Competitive Profile Matrix : MLHUILLIER

Critical Weight M Lhuillier Palawan RD Villarica Cebuana

Success Factors Pawnshop Pawnshop Lhuillier
Factors Ran Weig Ran Weig Ran Weig Ran Weig Rank Weig
king ht king ht king ht king ht ing ht
Service
Quality 12 % 4 .48 4 .48 2 .24 3 .36 4 .48

Security
and 12 % 4 .48 4 .48 3 .36 3 .36 4 .48
Safety

Location 12 % 4 .48 4 .48 2 .24 1 .12 3 .36

Appraisal 12 % 3 .36 3 .36 1 .12 4 .48 4 .48

Price

Financial 14 % 4 .56 3 .42 2 .28 2 .28 3 .42

Position

Technolog 10 % 4 .40 3 .30 2 .20 2 .20 3 .30

y

Customer 05 %. 3 .15 3 .15 2 .10 2 .10 3 .15

Loyalty
Market
Share 03 % 3 .09 3 .09 1 .03 1 .03 3 .09

Popularity 03 % 3 .09 4 .12 1 .03 1 .03 3 .09

Additional 12 % 4 .48 3 .36 1 .12 1 .12 3 .36

Services

Marketing .05 % 4 .20 3 .15 1 .05 1 .05 4 .20

Total 100% 3.77 3.39 1.77 2.13 3.41

 The companies that are included in the competitive profile matrix are M Lhuillier,
Palawan Pawnshop, RD Pawnshop, Villarica and Cebuana Pawnshop. The CPM presents that M
Lhuillier is the strongest player in the industry. Based on the rating as seen on the Competitive
Profile Matrix table, M Lhuillier has a higher rate on financial position, technology and
additional services compare to Palawan Pawnshop. M Lhuillier ensures all branches have enough
fund because all of our competitors occasionally turn down their customers due to lack of fund.
Customer’s loyalty is sometimes at stake if they need money and the pawnshops don’t have
funds. That’s the importance of having enough funds. All pawnshops cannot have that 100 % of
customer’s loyalty. In terms of appraisal Cebuana Lhuillier and Villarica have the highest
appraisal and can attract more pawners. Their challenge is how to deal and explain that they had
the highest appraisal rate at the same time they had a high interest rate that results to lower net
proceeds for customer’s item. With the help of competitive profile matrix table, M Lhuillier can
identify its strengths and weaknesses. And to have an accurate data of competitive profile matrix
the company conducts mystery shopping which hires individuals to shop competitor’s services
and their charges. From that they can input accurate and reliable data’s.

Even if M Lhuillier is the strongest company, its total score is very close with Palawan
Pawnshop, 3.39 and Cebuana Lhuillier, 3.41. Some of their strengths are equal like service
quality, security and safety, market share, and customers’ loyalty. On the other hand, RD
Pawnshop is the weakest among them. It does not have any relative strength against its rivals.
Palawan Pawnshop is the most popular. As to location, M Lhuillier and Palawan Pawnshop is the
same. Overall, M Lhuillier has created its strategies properly while Cebuana Lhuillier and
Palawan Pawnshop are also doing good. Villarica Pawnshop must be consistent and improve
more on their strategies. Lastly, RD Pawnshop must really improve their ratings in the most
important areas of industry.
 SWOT ANALYSIS: MLHUILLIER
Strength and Weaknesses
SWOT ANALYSIS : MLHUILLIER
Opportunities and Threats
Strength and Weaknesses
Opportunities and Threats

Strengths Weaknesses

1. Excellent Customer Service 1. Old system and equipment

2. Location of Branches 2. Human errors
3. Security- Safety in transactions 3. Poor facilities
4. Manpower- employing experts 4. Mass resignation
5. Global expansion 5. Lack of supplies due to pandemic
6. Customer’s Loyalty
7. Business hours (with branches that is 24 hours open)
8. Strong International transactions
9. Automatic database
10. High Liquidity

Opportunities Threats

1. High Unemployment 1. Many competitors

2. Hand-to-mouth lifestyle of most Filipinos 2. Competitors are closely located
3. Philippines is prone to calamities 3. Threat of substitute
4. Financial leverage 4. Government Regulations
5. High credit needs 5. Demographic Changes
6. Strong demand of pawnshop services 6. Unstable economy
7. Most Filipinos belong to the middle and working class 7.Insurgencies
8. Technological advancement 8.COVID19 pandemic
9. Open branches to abroad
A. Strengths

1. Excellent Customer Service

All businesses are gaining benefits by providing exceptional customer services. When
someone needed money for unexpected expenses but their budget is tight, running to local
pawnshop is the easiest way to secure the needed funds. Selling and buying an item to a
pawnshop is optional but whatever reason, a pawnshop is a reliable shop. However, it takes a
while to find a trusted and reliable pawnshop. There are some qualifications that certain people
choose a pawnshop they will trust. Excellent customer service meets the customer’s needs and
expectations. When customers feel that they have receive unexpected extra effort they have
experience excellent service. M Lhuillier employees are trained to give the best excellent
customer service. Giving them high morale might lead to a pleasurable environment, and makes
staff feel nice about what they do. All customers that enter the branch should be serves and offer
other services of the company. All employees take necessary measures to provide customers
good experience. Upon entering we are required to smile and greet them. Asking what they need,
and work for it in the shortest possible time then upon completing what they need we will
introduce other products and services. We made sure that all of customers felt secured within our
branches and they can trust us. So that those clients or customers will kept on coming back to us
and recommend the company to others. They will tell their families and friends which leads to
good publicity and word of mouth. It creates more exposure for our business and increase
popularity. We also conduct and encourage customers’ feedback and comments to analyze
weakness and strengths that is probably the effective way to understand the insight of customers.

The best way of obtaining recognition is from our customers. Having excellent services is
the least that every company and personnel can do in exchange of the loyalty and great
appreciation of masses to products and services we offered. All hard works and all day work of
personnel in every branches are compensated by a bright and pure smile of our customers
signified by the excellent services and product that we whole heartedly rendered in our everyday
lives in each branch.
2. Location of Branches

The more branches the better and it makes the company more popular. That’s why
MLhuillier put up branches even on rural areas. Locations are very important. Before putting up
a branch in a certain place it undergoes with market study, establishing visibility and the total
cost or expenses of operation should also consider. Legal factors are also reviewed. In a
pawnshop were money remittance is also one of the most popular services, we made sure that we
live our tag line “ANG TULAY NG PILIPINO”. We always believe that those customers that
are senders are living in urban areas where we have so many branches and before they send
money to their love ones at rural areas they will always ask their parents that are usually old what
are the nearest pawnshop or money remittance to them. Paying bills, buying loads and of course
pawning can be done even in the most remote areas in the Philippines were we have close to
2500 branches nationwide. Putting a branch should always be in a best location. Best location
can increase brand visibility and can influence a business ability to market itself.

Finding strategic places were anyone can locate branch and easy access to all, especially
those in rural places and has the difficulty in terms of transportation is the main concern why
MLhuillier finds by all means to establish branches in every corner of the archipelago and team
up with different partners across the globe. Getting popularity means having many branches that
are visible and accessible to most of its clientele, after all it’s the main goal of every institution
particularly the MLhuillier, and that is to serve every Filipino, anywhere, anytime by all means.

3. Security- Safety in transactions

The business is a financial institution that involves money in all transactions. To ensure
company’s assets and customers items secured. M Lhuillier has a numerous security protocols
such as monitoring nearby establishments and renters, 24 hours guards on branches that open 24
hours. On the branches that do not operate 24 hours there are security system that alarms
whenever there is someone who wanted to enter by force or theft trying to penetrate the branch.
That system is working 24 hours 7 days a week with a motion detector inside the branches and
CCTV cameras that are monitored to protect employees and customers in all branches.
 Aside from the safety of the branches, Mlhuillier also sees to it that all pawned items or
jewelries has an insurance in times of unexpected and untoward incident that may happen during
that the time that the item or jewelry is in the custody of the branch. This is also to give
assurance to the customers that their items are safe and secure within our care. Another way to
ensure safety and security is the optional insurance offered to our customer in every item or
jewelry they pawned or when receiving money remittance. The insurance given is the least
Mlhuillier can offer to help every customer have physical security while having making business
with us.

4. Manpower- employing experts

Employing experts by sharpening employee’s knowledge and skills. The company keeps
on giving trainings and seminars. Padrino system does not exist in Mlhuillier, we hire competent
and reliable personnel to ensure that we offer quality and excellent services. The continuous
training and skills development of every personnel is necessary and important that the name we
established throughout the years will be kept on its glory. All personnel undergo unilateral and
synchronous training in all branches and being keep updated on the latest trends on jewelry and
monetary development across the globe.

5. Global Expansion

Since that Filipinos are scattered around the world and to keep them feel that they are just
here in the country M Lhuilier is expanding ML Global and now have 30 branches on United
States of America and kept on expanding which is expected to open branches next year on Asian
countries.
Aside from putting up and expanding branches abroad, MLhuiilier also finds its way to
partner with other financial institution around the world, to help our Kababayan in terms of
money remittances and other financial needs, to sustain financial obligation to their family back
here in the Philippines.
6. Customer Loyalty

Due to the M Lhuillier brand is well known for its reliable, fast, high appraisal value, low
interest rate and low service fees customers tend to come back at M L huillier. Keeping loyal
customers is less expensive than getting new ones. To establish strong customer loyalty we
(employees) build rapport with customers. We assure and let them felt that their hard earned
money and items are being take care and valued.

The name MLhuillier had established its name not by the company but because of the
loyalty given by our costumers all throughout the years. By giving excellent service, customers’
loyalty cannot be compensated by any amount or any awards given to us. It is a visible evidence
how the company establish rapport and maintain its service to gain the loyalty of our custoers.

7. Business hours (with branches that are 24 hours open)

We are the only pawnshop that has branches with 24 hours open around the country. It
gives us significant advantage towards competitors. MLhuillier believes that time is important,
with that, MLhuillier come to innovate its business hours, this is to give more time to every
customer to be present in their work during day time or make their scheduled transaction without
jeopardizing the services offered. By having 24 hours service, it allows customers to be
productive at their desired time without being rush to meet the closing time to transact and sends
money to the family waiting at the province or the nearby place. Emergency cases also makes
reason why we offer 24 hours, for it allow to transact even midnight.

8. Strong International Transactions

I can say that having a strong international transaction gives us strength because our
competitors usually turn downs their customers and those customers go us and eventually makes
our regular or loyal customers. Those transactions give the company a lot of income and
popularity. International tie up and partnership makes us standout especially to our OFW, for
they can assure that their hard earned money that was sent here are in good hands. In times of
need, they can depend on, that they can have their money at the right time.

9. Automatic Database

After initially inputting the necessary data and requirements of the customers e. g.
government licensed ID, customers photo, pawn form, item, contact numbers, KYC and other
information. The customer information will be automatically stored in the company database,
which can be referred back and re use without inputting again in the future with all previous
transactions showing. This helps the transactions faster and saves time and effort.

10. High Liquidity

The company has more than enough liquid assets- cash –to handle customer demands in
terms of loans and services. Cash from liquid assets are distributed to branches to ensure
substantial amount needed in every branch.

B. Weaknesses

1. Old System and equipment,

All branches of the company uses desktop computers that are some branches using old
computers that have operating system of Windows XP and a lot of data’s are stored that it is
prone to slow processing and occasional hanging.

2. Human errors

Since the business process is semi-automated, most of the errors that happened are
because of employees’ mistake. Like inputting customers details that are very crucial and
important. This maybe because to some branches especially to those branches that has few
personnel to attend and cater more than enough customers to their capacity, usually, human
errors frequently occurs.

3. Poor facilities

The company admits that some branches especially on rural areas are low cost. It was
done to equal the not so big income on rural areas. Facilities are not the same with branches of
rural and urban areas. This is because the company prioritizes branches at the urban or with in
the central business district of every town or city rather than those in remote areas.

4. Mass resignation

Due to pressure, unpleasant or unprofessional character of some area managers and

sometimes priorities in each employee leads to mass resignation. Lack of professional personal
development that leads to mass resignation, it is also an indication of mismanagement and that
they lack of support and development given to their employees.

5. Lack of supplies due to pandemic

This pandemic has created a lot of problems in the whole world and one of it is the
limited transportation of public vehicles including sea and air travel, leads to delays on
shipments. Many of our office supplies come from Cebu City. May this will be the wakeup call
to the management to put up specific warehouse in different areas to allow supplies to be stock
and keep to easily supplies surrounding branches at least one in every region.

C. Opportunities

1. High Unemployment

The unemployment rate in the Philippines surged to 8.7 percent in the December quarter
of 2020 from 4.5 percent in the same quarter last year, amid the economic downturn by the
coronavirus crisis. The number of unemployed person unemployed persons surged by 1.77
thousand to 3.81 million, while the number of employed dropped by 2.70 thousand to 39.84
million. (source: National Statistics Office of the Philippines) Those employed who has been an unemployed turn
to be our customers. They have no source of income and their savings is not so big to sustain for
living they are pawning their valuable items to survive. In some other ways, a lot of people with
very high potentials will come to M Lhuillier and look for job opportunities. Through this we can
hire the much needed labor and new ideas to provide solutions to the lack of employees of the
company.

2. Hand-to-mouth lifestyle of most Filipinos

Most of Filipinos don’t have any savings. These are people who do not plan ahead, but
decide what to do from day to day. It is a way of some Filipinos live to live hand-to-mouth to
have just enough for daily survival and nothing extra. If they need urgent financial need, people
turn to pawnshops to loan. Having a short term financial service, M Lhuillier greatly helps
people who need a fast source of money.

3. Philippines is prone to calamities

With Phillippines being prone to calamities like super typhoons, many unexpected yet
necessary expenses sprout side by side. Not everyone has emergency funds to use in order to
repair for the damages the calamities have caused. Shelters need immediate repairs and with not
having extra cash available on hand, people goes to pawnshops like M Lhuillier with their items
in exchange for loaned money that can answer to their needs.
Another is that, families or loved once in other place has the easy access to send money
in the soonest possible time without delays and hassle.
4. Financial leverage

With regards to a large portion of the company’s clientele the need for quick finances
allows certain leverage with regards to the clientele’s choosing of which financial institution to
pawn goods or items. M Lhuilliers uses own cash and a loan that earns minimal interest to
provide customers financial need which is expected to allow a steady stream of acquisitions
premised on financial leverage against clientele.

5. High credit needs

The more high credit needs the more business for pawnshops. It arises from short term to
long term financial needs. In pawnshops like MLhuillier the longer the items was being renewed
by customers the better. The more items being pawned the bigger the profit from interest.

6. Strong demand of pawnshop services

Pawnshops can and will be a good alternative source of credit for small borrowers. It has
become a permanent fixture in the lives of ordinary Filipinos. Jewelries, appliances and other
properties and personal belongings are pawned everyday to temporarily augment the expenses of
those who cannot borrow from banks and other financial institutions. Pawnshop these days have
been growing at a remarkable pace in terms of money remittance and the credit provided to the
people. The volume of money transfer locally and internationally gets bigger through
pawnshops. Because it is not intimidating, faster transactions and the poor functioning of the
banks in the Philippines people choose to get their money remittance to pawnshops over banks.

7. Most Filipinos belong to the middle and working class

Most of the pawnshops client or customers comes from middle working class. The
middle class is dependent on salary as their main source of income. This sector is actively
funding pawnshops. With the offer of fast and hassle free transaction, with just a minute, an
ordinary Filipino, rely most of their financial needs to any pawnshop available in their area.
8. Technological Advancement

Having advance technology gives a company great competitive edge against its
competitor’s .It can bring improvements to company’s process and can help employees minimize
duties and responsibilities. It can make daily activities minimize or free human errors. It can also
help reduce time, effort and cost for the company.

9. Open branches abroad

Expanding around the world is a sign of the company’s progress. Access to a new market
and increasing the brand’s visibility are benefits in opening branches abroad.

D. Threats

1. Many competitors

Because of the growing industry of pawnshops, there are several competitors and many
are still arising. The stiff competition among pawnshops has lowered down the effective lending
rates charged.

2. Competitors are closely located

M Lhuilliers competitors are always situated the next door or on the adjacent part. Stiff
competition due to the presence of many pawnshops in the area The most common competitor
that always with us whenever we have branch is Palawan Pawnshop. It is inevitable that the
company shares the same market with its competitor’s presence in the same vicinity.

3. Threat of substitute

Although pawnshops have no close substitute pawnshop companies are moderately

affected by threats. Micro financing and personal lenders are considered as threat to pawnshops.
4. Government Regulations

Though the environment for quasi –financial institutions may be conducive for growth, it
disallows the same from expanding beyond that particular function. Microfinance and similar
orthodox banking functions are still under the dominion of the proper banking industry.
Pawnshops has smaller amount of withdrawals compare to banks.

5. Demographic Changes

As with time, consumers grow more intelligent especially when it comes to finances.
Demographic change affects the standard of living of consumers .With the continued reaction of
people when customer having a loan sometimes customer tend not to engage in pawning to
satisfy their wants. With the increase of financial knowledge and responsibility, therein lies a
threat to the continued growth of a pawnshop industry.

6. Unstable economy

As the Philippines is highly dependent on the remittances from overseas Filipino workers
if the time comes that this factor falls short, the industry will be at stake. Any negative changes
in the economy will badly affect any business.

7. Insurgencies

Financial institutions spends a lot have a secured working environment and at least be
able to stop intruders entering to any branch. Although to some areas, presence of insurgencies is
categorized as highly dangerous, MLhuillier never take risk the life of its personnel including its
walk-in and loyal customers.
8. COVID19 Pandemic

Pandemic affects everyone in the whole world. It changes everything. In pawnshops

some of our branches are close and have no income in times of lockdowns. We have additional
cost for safety protocols. And of course, the threat to employee’s health is there.

Internal and External Factor Evaluation: M LHUILLIER

The main objective of both these matrix is to help organization to analyze internal and
external environment. Collecting information about strengths, weaknesses, opportunities and
threats.

Internal Factor Evaluation

Internal Factor Evaluation (IFE) Matrix is a strategy tool used to evaluate firm’s
internal environment and to reveal its strengths as well as weaknesses.

Legend:
4- Superior
3- Above Average
2- Average
1- Poor
 IFE MATRIX: Internal Factor Evaluation

KEY INTERNAL STRENGTHS Weight Ranting Weighted

Score
1.Excellent customer service .10 4 .40
2.Location of branches .07 3 .21
3.Secuirty-safety in transactions .07 3 .21
4.Manpower-employing experts .07 4 .28
5.Global expansion .03 4 .12
6.Customer Loyalty .07 4 .28
7.Business hours ( With branches that is 24 hours open ) .10 4 .40
8.Strong international transactions .07 4 .28
9.Automatic database .07 4 .28
10.High Liquidity .12 4 .48

KEY INTERNAL WEAKNESSES

1.Old system and equipment .07 2 .14

2.Human errors .06 1 .06
3.Poor facilities .03 2 .09
4.Mass resignation .04 1 .04
5.Lack of supplies due to pandemic .03 1 .03

TOTAL 1.00 3.30

Although the Total Weighted Score did not reach 4.00 attaining 3.30 is still notable as it
is strong Total Weighing Score. It can be interpreted that MLhuillier is working towards a strong
internal position. It also indicates that the company is in strong position on its industry. It is
competitive against its competitors and knows how to improve its strength and overcome
weaknesses. Excellent customer service and a business hour (with 24 hours open branches) get
the highest weight. It only shows that the company gives emphasis on those two factors.
External Factor Evaluation: M Lhuillier

EFE MATRIX: EXTERNAL FACTOR EVALUATION

KEY EXTERNAL OPPORTUNITIES Weight Ratings Weighted

Score
1.High Unemployment .05 3 .15
2.Hand-to-mount lifestyle of most Filipinos .05 3 .15
3.Philippine is prone to calamities .05 3 .15
4.Financial leverage .05 3 .15
5.High credit needs .07 4 .28
6.Strong demand of pawnshop services .07 4 .28
7.Most Filipinos belong to the middle and working class .07 3 .21
8.Technological advancement .08 4 .32
9.Open branches to abroad .05 4 .20

KEY EXTERNAL THREATS

1.Many competitors .10 3 .30

2.Competitors are closely located .10 3 .30
3.Threat of substitute .03 2 .06
4.Government regulations .05 3 .15
5.Demographic changes .05 2 .10
6.Unstable economy .04 2 .08
7.Insurgencies .05 4 .20
8.COVID19 pandemic .04 4 .16

TOTAL 1.00 3.24

The following key external factors are being weighted according to opportunities and
threats. The number specifies how important the factor for MLhuillier to maintain on the top in
the industry. On the other hand, rating shows how effectively MLhuillier current strategy reacts
to the opportunities and threats.
 As seen on the matrix of MLhuillier, the most important factor in the company which
weighted 10, are many competitors and their location. Both are key factors from threats. In our
country there are large numbers of pawnshops even in the most inaccessible rural areas around
the country. With tight competition, most of their services are similar with each other. And most
of the time similar pawnshops are located in one area. The company weighs 5 for unemployment
rate to cope its lack of employees. The lowest is threats of substitutes which the company sees
that until today there is no formal substitute for pawnshops.

When it comes to ratings the highest are High Credit Needs, Strong demand for
pawnshop services, technological advancement, opening branches abroad, insurgencies and
COVID19 pandemic. These strategies greatly affect the company effectively and positively.
While Demographic changes and unstable economy are factors having poor response.

INTERNAL-EXTERNAL MATRIX
IFE TOTAL WEIGHTED SCORE

STRONG AVERAGE WEAK

3.00-4.00 2.00-2.99 1.00-1.99

HIGH I II III
EFE 3:00- 4.00  (3.30,3.24)
TOTAL
WEIGHTED
SCORE

MEDIUM IV V VI
2.00- 2.99

LOW VII VIII IX

1.00- 1.99
 The result of this matrix shows that the internal factors scored 3.30, implying that it has a
strong internal position; while the external factors scored 3.24 , which represents a high external
position. Plotting these ratings in the diagram shows that the intersection of the said points is in
cell I. It shows that the company is strong internal factors and gives high value on its external
factors.

Lowela M. Pellejo
MBA II
BA 710- Strategic Management
Prof. Raymundo Arcega, PhD