Types of Project Feasibility Market Feasibility, Technical Feasibility, Financial Feasibility, Economic Viability, Operational Feasibility

Market Feasibility

Market feasibility must not be mixed up with economic feasibility. The potential influence of market demand, competitive activities, and available market share should be considered in the market feasibility analysis. During the start-up, ramp-up, and commercial start-up phases of the project, possible competitive activities (local, regional, national and international) should be analyzed for early contingency funding and impacts on the operating costs.

• Type of industry
• Prevailing market
• Future market growth
• Competitors and potential customers
• Projection of sales

Technical Feasibility

The engineering feasibility of the project is viewed in the technical feasibility. Certain important engineering aspects are covered which are necessary for the designing of the project like civil, structural, and other relevant aspects. The technical capability of the projected technologies and the capabilities of the personnel to be employed in the project are considered.

In certain examples especially when projects are in third world countries, technology transfer between cultures and geographical areas should be analyzed. By doing so productivity gain (or loss) and other implications are understood due to the differences in fuel availability, geography, topography, infrastructure support, and other problems.

Financial Feasibility

Financial feasibility must be differentiated from economic feasibility. The ability of the project management to raise sufficient funds required to implement the proposed project is included in the financial feasibility. Additional investors and other sources of funds are considered by the project proponents for their projects in many cases.

In such situations feasibility, sources, soundness, and applications of these project funds may be a hindrance. Other aspects of financial feasibility should also be viewed, if appropriate, like creditworthiness, loan availability, equity, and loan schedule. The implications of land purchase, leases, and other estates inland are also reviewed in the financial feasibility analysis.

• Initial investment
• Resources to procure capital: Banks, investors, venture capitalists
• Return on investment

Economic Viability

Economic feasibility refers to the feasibility of the considered project to produce economic benefits. A benefit-cost analysis is needed. Furthermore, the economic feasibility of a project can also be evaluated by breakeven analysis. In order to facilitate the consistent basis for the evaluation, the tangible and intangible facets of a project must be translated into economic terms. Economic feasibility is critical even when the project is non-profit in nature.

This evaluation typically includes a cost-benefit analysis of the project, which aids firms in determining the project’s viability, cost, and benefits before spending financial resources. It also acts as an objective project review, boosting project credibility by assisting decision-makers in identifying the proposed project’s beneficial economic benefits to the organisation.

Safety Feasibility Study

Another important aspect that must be considered in project planning is safety feasibility. Safety feasibility involves the analysis of the project in order to ascertain its capacity to implement & operate safely with the least unfavorable effects on the environment. Mostly in complex projects, environmental impact assessment is not properly addressed.

Political Feasibility Study

The directions for the proposed project are mostly dictated by political considerations. This is certainly correct for large projects with potential visibility that may have important political implications and government inputs. For example, regardless of the merit of the project, the political necessity may be a source of assistance for a project.

Operational Feasibility

This evaluation entails conducting research to evaluate whether and to what extent the organization’s needs can be addressed by completing the project. Operational feasibility studies also look at how a project plan meets the requirements specified during the system development requirements analysis phase.

Cultural Feasibility Study

The compatibility of the proposed project with the cultural environment of the project is included in the cultural feasibility. Planned operations should be integrated with the local cultural beliefs and practices in labor-intensive projects. For example, what a person is willing to perform or not perform is influenced by his religious beliefs.

Social Feasibility Study

The effect that a proposed project may have on the social system in the project environment is addressed in the social feasibility. It may happen that a particular category of employees may be short or not available as a result of ambient social structure.