Market and Feasibility Analysis

08/10/2020 0 By indiafreenotes

Market Analysis

  1. Overall Summary of the Business Model

Without prior knowledge regarding what the business is supposed to do, an entrepreneur can’t achieve his or her goals.

The executive summary should define the overall details of what the business is all about and the goals and objectives.

It should be clear with the core values and the positioning in the market. It must clearly explain how the brand will enter the local market followed by the international market – if ultimate ambitions stretch that far. This can be done by maintaining its equipment base, input/output process and the good quality of items. It further focuses on the generation of financial resources.

  1. A Strategy That Must Be Followed

You should be clear with your product strategy, which must be based on consumer needs. He/she should survey the situation using various details of their customers.

A few of the elements that must be included are:

  • Company or product mission
  • Marketing and Financial objectives
  • Resource availability
  • Cashflow analysis
  • Competitive analysis
  1. Availability of Products and Services

Entrepreneurs should have a full understanding of how their products or services will reach their target audience. 

Designing good products and services to customers is just one part of the whole plan, however. The aim must be making it available that too in a cost-effective manner. And it should be the ultimate goal of an entrepreneur. It can be achieved by making the best use of the team, promotional activities used for sales, advertising methods and other tools that are being used for communication.

  1. Pricing Strategy

The most important stage of any business model is its pricing. Price can be the maker or breaker of a product. It is the one element of the marketing mix that produces revenue. All other elements fall on the opposite side of the ledger. People should design their product or brand so that it commands a premium price and reaps big profits. It should also reflect a value that the consumers are willing to pay and a benefit that outweighs the cost.

  1. Awareness of the Product

Always plan how you intend to make your product or service known to your intended customer base. You could have the best offering in your industry or niche, but if nobody has heard of it or you, you’re as good as sunk.

The time to plan your social media, content marketing and advertising campaigns is not when you are ready to go to market! 

  1. Who Will Benefit From Your Offering?

Segmentation, targeting and positioning are the essences of Marketing. Your target customer base will go some way to determining the price you can ultimately charge. It will also determine how you can best communicate your offering to them and where you will find them. 

  1. Short Term and Long Term Objectives

Entrepreneurs must have a clear vision of their mission, marketing and financial objectives. They need to be specific about how their brand will satisfy the target market. Nobody can expect immediate profit.  But planning must include short, medium and long-term goals. You need to be clear regarding how your business will proceed as per the life cycle of whatever you are selling. And you need input from other areas of marketing. Nobody can think of or execute everything entailed in pushing an offering to market. 

  1. SWOT Analysis

Before designing a complete project, a pilot project needs to be designed and implemented. An entrepreneur should know everything – including any flaws that may become apparent. Also, the project strength, shortcomings, appropriate options for progressing and warnings can be tested in the pilot project itself for the successful completion or execution of the main project. For this, you need to do a thorough SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis.

  1. PEST Analysis

SWOT Analysis will give you the inner view of the business model. However, it is very important to determine how a business will run in the changing economic scenario. Hence, a detailed PEST analysis needs to be done to know how your model will run in the changing Political, Economic, Social and Technological Environment.

Feasibility Analysis

A well-designed study should offer a historical background of the business or project, such as a description of the product or service, accounting statements, details of operations and management, marketing research and policies, financial data, legal requirements, and tax obligations. Generally, such studies precede technical development and project implementation.

Five Areas of Project Feasibility

A feasibility study evaluates the project’s potential for success; therefore, perceived objectivity is an important factor in the credibility of the study for potential investors and lending institutions. There are five types of feasibility study separate areas that a feasibility study examines, described below.

  1. Technical Feasibility: this assessment focuses on the technical resources available to the organization. It helps organizations determine whether the technical resources meet capacity and whether the technical team is capable of converting the ideas into working systems. Technical feasibility also involves evaluation of the hardware, software, and other technology requirements of the proposed system. As an exaggerated example, an organization wouldn’t want to try to put Star Trek’s transporters in their building—currently, this project is not technically feasible.
  2. Economic Feasibility: this assessment typically involves a cost/ benefits analysis of the project, helping organizations determine the viability, cost, and benefits associated with a project before financial resources are allocated. It also serves as an independent project assessment and enhances project credibility helping decision makers determine the positive economic benefits to the organization that the proposed project will provide. 
  3. Legal Feasibility: This assessment investigates whether any aspect of the proposed project conflicts with legal requirements like zoning laws, data protection acts, or social media laws. Let’s say an organization wants to construct a new office building in a specific location. A feasibility study might reveal the organization’s ideal location isn’t zoned for that type of business. That organization has just saved considerable time and effort by learning that their project was not feasible right from the beginning.
  4. Operational Feasibility: This assessment involves undertaking a study to analyze and determine whether and how well the organization’s needs can be met by completing the project. Operational feasibility studies also analyze how a project plan satisfies the requirements identified in the requirements analysis phase of system development. 
  5. Scheduling Feasibility: Tthis assessment is the most important for project success; after all, a project will fail if not completed on time. In scheduling feasibility, an organization estimates how much time the project will take to complete.

When these areas have all been examined, the feasibility study helps identify any constraints the proposed project may face, including:

  • Internal Project Constraints: Technical, Technology, Budget, Resource, etc.
  • Internal Corporate Constraints: Financial, Marketing, Export, etc.
  • External Constraints: Logistics, Environment, Laws and Regulations, etc.

Benefits of Conducting a Feasibility Study

The importance of a feasibility study is based on organizational desire to “get it right” before committing resources, time, or budget. A feasibility study might uncover new ideas that could completely change a project’s scope. It’s best to make these determinations in advance, rather than to jump in and learning that the project just won’t work. Conducting a feasibility study is always beneficial to the project as it gives you and other stakeholders a clear picture of the proposed project. 

Below are some key benefits of conducting a feasibility study:

  • Improves project teams’ focus
  • Identifies new opportunities
  • Provides valuable information for a “go/no-go” decision
  • Narrows the business alternatives
  • Identifies a valid reason to undertake the project
  • Enhances the success rate by evaluating multiple parameters
  • Aids decision-making on the project
  • Identifies reasons not to proceed

Apart from the approaches to feasibility study listed above, some projects also require for other constraints to be analyzed:

Internal Project Constraints: Technical, Technology, Budget, Resource, etc.
Internal Corporate Constraints: Financial, Marketing, Export, etc.
External Constraints: Logistics, Environment, Laws and Regulations, etc.