The Laguna Small and Medium Enterprise Service Center: a Case Study of a Nonprofit Supplier of Information and Communications Services in the Philippines
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The Laguna Small and Medium Enterprise Service Center: A Case Study of a Nonprofit Supplier of Information and Communications Services in the Philippines The Laguna Small and Medium Enterprise Service Center: A Case Study of a Nonprofit Supplier of Information and Communications Services in the Philippines by Ronald T. Chua with Contributions by Alexandra Overy Miehlbradt Development Alternatives, Inc. June 1999 This work was supported by the U.S. Agency for International Development, Bureau for Global Programs, Center for Economic Growth and Agricultural Development, Office of Microenterprise Development, through funding to the Microenterprise Best Practices (MBP) Project, contract number PCE-0406-C-00-96-6004-00. Ronald T. Chua is a professor of the Asian Institute of Management (AIM), an international graduate management school based in Manila, Philippines. Prof. Chua teaches entrepreneurship in AIM’s Master in Business Management Degree Program. He also offers various courses in microfinance and social entrepreneurship. Building on his field-based research, he regularly conducts public courses in microfinance for practitioners. He leads the Philippine training team under the Consultative Group to Assist the Poorest's (CGAP) Asian microfinance capability building initiative. Prof. Chua's research includes work on Philippine microenterprises, microfinance institution performance, and impact. He is co-author of “Transaction Costs of Lending to the Poor,” published by the Foundation for Development Cooperation in Australia. He has conducted studies for the Asian Development Bank, Australian Agency for International Development, the International Labour Organization, and the German Agency for Technical Cooperation. Prof. Chua has provided consultancy in post-employment entrepreneurship development programs for big private corporations undergoing organizational restructuring in the Philippines. Alexandra Overy Miehlbradt is a consultant in microenterprise development currently based in Colombo, Sri Lanka. She has over five years of field-based experience in the design, management, technical development and evaluation of business development services programs for microentrepreneurs, principally in South East Asia. Prior to becoming a consultant she spent four years with Save the Children as a technical advisor based in the Philippines. In this role, she helped the organization develop its global BDS strategy focused on women microentrepreneurs. Ms. Miehlbradt has a Master’s Degree in Public Policy from the Kennedy School at Harvard University, a B.S. in Management from the Wharton School of Business and a B.A. in International Development from the University of Pennsylvania. i ACKNOWLEDGMENTS The authors of this series of reports would like to extend many thanks to Marshall Bear for his work, guidance, and encouragement throughout the conception, implementation, analysis, writing, and editing of the study. Together with Clifton Barton, Mr. Bear was the driving force behind the study and helped us every step of the way. The authors also owe a debt of gratitude to Dr. Ned Roberto from the Asian Institute of Management, the marketing specialist for the study, who guided the marketing research aspects of the study from start to finish. Thanks also are due to AV Research, which carried out the survey and tabulation for its work and patience during the many phases of the survey. Acknowledgments are due to Manolita Gonzales, Luzviminda Villanueva, and Maurino Bolante who provided research assistance for the Laguna SeCen and Internet models case studies. The authors are also very grateful to all the representatives from MSEs who gave their time to answer the survey questionnaires. Thanks to the managers and staff of the RCPI/Bayantel Public Calling Office in Southern Mindanao for their time and help with the survey. Particular thanks are also due to the RCPI/Bayantel national management of the PCOs for agreeing to serve as a case study and for its support of the information gathering. Thanks to the management and staff of the Laguna Small and Medium Enterprise Service Center, the leadership of the Laguna Chamber of Commerce and Industry, the heads of the Chamber sectoral associations, and SwissContact for their time and help in the Laguna SeCen case study. Thanks to the management of ASSIST, the Philippine Chamber of Commerce and Industry, the Philippine Export Board, and the APEC Center for Technology Exchange and Training for SMEs for their time in providing the information used in the Internet models case. Thanks to the cellular phone company managers and the staff of the Department of Trade and Industry in Southern Mindanao for their help in gathering information. Thanks also to Hunter Consulting for its work in quantifying the opportunities for MSEs in the telecommunications industry. The authors gratefully acknowledge the suggestions and support from Robin Young of Development Alternatives Inc. (DAI), and Kate McKee and Anicca Jansen of the U.S. Agency for International Development. Thanks to MBP staffers Nhu-An Tran for the help with editing and formatting the papers and Matt Buzby for his administrative support for the study. Lastly, thanks to our families who patiently and enthusiastically supported us throughout the work on this study. Although there was help and guidance from these sources, the authors accept responsibility for the design, implementation, and analysis of the study as well as any shortcomings or errors therein. iii TABLE OF CONTENTS EXECUTIVE SUMMARY ix CHAPTER ONE OVERVIEW OF THE STUDY 1 MBP STUDY HYPOTHESIS......................................................................................................1 Key Research Questions ............................................................................................2 Research Design........................................................................................................3 GUIDE TO THE PAPERS............................................................................................................5 Synthesis Paper..........................................................................................................5 Case Studies of Bayantel PCOs and the Laguna SME Service Center ........................6 Internet-Based Information Services ..........................................................................7 METHODOLOGY .....................................................................................................................7 CHAPTER TWO OVERVIEW OF THE LAGUNA SECEN 9 BACKGROUND .......................................................................................................................9 SERVICES.............................................................................................................................10 Communication Services .........................................................................................10 Information Services................................................................................................11 Business Registration...............................................................................................11 Administrative Services...........................................................................................12 Marketing Assistance...............................................................................................12 Financial Assistance ................................................................................................12 Training...................................................................................................................13 COMPETITION ......................................................................................................................13 CHAPTER THREE CLIENTS 15 CURRENT CLIENTS ...............................................................................................................15 POTENTIAL CLIENTS—MSES OF CALAMBA..........................................................................17 Ownership and Awareness of ICT Equipment..........................................................19 Awareness, Usage, and Image of Selected Business Development Services.............19 Perceived Impact of Services on Profit ....................................................................22 Potential New Services ............................................................................................23 COMPARISON OF CURRENT AND POTENTIAL CLIENTS............................................................24 CHAPTER FOUR FINANCIAL AND OPERATIONAL INFORMATION 25 REVENUE AND COST ANALYSIS............................................................................................25 OPERATIONAL INFORMATION ...............................................................................................27 iv CHAPTER FIVE CONCLUSIONS 29 SWOT ANALYSIS OF THE BUSINESS MODEL.........................................................................29 Strengths .................................................................................................................29 Weaknesses .............................................................................................................30 Opportunities...........................................................................................................30 Threats ....................................................................................................................30 THE FUTURE OF THE LAGUNA SECEN ...................................................................................31