim, 2016). The main reason for the decreased demand of the country’s stationery products is the digitalization which has been brought about by technological advancements (Federal Ministry of Economics and Technology, 2018). This study provides an analysis of the entire stationery industry as well as that of the operations of Duque Papetiers Gros in a bid to determine how the firm can optimize its processes.
2. Analysis of Issues for Duque Papetiers Gros
2.1 An Overview of the Wholesale Stationers Market in Germany
The country which has brought in the highest revenue for the different wholesale German stationers in the United States (Bürgel et al., 2018); (Energy.gov, 2018). Forecasts have stated that by the year 2024, the total supply of stationery products will be higher than two hundred and thirty-four billion dollars. The increase has been attributed to a rise in literacy, the growing business activities, demography that will favor this growth, and a rise in the total number of children who will go to school (Conlumino, 2015). Germany’s stationery business has also been fluctuating in size over the years, and more companies have been leaving the industry while others have been coming in every year (Statista, 2018). Figure 1 below shows the number of German firms that have been providing stationery products from 2002 to 2016. Incidentally, the graph shows that the number of companies providing stationery products decreased to 4989 in 2016, as compared to the 5200 firms in 2015 (Statista, 2018).
Figure 1
According to the Trade Association of Office Supplies, the industry brings in about fifteen billion euros every year (Paperworld, 2018). These statistics show that based on the nation’s population every one spends one hundred and eighty-two euros every year on stationery products. When compared to other European countries, Germany is in second place based on the amount of money that people spend on stationery products (Paperworld, 2018). Statistics further show that in 2016, about seventy percent of all the major stationery providers in the nation had increased their sales revenues (GTAI, 2018).
The growth of the market of the stationery products is due to the increased demand for primary and secondary learning institutions and the rise in the need for a skilled workforce (Conlumino, 2015). These trends have led to an increase in both home and corporate offices which have increased the demand for diaries, files, consumption markers, writing tools, and organizers.
Trends in the Industry
The stationery products which are made in Germany are globally renowned, and the nation has observed changing trends in this industry. First, the number of retailers who sell stationery products has increased significantly. There are numerous sellers of these products including supermarkets and hypermarkets (GTAI, 2018). Incidentally, two key pharmacy chains in the nation are selling stationery products. These firms have been seen to mainly provide the products for the mass market instead of selling to people who want premium or professional stationery products.
Second, the market is providing luxury writing instruments. The customers who are purchasing these instruments have been seen to be relatively small but they usually buy a large sales share. The main buyers are affluent and older Germans who are mostly above the age of retirement (Franze and Sim, 2016). Third, the industry is being faced by the pressure to be socially responsible (Franze and Sim, 2016). The sellers thus need to come up with strategies that will help them keep their customers and attract potential customers by applying environmentally friendly business practices.
Finally, various products in the industry are facing a decline in sales due to digitalization while others are facing increased levels of demand. Incidentally, document folders are recording decreased turnovers. On the other hand, office supplies and writing instruments had a growth rate of 5% in 2017 (Franze and Sim, 2016). Additionally, the high demand for particular stationery products has been attributed to the shift of people towards creative works. This trend has somewhat countered the factor of digitalization.
2.2 Annual Spending on Writing/Drawing Materials per Capita
The per capita spending for seven European nations is depicted in table 1 and figure 2 below. The country with the highest per capita spending is Switzerland while the one with the lowest per capita spending is Slovakia (Franze and Sim, 2016). The graph also shows that Germany has a much higher per capita spending on stationery items when compared to Italy, France, and Slovenia. These statistics show that on average, the people in Switzerland purchase the most stationery products followed by those in Germany. However, even though Switzerland’s per capital purchases of stationery products is higher than that of Germany, Germany’s population is about 82 million while that of Switzerland is approximately 8.42 million (The local, 2018); (Statista.com, 2018); Therefore, there are very many more people who purchase stationery products in Germany than Switzerland making Germany a better market for businesses in this industry.
country
spending per capita
Slovakia
£9.8
Italy
£18.6
Slovenia
£20.4
France
£28.3
Austria
£35
Germany
£35.2
Switzerland
£35.5
Table 1
Figure 2
2.3 Analysis of Duque Papetiers Gros’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
Total Sales
165000
182000
178000
Table 2
a. The use of a mixed pie chart to show the sales revenue of 2016 and 2017 by product item
The mixed pie charts for the total sales revenues for each product in 2016 and 2017 are depicted in the figures below.
Figure 3
Figure 4
b. Scatter diagram
Figure 5
Figure 5 above shows the scatter diagram of the total sales that Duque has recorded from 2015 to 2017. The scatter diagram shows that the company’s sales are increases annually in a linear manner. The gradient indicates that the rise in the period of running the business by one unit will increase the total revenue by €6500. The R2 indicates that the sales revenue can be predicted by the years by an accuracy of 53.48%.
Figure 6
By using the trend function in Ms. Excel, the projected sales revenue for 2018 will be €188,000, and that of 2019 will be €194,500 as depicted in the scatter diagram in figure 6. These results are based on the assumption that the existing trend will continue. The correlation in this scatter diagram for the sales revenue and the years is determined using the CORREL function in Excel, and it is equal to 0.7313. This value shows that a positive correlation exists between the years and the revenue. Therefore, as the years increase by one unit, the sales revenue will also increase by 73%. The R2 which is the coefficient of determination shows that the dependent variable (sales revenue) can be predicted by the independent variable (years) by 85% accuracy.
2.4 Feasibility of Expanding to Germany " International Standards
Business expansion to Germany and Belgium
Pros
Score/10
Cons
Score/10
The firm will have an increased market share
5
There are more competitors in the new markets
7
Its profit levels will increase
8
There could be increased employee turnover
4
The sales volume will also increase
7
Lower quality products
5
There will be increased levels of visibility for the company’s brand
9
Differences in cultures
4
The firm will not be highly vulnerable to the changing trends
7
The financial risks will increase significantly
4
Total Pros
36
Total Cons
24
Average Pros
7.2
Average Cons
4.8
Table 3
The average number of pros is much higher than that of the cons which means that the business should enter the German and Belgium markets.
For businesses to survive when operating in international markets, they need to comprehend the different international quality standards properly. The international organization of standards has to certify a firm for it to run legally and effectively. Additionally, certification by the international organization of standards enables firms to become well-known, and they are also able to increase their revenues since larger corporations prefer to work with them. Duque Papetiers Gros needs to ensure that it fulfills the conditions of the ISO ICS 85.080.
2.5 Costs of a New Building
a. The cost per month
The current present value of the mortgage is $200,000, and the rate is 10%. The amount that should be repaid is therefore calculated using the formula; Amount = (the principal * rate) ^ time. The total amount is hence equivalent to $3,489,880.5. The monthly payments will, therefore, be $9,694.1124 for 30 years.
b. Interest charged on a monthly basis
The payments per month, if the interest is now charged on a monthly basis, will require the use of the PMT function in Excel. The total amount that should be paid every month is, therefore, equal to $1,755.14.
2.6 Mean Value of Orders
The null hypothesis states that the average value is not equivalent to 240, while the alternative hypothesis states that it is equivalent to 240.
H0: mean ≠ 240
H1: mean = 240
In this case, the Z test will be used. To get the calculated Z value, the formula used is (sample mean – the value provided) / standard error. With a 5% significance level, this means that the value of alpha is 0.05. The standard deviation has already been provided as 43. Therefore, this test has a 5% chance of the null hypothesis being rejected. The analysis requires one to calculate the Z value and then use the Z-tables to determine the computed value of Z, and then compare the two.
The Z-value from the tables is -1.645. The calculated Z, on the other hand, is -0.2326. It is vital to compare these two values to determine whether the null hypothesis will be rejected or not. If the calculated Z value is higher than that of the computed Z, the null hypothesis is rejected. In this case, the value of the calculated Z is higher than that of the computed Z which means that the null hypothesis should be rejected. Therefore, the mean ≠ 240.
2.7 Customer Satisfaction
The company has been receiving disappointing results from its questionnaires for various reasons. First, the company did not provide an introduction thanking the respondents for taking the time to fill out the questionnaires, and it also did not inform them the reasons for issuing them. Telling its target respondents why they are filling out the questionnaires is a critical step since it would have motivated the respondents to fill them in accurately by knowing the benefits that their efforts would bring.
Second, the questionnaires were sent by email, and they were also sent during the December period which is the holiday season. Sending them by email was not a good strategy since the respondents could have easily ignored the email. Moreover, if the people did not correctly comprehend a particular question, they did not have someone to help them immediately. Additionally, sending the questionnaires during the holiday season undermined their effectiveness since people are extremely busy during this period or they may be relaxing. They may, therefore, fill in the questionnaires hurriedly or not fill them at all.
Third, the final question contained in the questionnaire is open-ended, and there isn’t enough space for the respondents to provide their answers. Since the question requires the respondents to offer suggestions on how the company can improve its products and services to increase customer satisfaction levels, the respondents may lack the space to list all the recommendations that they may have.
The questions provided in the questionnaire are also not organized in the right manner. Ideally, questions need to be arranged from the general ones to those which are specific. These questions are however not logically organized. The questionnaire also contains questions that mostly focus on how the company can increase its revenue instead of finding a balance between business development and customer satisfaction. They should, therefore, have provided more questions aimed at determining how the firm can improve its customer services. Finally, the questionnaire has no ending where it thanks its respondents for their participation.
Descriptive statistics for the four variables.
ID
CUST_SERV
QUAL_P"S
SALES_STAFF
PRICE_VALUE
1
3
3
3
3
2
3
3
3
2
3
4
4
4
2
4
4
3
4
1
5
2
3
2
2
6
4
4
4
2
7
4
3
4
2
8
4
3
4
2
9
2
3
2
2
10
4
3
4
1
11
4
3
4
2
12
4
3
4
2
13
4
3
4
2
14
4
3
4
1
15
2
3
2
2
16
4
3
4
2
17
4
4
4
2
18
3
3
3
3
19
4
3
4
2
20
3
3
2
2
The Mean values
3.5
3.15
3.45
1.95
Standard deviation
0.760886
0.366348
0.825578
0.510418
Table 4
The mean values of the different variables and their standard deviations are depicted in the table. The mean values for the customer services, product, and services quality and the sales staff variables are above two which show the firm is performing well in these areas. However, the mean of the price value is 1.95 which is the lowest value, and it shows that the firm needs to change its pricing mechanisms. On the other hand, the standard deviations of the responses provided for sales staff and customer services are the highest which mean that many people provided different answers in these areas. The variable with the lowest standard deviation is product and service quality which shows that many people agree with it.
3. Conclusions
In conclusion, it is evident that the analysis of Duque Papetiers Gros was done thoroughly by analyzing both its internal elements and looking at the industry as a whole. The study was also done extensively by using both secondary data and interpreting the results of the questionnaires provided to different respondents. The results thus provide the complete picture of Germany as a stable market and show that Duque can benefit significantly by expanding to take advantage of the huge demand in the country. The firm also needs to remain updated on the different emerging trends in the industry and based on the primary research it should maintain its product and service quality but appraise its pricing strategies since many people are not thoroughly okay with them.
4. References
Bürgel, O., Fier, A., Licht, G. and Murray, G. (2018). Timing of International Market Entry of UK and German High-Tech Start-Ups. Centre for European Economic Research, 1(51).
Conlumino (2015). Books, News and Stationery Retailing in Germany – Market Summary " Forecasts Comprehensive overview of the market, consumer, and competitive context, with retail sales value and forecasts to 2019. Conlumino, 1(2015).
Energy.gov (2018). 2016 BILLION-TON REPORT Advancing Domestic Resources for a Thriving Bioeconomy. [online] Energy.gov. Available at: https://www.energy.gov/sites/prod/files/2016/08/f33/BillionTon_Report_2016_8.18.2016.pdf [Accessed 13 Dec. 2018].
Federal Ministry of Economics and Technology (2018). In focus: Germany as a competitive industrial nation Building on strengths – Overcoming weaknesses – Securing the future. General Economic Policy, Industrial Policy.
Franze, S. and Sim, C. (2016). MGCC perspectives; Developments, Trends, and Potentials in The Stationery Market – Malaysia and Germany. The Business Magazine of the Malaysian-German Chamber of Commerce and Industry.
GTAI (2018). Economic overview Germany; market, productivity, innovation. [online] Gtai.de. Available at: https://www.gtai.de/GTAI/Content/EN/Invest/_SharedDocs/Downloads/GTAI/Brochures/Germany/economic-overview-germany-market-productivity-innovation-en.pdf?v=10 [Accessed 13 Dec. 2018].
Klehm, J. (2011). Entering the German Market. Valkeakoski Degree Programme in International Business Global Marketing, [online] 1(2011). Available at: https://www.theseus.fi/bitstream/handle/10024/33216/Klehm_Janine_2011.pdf [Accessed 13 Dec. 2018].
Paperworld (2018). Office Supplies Industry Association (PBS INDUSTRIE) - Paperworld Middle East 2018 – German Pavilion. [online] Paperworldme.german-pavilion.com. Available at: https://paperworldme.german-pavilion.com/content/en/general_information/contacts.php?contact_id=16083 [Accessed 13 Dec. 2018].
Statista (2018). Number of Office and stationery retailers in Germany 2016; Statistic. [online] Statista. Available at: https://www.statista.com/statistics/500176/office-and-stationery-retailers-germany/ [Accessed 13 Dec. 2018].
Statista.com (2018). Switzerland - total population 2012-2022 | Statistic. [online] Statista. Available at: https://www.statista.com/statistics/263752/total-population-of-switzerland/ [Accessed 13 Dec. 2018].
The local (2018). German population has grown by two million since 2015 due to immigration. [online] Thelocal.de. Available at: https://www.thelocal.de/20180313/german-population-has-grown-by-two-million-since-2015-due-to-immigration [Accessed 13 Dec. 2018].
5. Appendices
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
Total Sales
=SUM(B2:B8)
=SUM(C2:C8)
=SUM(D2:D8)
