Case Study Example: Analysis of Duque Papetiers Gros

Task 1

Overview of The Wholesale Stationers Market in Germany

Germanys stationery brands have a good reputation both domestically and internationally. These brands have even been able to gain substantial market shares against different private labels. It was established by the Trade Association for office supply, and writing materials that the revenue brought in by the stationery industry are at least fourteen billion and eight million annually (Statistica, 2017a). Germany is ranked second when compared to other countries in the European Union regarding its expenditure for stationery.

Since the year 2015, at least seventy percent of all the German companies selling stationery experienced increased sales. Between 2014 and 2015, the sales growth rate was determined to be approximately 3.5%. This was attributed to a rise in domestic and foreign demand by 2.5% and 5% respectively(Statistica, 2017b).

The stationery industry has many products which bring in diverse challenges and which have different developments. Paper products have experienced decreased sales levels over the years. In contrast, other products such as writing instruments and office supplies experienced a growth in sales level. HBS has said that this trend is expected to go on into the future(Statistica, 2017b).

Another trend being experienced in this industry is the decline in the number of wholesalers. This has occurred mainly due to mergers that are occurring as well as due to different companies leaving the market. Many wholesalers are also choosing to sell their stationery products directly to their consumers without involving intermediaries in a bid to widen the reach of their businesses. The HBS also discovered that brand boutiques in Germany have become very successful in the sale of premium products (Franze & Sim, 2016).

Another trend being experienced is that the products are so easy to sell and display that many retailers have come in. Incidentally, two leading pharmacy chains in Germany are now selling and increasing the range of stationery products in their stores. Many hypermarkets and supermarkets are also now selling stationery products. These stores are however mainly targeting people who purchase mass-market products as opposed to those looking for premium or professional products (Franze & Sim, 2016). Many specialist retailers are also diversifying their products to provide their customers with a wide variety of products to choose from.

Another trend which is leading to the hindrance of the exponential growth of Germanys stationery market is the low birth rates recorded in the country. The final trend that has been seen in the stationery industry is the growth of e-commerce. Businesses that operate on online platforms have been seen to grow rapidly, and they currently hold a market share higher than 17%.

Task 2

The per capita annual spending shows the average amount of money each person spends in the purchase of stationery products. The table below shows the per capita income on stationery products in seven European countries namely; Germany, Austria, France, Italy, Slovakia, Poland, Croatia(Franze & Sim, 2016). 

country per capita expenditure ()

Germany 35.2

Austria 35

France 28.3

Italy 18.6

Slovakia 9.8

Poland 8.5

Croatia 7.9

Table 1

A graphical representation of the per capita income on the seven European countries in stationery products is shown below;

 Figure 1

The graph shows that the country that recorded the highest per capita income in the stationery business is Germany with 35.2. This shows that this is a viable market for Duque to get into and with proper product positioning and the right branding, the company will be able to record high sales revenues.

Task 3

The table below shows the addition of a total sales row to get the annual revenue from the sale of the different stationery products. 

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

The total sales revenue for both year 2016 and 2017 are shown below in tabular form. 

Product item 2016 Sales () 2017 Sales () total sales ()

printer cartridges 26000 22000 48000

general office supplies 27000 23000 50000

low-cost printers 18000 18000 36000

office furniture 25000 27000 52000

shredders 29000 29000 58000

paper-based supplies 27000 27000 54000

writing/drawing materials 30000 32000 62000

Table 3

These sales revenue for years 2016 and 2017 per product is represented in the form of a mixed pie chart as shown below.

Figure 2

The total sales by year are shown below in tabular form. 

years Total sales

2015 165,000

2016 182,000

2017 178,000

Table 4

The total annual sales are also shown below in the form of a scatter diagram.

Figure 3

The correlation coefficient measures the direction and strength of two different variables. This value is usually between negative one and positive one. If it is a negative one, this means that the dependent and independent variables are perfectly negatively correlated

This, meaning that when one variable increases, the other one decreases to the same extent and vice versa. Conversely, if the correlation coefficient is equal to positive one, this means that the two variables are perfectly positively correlated.This means that as one variable increases, the other variable also increases in the same way and in the same degree and vice versa. However, if the correlation coefficient is zero, this means that there is no correlation between the two variables which means any change in one variable has no impact on the other variable.

The correlation coefficient is 0.731307. This correlation coefficient shows that the total sales have a strong positive correlation with the years. This means that there exists a strong linear relationship between the variables.This, therefore, shows that as the years progress the revenue will also keep on increasing.

Assuming that the sales trends persist, the total sales for the years 2018 and 2019 can be forecasted. This can be determined by use of the forecast function.This shows that the forecasted sales values for the years 2018 and 2019 are 188,000 and 194,500 respectively.

Task 4

Pros and Cons of Expansion of Duques Operations into Germany.

Pros Score/10

Cons Score/10

The companys market will expand therefore resulting in higher sales revenue. 3 The existence of cultural differences. 2

Increased visibility of the companys brand. 3 The financial risk in case the business fails to pick up. 3

The competition levels have a high probability of decreasing in foreign markets. 2 Timing issues would come up due to the geographical differences of the business. 2

The business will be less vulnerable to changing trends. 2 Local politics could pose a threat to the company. 1

There could be enormous costs incurred in the process of market research. 2

Total 10 Total 10

Table 5

International Standards that Relate to Duques Operations.

One international standard that applies to Duque is the ISO 9000 on quality management. This standard applies to all organizations regardless of the industry they are in(ISO, 2017). It is based on a strong focus on the customers needs, the process approach, influence of top management and expects certified organizations to keep improving their operations.

Another international standard is the ISO 14000 which deals with the management of the environment. This ensures that organizations do not pollute the environment or deplete natural resources. The ISO 26000 standard that deals with social responsibility are another standard that Duque should adhere to. This requires organizations to have a good relationship with the environment in which they carry out their operations. This standard provides guidelines on how organizations can operate in a manner that is socially responsible(NBEA, 2017). In this regard, businesses are expected to be transparent and ethical in their activities and contribute to the societys welfare.

Duque is also supposed to follow the ISO37001 standard which concerns anti-bribery management systems(ISO, 2017). This is a standard that was developed by the ISO in a bid to assist organizations in fighting bribery and to establish a culture of ethics in their operations.

The final standard that Duque should follow is the ISO-45001. This standard deals with occupational health and safety. It aims to reduce occupational diseases and injuries by providing organizations with a framework aimed at improving safety for employees and reduce risks in the pace of work(ISO, 2017). By using this standard, Duque will bring about safe and better employee working conditions.

Task 5

The monthly cost of a 30-year repayment mortgage of 200,000 with a rate of 10% p.a. the monthly payments will be equal to 628.08.

The monthly payment for the loan when the interest is charged on a monthly basis is calculated using the Ms. Excel PMT function. The monthly amount is equal to 1755.14.

Task 6

The null hypothesis is: mean = 240

The alternative hypothesis is: mean 240

The Z test is used in this computation because the sample size is equal to 50.

Z = (sample mean value being tested)/ standard error

Z = (230 240) / 43 = -0.2326

The computed Z value from the Z tables is -1.645

The calculated Z is greater than the computed Z; -0.2326 > -1.645. Therefore, we reject the null hypothesis and conclude that the mean is not equal to 240.

Task 7

Advice for Duque regarding the Questionnaires.

Five out of seven questions in the questionnaire make use of the Likert scale. This creates a sense of monotony to the people answering the questionnaires and the values provided may not be a true reflection of the way the people feel. This is because some of the answers to the questions may be hard to quantify.

The questions are also not arranged properly and logically. The questions should move from general to more specific questions, but the order in which the company presents them is not suitable.Moreover, the questionnaire makes use of only seven questions which are very few and will therefore not provide sufficient information needed for adequate planning.

The questions are also mainly targeted towards how the business can be able to increase its revenues as opposed to how the products can better serve the customers needs. Therefore, people may not see a significant advantage that they can derive from filling in the questionnaires. Finally, the last question is open-ended which means that people may provide suggestions that are very different therefore making it impossible to satisfy all their opinions. In...