Problems and Opportunities: What Is A Business Feasibility Study?

What is a business feasibility study?
 identifying problems and opportunities

 determining objectives
 describing situations
 defining successful outcomes and
 assessing the range of cost benefits associated
with several alternatives for solving a problem.
Business Development Cycle
Opportunity Seeking
• Problems encountered
• Interest
• Skills
• Availability of resources
What is a Feasibility study?
Description of the Product/Service
• It is conducted during the deliberation phase of
• Describe the enterprises, product or service in
the business development cycle prior to
simple language. Give product mix if the
commencement of a formal Business Plan
enterprise will initially be focusing on more
• An analytical tool that includes than one product.
recommendations and limitations, which are • Describe how customers would use and buy
utilized to assist the decision makers when the product or service. Give enough detail to
determining if the business concept is viable help the reader judge the effectiveness of
(Drucker 1985)et al your marketing and positioning plans
• Describe key components or raw materials
The Importance of FS that will be used in the product, how the
 Used to support decision-making process enterprise will source these and how available
 If a project is feasible, proceed to Business Plan they are
 Provides information uncovered from the FS will • Describe plans to test the product to ensure it
support the business planning stage works as planned and is sufficiently durable,
 It is heavily dependent with information rugged, secure etc (e.g. consumer, product
test, beta test, microbial test, nutrition value
etc)
• Describe plans to upgrade product or
expend product idea
TECHNOLOGY firms in the industry maybe eroded by new
• As necessary, provide further technical competitors
information about the product or service • The bargaining power of buyers . The
• Describe additional or ongoing research and power of your customers to drive down
development needs. your prices.
• Keep the description in lay terms and or/explain • The bargaining power of the suppliers . The
technical terms enough to be understood by power of suppliers to drive up the prices of
busine business-savvy but not necessarily your inputs.
technology expert leaders • The threat of substitute product and
services. The extent to which different
INTENDED MARKET ENVIRONMENT products and services can be used in place
• Target Market: of your own.
• Define and describe the target market/s. • The intensity of rivalry among competitors
Distinguish between end users and customer in an industry. The strength of competition
benefits in the industry.
• Be clear how end users and customers benefit.
How and why would they buy the product or
service.
• What is the projected need/s your product or
services fulfill so beautifully. How big is the
opportunity? What level of actual market
demand can be measured versus projected?
•
For business-to-business markets, include:
• What industry is the target market in, who are
the key players, frequency of product
purchase, replacement needs versus
expansion, purchasing process
• Estimate of market size, initial targeted
geographic area, enterprise’s target market
share
For business-to-consumer markets, include:

• Demographic factors, such as income level, Investment Phase
age range, gender, educational level, ethnicity The period of raising capital, actual investment of
• Psychological factors. Values, attitudes, funds, growth and finally cash flow from the
personality investment
• Relevant behavioral factors such as frequency
of purchase and shopping behavior Dimensions of Feasibility Study
• Market Viability
COMPETITION • Technical Viability
• Describe direct and indirect competition (as • Business Model Viability
it pertains to the target markers only) • Economic and Financial Model Viability
• For key competitors, give market share, • Exit Strategy Viability
resources, product and market focus, goals,
strategies, strengths and weaknesses. Business Plan
• List all key barriers to entry (Michael Porter) • A written document describing the nature of the
business, the sales and marketing strategy, and
the financial background, and containing a
PORTER’S FIVE-FORCES MODEL OF INDUSTRY projected profit and loss statement.
COMPETITIONS • A business plan is also a road map that provides
• The threat of new entrants. Refers to the directions so a business can plan its future and
possibility that the profits of established helps it avoid bumps in the road.

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Problems and Opportunities: What Is A Business Feasibility Study?

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What is a business feasibility study?

 identifying problems and opportunities

Business Development Cycle

For business-to-consumer markets, include:

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