Hometown Corporation (B): Expansion Plan

 This is an original MFMI resource

Author: Masilungan, Eulogio; Eclarin, Dennis; Morato, Eduardo
Publication Date: 2005
Publisher / Source: Asian Institute of Management
Length: 16 Pages
File Type: PDF
Language: English
Country: Philippines
Topics: Innovation, Marketing/Demand, Operations Management
Keywords:

Notes:

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Abstract

Home Town was a lending company established in 1998 by the husband and wife team of Captain Dennis and Jing Eclarin. The company?s first branch operations was in Isabela City. It served three segments, namely: microentrepreneurs; tricycle drivers; and employee entrepreneurs. The company competed directly with the mobile, informal, moneylenders who dominated the Philippine microfinance chain. In 2001, Captain Eclarin decided that the time was ripe to expand Home Town?s operations in Cauayan City. He thought that the expansion would test the replicability of the Home Town system in another area with a similar profile as Santiago City. If this became successful, Home Town intended to go nationwide. Home Town also wanted to expand for entrepreneurial reasons. Captain Eclarin wished to take advantage of the opportunities offered by the rapidly progressing market of Cauayan City. To prepare for his planned venture, Captain Eclarin conducted an environmental study of the Cauayan City market. His study established that Home Town?s potential clients (micro-entrepreneurs, tricycle drivers, employee entrepreneurs, and residents of nearby towns) were generally regular borrowers, wanted low interest rates and fast processing of loans, accessed multiple loan sources, and wanted to save in a trustworthy institution which had bank-like services. He also found out that the major loan providers in Cauayan City were the Bombays, cooperative and rural banks, and lending investors. As Captain Eclarin finished studying the Cauayan City environment he was mulling over the potentials of the area and how he could tap these. A lot of questions were in his mind. Is penetrating the Cauayan City market feasible given its characteristics? What are the possible threats to my business and who are my competitors? How should I position my business in Cauayan City? Who should be my target market? How should I cater to my potential customers? What changes should I make in the way I conducted my business? How should I finance the Cauayan City venture?