Donald Duque owns a small family stationery business in Northern France. By his own admission, Donald “knows next to nothing about business data analysis and how it affects small business” but he does realise that he needs to use analysis as an aid to better decision making.
You are a student at the University of Roehampton who has obtained a summer placement with Duque Papetiers Gros. You are keen to do well in this placement as it could lead to a permanent post at the end of your degree course.
Duque do not sell stationery items directly to the public. The business has built a customer base over more than fifty years, comprising wholesale trade with other businesses in Northern France. Currently, Duque does not sell across the French border.
The customer base can be categorised into small shops, local schools and small offices.
The product base can be categorised into printer cartridges, general office supplies, low-cost printers, office furniture, shredders, paper-based supplies and writing/drawing materials. Currently, Duque does not sell computers.
Although there are other wholesale stationers in Northern France, Duque has established itself as a trustworthy, reliable and prompt supplier. Any product that is not in stock can normally be obtained and supplied within 48 hours of the order being placed. Furthermore, Donald is well known as a businessman who gives generously to local charities in the region, particularly those relating to primary schools.
Donald would specifically like to understand better the annual spending on writing/drawing materials per capita in European countries and potential areas of expansion for his France-based business into neighbouring countries, including Germany.
You have been set a number of tasks which should be presented in report format (word length 2000 excluding graphs/figures/references) and written in English for the management of Duque. These tasks are detailed in the following pages and generally concern:
• Summary information
• Product information
• Customer information
• Recommendations for expansion
• Financial Information
Using relevant sources of information, you have been asked to write an overview of the wholesale stationers market in Germany, including in your discussion a brief explanation of trends in this area. In researching the topic, you have identified a good reference (MGCC Perspectives – A Chamber of Commerce magazine, pp. 7-8, which is available in Moodle). Prepare your overview and include a list of additional references in Harvard style (including the MGCC reference) at the end of your report. Note that you should not copy verbatim the overview and trends contained in MGCC, 2016 report (10 marks)
Using an EXCEL spreadsheet, produce an appropriate graph to represent annual spending on writing/drawing materials per capita in precisely seven European countries in 2015, two of which should be France and Germany. You can use some of the data for twelve countries shown in MGCC, 2016, p. 8. (10 marks)
Having gained a better understanding of the wholesale stationery market in Europe, you decide to start analysing Duque’s last three financial years of sales data (2015-2017). Although incomplete, the sales data (see figure T3) does provide some basic data including sales (€) of printer cartridges, general office supplies, low-cost printers, office furniture, shredders, paper-based supplies and writing/drawing materials.
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 T3. Product item sales by Year (2015 to 2017, inclusively).
a) Using an EXCEL spreadsheet, adjust the above table by appending a Total Sales (€) row. Include a table printout or screenshot as an appendix to your report. You must also show in your appendix, the formulae behind your columns. (5 marks)
b) Using an appropriate mixed pie chart, represent the 2016 and 2017 sales (€) by product item. (5 marks)
c) By representing Total Sales (€) and Year in an appropriate scatter diagram, find the associated correlation coefficient and write down your resulting interpretation. (5 marks)
d) Using the same scatter diagram, forecast the total sales for 2018 and 2019, assuming continuing sales trends. (5 marks)
(Task 3 total: 20 marks)
Currently, all of Duque’s operations are carried out in Northern France. The business has never operated across the border in Germany. In order to initially answer Donald’s question “Should I expand my business to Germany”, you have decided to use a ‘pros and cons method’ table (see figure T4).
Should I expand my business to Belgium & Germany?
Pros Score/10 Cons Score/10
Total Pros Total Cons
Average Pros Average Cons
Figure T4. A ‘pros and cons method’ table for expanding to Germany & Belgium.
a) Complete the table. (10 marks)
b) Many of the business activities carried out by European companies need to comply with international standards. Research and list a few of the international standards that apply to Duque’s activities. You can use information contained at www.iso.org. (5 marks)
(Task 4 total: 15 marks)
If Donald does decide to expand, he knows that the extended internal operations will require improved facilities and, as it happens, a highly-suitable building is available for sale nearby. He always has been averse to interest-only mortgages and would only realistically consider a repayment mortgage. Also, he thinks that the asking price of €220,000 might be negotiable closer to €200,000.
a) Calculate the monthly cost of a 30-year repayment mortgage of £200,000, where interest is applied to the loan outstanding at the beginning of each year and the mortgage rate is 10% per annum. (5 marks)
b) Re-calculate the monthly cost assuming that the interest is applied to the loan every month (12 times a year. Hint. Use APR in the place of r). (5 marks)
(Task 5 total: 10 marks)
Donald believes that the mean value of orders received by his firm is about €240. Since his accounts office receives hundreds of orders each month, there is insufficient time to check every one. The accounts office decides on a strategy of randomly selecting a sample of 50 accounts and finds a sample mean of €230 and sample standard deviation of €43. Does this evidence support his belief? Assume a 5% significance level. (10 marks)