Entrepreneurship Lecture 4 & 5 Feasibility Study
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Questions and Answers

Which factor is NOT considered in market feasibility analysis?

  • Product quality
  • Distribution outlets
  • Marketing strategy (correct)
  • Competitor analysis

A cost-advantage strategy aims to establish the firm as the highest-cost producer in the industry.

False (B)

What is competitive advantage?

A benefit that exists when a firm has a product or service seen as better than competitors.

The analysis of skills and abilities required to run a business is known as __________.

<p>Technical Feasibility</p> Signup and view all the answers

Match the competitive strategies with their descriptions:

<p>Cost-Advantage Strategy = Lowest-cost producer Marketing-Advantage Strategy = Emphasizes uniqueness of product or service Michael Porter Competitive Strategies = Framework for competitive positioning Peter Drucker's Generic Competitive Strategies = Generic approaches for competitive advantage</p> Signup and view all the answers

Which question is essential in competitor analysis?

<p>What resources do they control? (D)</p> Signup and view all the answers

Distribution outlets have no influence on market response.

<p>False (B)</p> Signup and view all the answers

What is a key benefit of forming alliances in competitor analysis?

<p>Co-opting potential or actual competitors.</p> Signup and view all the answers

What identifies the various ways a company can earn income from its assets and operations?

<p>Revenue Streams (B)</p> Signup and view all the answers

Customer Relationships refer to the pricing strategy a company uses to attract customers.

<p>False (B)</p> Signup and view all the answers

What are the key resources required to create value for the customer?

<p>Key resources</p> Signup and view all the answers

The __________ describes the different products or service bundles a company delivers to its customers.

<p>Value Propositions</p> Signup and view all the answers

Match the following elements of the business model canvas to their definitions:

<p>Customer Segments = The different groups a company intends to serve Channels = The ways to deliver value propositions Key Partners = Strategic alliances to support value creation Cost Structure = Main items contributing to operational costs</p> Signup and view all the answers

Which of the following is NOT a source of funds for financing a business?

<p>Government Agencies (B)</p> Signup and view all the answers

Operational feasibility focuses on how a business will secure supplies and staff.

<p>True (A)</p> Signup and view all the answers

What tool is used to assess and develop the business model?

<p>Business Model Canvas</p> Signup and view all the answers

The _____ needs of a business and how they will be met are essential for financial feasibility.

<p>financial</p> Signup and view all the answers

Match the following sources of finance with their category:

<p>Personal Savings = Equity Commercial Banks = Debt Venture Capital Firms = Equity Asset-Based Lenders = Debt</p> Signup and view all the answers

Which building blocks are included in the Business Model Canvas?

<p>Value Proposition (B)</p> Signup and view all the answers

Ensuring quality and cost control is an important aspect of operational feasibility.

<p>True (A)</p> Signup and view all the answers

What is a key consideration for the financial feasibility analysis?

<p>Targeted return on investment</p> Signup and view all the answers

What is the main purpose of questionnaire design?

<p>To ensure clear and relevant data collection (B)</p> Signup and view all the answers

Closed-ended questions allow respondents to provide their answers in their own words.

<p>False (B)</p> Signup and view all the answers

List the two main forms of questions used in questionnaires.

<p>Closed-ended and Open-ended</p> Signup and view all the answers

The findings from a questionnaire should be analyzed based on the _____ of the study.

<p>goals</p> Signup and view all the answers

Match each element of market research with its description:

<p>Target Population = The group that the study aims to understand Selection of Sample = The process of choosing participants for the study Objectives = The aims or goals of conducting research Methodology = The approach taken to collect and analyze data</p> Signup and view all the answers

What is one of the four main elements of a feasibility study?

<p>Operational Feasibility (B)</p> Signup and view all the answers

A feasibility study includes analyzing consumer income as part of market feasibility.

<p>True (A)</p> Signup and view all the answers

What must you analyze to determine market feasibility?

<p>Size, composition, taste, attitudes, preferences, demand, consumer income.</p> Signup and view all the answers

The feasibility study will show how much advertising and __________ will be needed to launch your product or service.

<p>promotion</p> Signup and view all the answers

Match the types of feasibility elements with their focus:

<p>Market Feasibility = Analysis of market conditions Technical Feasibility = Assessment of technical requirements Operational Feasibility = Evaluation of operations and logistics Financial Feasibility = Examination of financial risks and returns</p> Signup and view all the answers

What question should one consider to determine if a business idea is viable?

<p>Is the market ready for this product/service? (D)</p> Signup and view all the answers

The approach to a feasibility study should be completed in an objective and timely manner.

<p>True (A)</p> Signup and view all the answers

What is the goal of conducting a feasibility study?

<p>To determine if the business idea is viable and to formulate a plan of action.</p> Signup and view all the answers

Which of the following is NOT a criterion for defining smallness in business?

<p>Financing from multiple investors (A)</p> Signup and view all the answers

Listening to the comments of people is an effective method for generating business ideas.

<p>True (A)</p> Signup and view all the answers

What is one method used to obtain primary data during a feasibility study?

<p>Observation</p> Signup and view all the answers

Secondary data consists of information that has been ______.

<p>previously obtained</p> Signup and view all the answers

Match the following methods of generating ideas with their descriptions:

<p>Focus Groups = Interactive discussion with a small group Brainstorming = Generating a wide range of ideas through group effort Problem Inventory Analysis = Identifying problems to inspire solutions Reverse Brainstorming = Thinking of ways to cause a problem to find solutions</p> Signup and view all the answers

Which of the following is a common source of secondary data?

<p>Government publications (A)</p> Signup and view all the answers

Listening to the ______ can help identify market needs and trends.

<p>comments of people</p> Signup and view all the answers

A company with more than 100 employees qualifies as a small business.

<p>False (B)</p> Signup and view all the answers

Flashcards

Market Feasibility

Examining if a product or service is suitable for the market, considering size, composition, taste, attitudes, preferences, demand, and consumer income.

Market Analysis

Understanding the market by analyzing its size, composition, tastes, attitudes, preferences, demand, and consumer income.

Product/Service Analysis

Examining market response factors like price.

Feasibility Study

A systematic investigation to determine if a business idea is viable, considering market, technical, operational, and financial aspects.

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Market Response

Customer reaction to a product or service regarding factors like price.

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Business Idea Viability

Assessing if a business idea is worthwhile to pursue.

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Feasibility Study Goal

To determine if a business idea is practical and the steps to make it successful.

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Price Analysis

Determining the price point for a product/service that resonates with the market.

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Competitor Analysis

Identifying, evaluating, and strategizing against current and potential competitors.

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Cost-Advantage Strategy

A competitive strategy focusing on becoming the lowest-cost producer.

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Marketing-Advantage Strategy

A competitive strategy emphasizing product/service uniqueness.

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Competitive Advantage

A benefit when a company's product/service is perceived better than competitors'.

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Product Quality

A factor influencing market response to a new product.

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Distribution Outlets

Essential locations available for product distribution.

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Technical Feasibility

Assessing the technical skills, equipment, and know-how needed to operate a business.

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Operational Feasibility

Assessing the practical aspects of running a business, including securing supplies, staffing, and maintaining quality and cost control.

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Financial Feasibility

Analyzing the financial needs of a business and how those needs will be met, considering funding options (loans, equity) and expected ROI.

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Sources of Funds

Different ways to obtain funding for a business, including personal savings, loans, attracting equity investors, and more.

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Business Model

The strategy a business uses to operate and generate income. It determines the feasibility of the business.

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Business Model Canvas

A tool for assessing and developing a business model by evaluating nine core aspects to ensure its viability.

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Targeted Return on Investment (ROI)

The desired profit a business aims to achieve relative to the investment.

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Equity

Funding obtained through the sale of ownership in the company.

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Value Proposition

A product or service package a company offers to its customers.

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Customer Segments

The groups of people a company aims to serve with its value proposition.

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Customer Relationships

The interactions and connections a company builds with its customers to satisfy and retain them.

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Channels

The ways a company delivers its value proposition to its customer segments.

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Revenue Streams

How a company generates income from its assets and operations.

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Closed-Ended Questions

Questions with pre-defined answer choices, allowing respondents to select one or more options.

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Open-Ended Questions

Questions that allow respondents to provide their own answers in their own words.

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Pie Chart

A circular graph divided into slices representing proportions of a whole data set.

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Bar Chart

A graph with rectangular bars representing data values, often used for comparisons.

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Line Graph

A graph that uses lines to connect data points, showing trends or changes over time.

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Small Business Criteria

Characteristics that define a business as 'small', including limited funding, localized operations, size relative to competitors, and a small workforce.

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Generating Business Ideas: Trends

Identifying emerging trends within the economy can spark ideas for new products or services.

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Generating Business Ideas: Community Needs

Analyzing the specific needs and gaps within a local community can lead to valuable business opportunities.

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Generating Business Ideas: Solving Problems

Observe common difficulties people face and brainstorm innovative solutions that address those challenges.

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Generating Business Ideas: Observing Behavior

Pay attention to people's daily activities, fashion choices, eating habits, and lifestyles to uncover potential business ideas.

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Feasibility Study: Primary Data

Information collected firsthand through research methods like observation, experiments, surveys, or focus groups.

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Feasibility Study: Secondary Data

Information previously collected and available for analysis, such as government reports, publications, or company data.

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Primary Data Methods: Observation

Observing natural activities and behaviors to gather insights.

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Study Notes

Entrepreneurship Lecture Notes - Feasibility Study

  • Lecture: 4 & 5 focus on feasibility studies
  • Areas to cover: Importance, procedure, elements, business models, and conducting feasibility studies
  • Feasibility Study Definition: An in-depth analysis of situational factors affecting a prospective business, whose success depends on a suitable action plan to address these factors.
  • Feasibility study purpose: Minimizing risk and uncertainty in a prospective business to ensure success.
  • Importance of Feasibility Study:
    • Determines if there's a real need for the product/service
    • Identifies target customer groups most interested in the product/service
    • Identifies competitors and potential market share
    • Examines various aspects of running a business
    • Determines if large companies/organisations will use the product/service
    • Checks if a living can be made from the business
    • Understands production schedule required for market needs
    • Identifies similar products/services already in the market
    • Determines the price customers are prepared to pay
    • Shows necessary advertising and promotion for market entry

Researching the Venture's Feasibility

  • Questions for Feasibility Study:
    • How should the business be started?
    • Is this a good business idea or a hobby?
    • Is the market ready for the product/service?

The Feasibility Study Procedure

  • Information search should continue despite perceived overwhelm, not be overlooked.
  • The study should be conducted timely, objectively, and with appropriate skills/expertise.

The Goal:

  • Is the business idea viable?
  • What plan of action is needed to make it work?

4 Elements of the Feasibility Study

  • Market Feasibility (analysis of market size, composition, tastes, attitudes, preferences, demand, and consumer income)
  • Technical Feasibility (skills and abilities to carry out the business; special equipment, machinery, and technical know-how required to produce; and source for obtaining equipment)
  • Operational Feasibility (considering aspects of business operations, securing supplies, staffing, and quality/cost control)
  • Financial Feasibility (analyzing business's financial needs and how those needs can be met; including securing loans and equity contributions)

Competitor Analysis

  • Identify current competitors
  • Assess their resources, strengths, and weaknesses
  • Predict their response to new venture entry
  • Identify potential competitors and ways to co-opt them by forming alliances

Strategies that Capture Opportunities: Peter Drucker's Generic Competitive Strategies

  • Seek an advantage in cost or competition
  • Cost-Advantage Strategy (becoming a lower-cost producer)
  • Marketing-Advantage Strategy (emphasizing product uniqueness)

Laying the Foundation to Competitive Advantage

  • Competitive advantage exists when a firm produces a product/service better than competitors'
  • Owner needs to understand the environment for successful operation

Competitive Advantage Components

  • Unique service features
  • Notable product attributes
  • Customer service
  • Price/value
  • Accessibility

Methods for Generating Ideas

  • Look at trends in the economy
  • Look at community needs
  • Note changes causing difficulty for people
  • Pay attention to people's comments and suggestions
  • Read newspapers/listen to radio/watch TV
  • Analyze consumer habits (time spent, fashion, eating preferences)
  • Use methods like focus groups, brainstorming, problem inventory analysis, reverse brainstorming, and others (e.g., Gordon Method, Checklist Method, Free Association, Collective Notebook Method)

The Feasibility Study Procedure - Methods

  • Methods allow for primary and secondary data collection

    • Primary Data: Obtained first-hand, according to the study's design
    • Secondary Data: Previously obtained data accessible for study use

Primary Data Collection Methods

  • Observation (natural activities)
  • Experimentation (testing cause/effect)
  • Surveys/interviews (gathering information from representatives)
  • Focus groups (interactive discussions with representatives)

Secondary Data Collection Sources

  • Government publications
  • Periodicals, books, magazines
  • Commercial research data
  • Company reports, brochures, and handbooks

Questionnaire Design

  • Design questionnaire/interview tool carefully for accuracy and relevance
  • Include specific questions, clear wording, and accurate sequencing
  • Avoid irrelevant questions, and ensure important questions are included.
  • Closed-ended questions (with pre-set responses) vs. Open-ended questions (allowing respondents to answer in their own words)

Analysis of Findings

  • Analyze results based on the feasibility study goals
  • Draw appropriate conclusions
  • Develop specific recommendations

Market Research Elements

  • Target population
  • Sample selection
  • Objectives
  • Methodology
  • Findings
  • Analysis
  • Conclusion and recommendations
  • Appendices (supporting materials)

The Results

  • Assess findings based on study goals
  • Draw conclusions, making appropriate inferences based on data
  • Develop recommendations based on the study's framework
  • Use statistical methods for data tabulation (pie charts, bar graphs, pictograms, tables, line charts)

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Related Documents

Feasibility Study Lessons 4 & 5 PDF

Description

Explore key concepts from Lectures 4 and 5 on feasibility studies in entrepreneurship. This quiz covers the importance, procedure, and elements of conducting feasibility studies, along with understanding business models and minimizing risks. Test your knowledge on how effective feasibility studies contribute to the success of a business.

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