A feasibility analysis is the process of determining whether a business idea is viable or not, or in other words, whether or not the idea is worth pursuing. A feasibility study is conducted in the early stages of thinking through the prospects for a new business in order to screen ideas before spending a lot of resources on them. Show
The purpose of a product/ service feasibility analysis is to do an overall assessment of the appeal of the product or service being proposed. Before a firm rushes into developing a new product or service, it should be sure that this product or service is something the customer actually wants. There are a few steps to do this:
Next, we need to create a concept statement. A concept statement is a one page description of a business that is distributed to people who are asked to provide feedback on the potential of the business idea. This provides the entrepreneur with a sense of the viability of the product idea and suggestions for how the idea can be strengthened before proceeding further.
2. Industry/ target market feasibility analysis The aim of an industry/ target market feasibility analysis is to assess the overall appeal of the industry and the target market for the proposed business. To determine this you will need to research two things; the industry attractiveness, and target market attractiveness.
Characteristics of attractive industries
Assessing the attractiveness of a target market is tougher than assessing the attractiveness of an entire industry, because understanding a certain target market within an industry takes a lot more in depth research than to understand the attractiveness of the overall industry. The challenge in identifying an attractive target market is to find a market that is large enough for the proposed business idea, yet small enough to not attract large competitors. 3) Organizational feasibility analysis Organizational feasibility analysis is conducted to determine whether a proposed business idea has sufficient management expertise, organizational competence, and resources to successfully launch a business, and it focuses on non financial resources. An organizational feasibility analysis should include two things.
To test sufficiency, the firm should list 6 to 12 of the most critical non-financial resources that will be needed to move forward with the business idea successfully. If the resources are unavailable, it may be impractical to proceed with the business idea. Examples of non-financial resources are:
4) Financial feasibility analysis Financial feasibility analysis is the final component of a comprehensive feasibility analysis and includes three important factors: total start-up cash needed, financial performance of similar businesses, and overall financial attractiveness.
Which are the main components of an industry target market feasibility analysis?Industry/ market feasibility analysis entails an assessment of the overall appeal of an industry and the target market for the prospective business. There are two components this feasibility analysis should cover; industry attractiveness and target market attractiveness.
Which of the following are the main components of an industry or target market feasibility analysis Mcq?Out of the following (d) Industry attractiveness and product/service demand is the main components of an industry/target market feasibility analysis.
Which of the following are the main components of an industry?The major components of an industry are:. Competitors.. Potential competitors.. Distribution of channels.. Product differentiation.. Customer power.. Distribution channels.. Supplier power.. Economies of scale.. What are the four forms of feasibility analysis?The four forms of feasibility analysis include: product/service feasibility, industry/target market feasibility, organizational feasibility, and financial feasibility.
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