Feasibility

ENTREPRENEURSHIP
Lecture No: 14
Resource Person:
Malik Jawad Saboor
Assistant Professor
Department of Management Sciences
COMSATS Institute of Information Technology
Islamabad.
Previous Lecture Review
• PESTEL Analysis
• Key Success Factors
• Analyzing Competitors
• Create Company Goals and Objectives
• Formulate Strategy
• Translate Strategies into Action Plan
• Establishing Control
Objectives
• Conducting a Feasibility Analysis

• The Feasibility Study
• Five Forces Model
• Product or Service Feasibility Analysis
• Financial Feasibility Analysis
Feasibility Analysis
• Entrepreneurs do not lack creative ideas,

but…
• Is a particular idea a viable foundation
for creating a successful business?
• Feasibility study addresses the question:
“Should we proceed with this business
idea?”
Feasibility Study
• Not the same as a business plan.

• Serves as a filter, screening out ideas that
lack the potential for building a
successful business before an
entrepreneur commits the necessary
resources to building a business plan.
• An investigative tool.
Elements of a Feasibility Analysis
Industry and Product or Service

Market Feasibility Feasibility
Financial
Feasibility
Product or Service
Industry and
Feasibility
Market Feasibility
Financial
Feasibility
Industry and Market Feasibility
Analysis
• Two areas of focus:

• Determining how attractive an industry is
overall as a “home” for a new business.
• Identifying possible niches a small
business can occupy profitably.
The Five-Forces Model
of Competition: A Key
Analytical Tool
Factors Affecting the
Strength of Rivalry
Factors Affecting
the Threat of Entry
Factors Affecting
the Bargaining
Power of Suppliers
Factors Affecting
Competition from
Substitute Products
Factors Affecting
the Bargaining
Power of Buyers
Business Prototyping
• Entrepreneurs test their business models

on a small scale before committing serious
resources to launch a business that might
not work.
• Recognizes that a business idea is a
hypothesis that needs to be tested before
taking it full scale.

Financial
Feasibility
Product or Service Feasibility
Analysis
• Determines the degree to which a product or
service idea appeals to potential customers and
identifies the resources necessary to produce it.
• Two questions:
• Are customers willing to purchase our good or
service?
• Can we provide the product or service to customers
at a profit?
Product or Service Feasibility
Analysis
• Primary research – collect data firsthand and
analyze it.
• Customer surveys and questionnaires
• Focus groups
• Secondary research – gather data that already
has been compiled and analyze it.
• Prototypes
• In-home trials

Financial
Feasibility
Financial Feasibility Analysis
• Capital requirements – must have an estimate of how

much start-up capital is required to launch the
business.
• Estimated earnings – forecasted income statements.
• Return on investment – combining the previous two
estimates to determine how much investors can
expect their investments to return.
You Be The Consultant..
CASE
STUDY
21
• YOU BE THE CONSULTANT
Dick Bardow, a well-educated and experienced inventor and researcher in the medical
equipment industry is seeking outside venture capital for his patent pending product. He is
frustrated by the reaction to a presentation that he made to a Ms. Guinn and her staff of
investors and analysts. Bardow spent considerable time describing the power and potential
of his new technology, while the group only seemed interested in hearing about market
strategies and returns on investment.
Questions:
1. Identify the possible problems with Dick Bardow’s presentation of his business plan.
2. Should potential lenders and investors evaluate new ventures that are based on cutting
edge technology differently from other business ventures? Explain.
3. List at least five suggestions you would make to Dick Bardow to improve his business
plan and his presentation of it.
You Be The Consultant..
CASE
STUDY
23
• YOU BE THE CONSULTANT
There is an unlimited amount of useful knowledge and information to gain from any
company in any industry. The Crowley family has proved that many times over by
borrowing techniques used in their bottling plant (Polar Beverages), applying those to their
ski area (Wachusett Mountain), and vice versa.
A key factor for the success of both operations is filling unused capacity. An hour of unused
or inefficient production time in the bottling plant has the same effect as an hour of
unused or inefficient time on the ski slopes. The ski area was able to fill its idle capacity by
targeting a number of diversified markets that use the slopes at different times of the day
and week. The bottling plant was able to fill its idle capacity by reshaping the size of its
bottles to better pack trucks.
On the surface, companies in different industries may appear to have little in common. The
entrepreneur recognizes the opportunities of technology transfer--applying the lessons
learned in one business and applying those same principles to assorted others.
Q1. Explain the core competencies that Wachusett Mountain has built. What is the source
of its core competencies?
Q2.Explain how Wachusett Mountain uses knowledge management to
build a competitive advantage. What other steps would you suggest the
company take in this area?
Lecture Review
• Conducting a Feasibility Analysis

• The Feasibility Study
• Five Forces Model
• Product or Service Feasibility Analysis
• Financial Feasibility Analysis

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ENTREPRENEURSHIP

• Conducting a Feasibility Analysis

• Entrepreneurs do not lack creative ideas,

• Not the same as a business plan.

Industry and Product or Service

• Two areas of focus:

• Entrepreneurs test their business models

Industry and Product or Service

Industry and Product or Service

• Capital requirements – must have an estimate of how

• Conducting a Feasibility Analysis

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