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Questions and Answers
What is the primary purpose of feasibility analysis in the new business creation process?
What is the primary purpose of feasibility analysis in the new business creation process?
Which feasibility component assesses whether a product is appealing to customers?
Which feasibility component assesses whether a product is appealing to customers?
What is included in a concept statement for testing product/service desirability?
What is included in a concept statement for testing product/service desirability?
How can the demand for a product/service be assessed?
How can the demand for a product/service be assessed?
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In what step of the new business creation process is the feasibility analysis conducted?
In what step of the new business creation process is the feasibility analysis conducted?
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Which aspect is NOT typically evaluated during product/service demand testing?
Which aspect is NOT typically evaluated during product/service demand testing?
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What do participants in the concept statement survey primarily offer?
What do participants in the concept statement survey primarily offer?
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Which of the following is a key consideration in assessing product/service desirability?
Which of the following is a key consideration in assessing product/service desirability?
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Which factor is NOT considered when assessing industry attractiveness?
Which factor is NOT considered when assessing industry attractiveness?
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What is the significance of management prowess in evaluating a venture?
What is the significance of management prowess in evaluating a venture?
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Which aspect is crucial to consider when determining target market attractiveness?
Which aspect is crucial to consider when determining target market attractiveness?
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What is NOT a non-financial resource important for resource sufficiency?
What is NOT a non-financial resource important for resource sufficiency?
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Which financial feasibility aspect involves assessing how much cash is required to start a business?
Which financial feasibility aspect involves assessing how much cash is required to start a business?
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What is a primary method to evaluate overall financial attractiveness?
What is a primary method to evaluate overall financial attractiveness?
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Which resource is NOT typically considered 'key' when assessing resource sufficiency?
Which resource is NOT typically considered 'key' when assessing resource sufficiency?
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Which question should be asked to evaluate the potential for market growth?
Which question should be asked to evaluate the potential for market growth?
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Study Notes
Feasibility Analysis
- Feasibility analysis is a process to determine if a business idea is viable.
- It involves assessing various aspects of the idea, including the product or service, the industry/market, organizational resources, and financial projections.
Content
- Feasibility analysis itself is a key part.
- Product/service feasibility considers if the product/service is desirable to potential customers and if there is market demand.
- Industry/target market feasibility evaluates the attractiveness of the industry and the target market segment.
- Organizational feasibility assesses if the organization has adequate management skills and resources.
- Financial feasibility evaluates the financial viability of the business idea.
New Business Creation Process
- Recognizing a business idea is the first step.
- Testing the feasibility of the idea is next, to see if the idea is good.
- Writing a business plan follows.
- Launching the business is the final step.
Product/Service Feasibility
- Key questions to assess product/service desirability:
- Does the product/service make sense and excite customers?
- Does it leverage an environmental trend, solve a problem, or fill a market gap?
- Is the timing right to introduce the product/service?
- Are there any critical flaws in the product design?
- To test desirability, create a concept statement and get feedback from 10+ industry experts.
- Product/service demand needs testing:
- Will customers be willing to buy the product/service?
- How much would they be willing to pay?
- Determine if there is existing demand for similar products.
- To test demand, use a buying intention survey of 20-30 potential customers to gauge their willingness to purchase and the price point they are comfortable with. Review purchase statistics from industry literature and/or the internet.
Industry/Target Market Feasibility
- Industry attractiveness factors:
- Is the industry young?
- Is the industry early in its life cycle?
- Is the industry growing?
- Is the industry not yet overcrowded?
- Does the industry have high operating margins?
- Test industry attractiveness by considering Porter's Five Forces: threat of new entrants, threat of substitutes, rivalry among competitors, bargaining power of buyers, and bargaining power of suppliers.
- Target market attractiveness factors include assessing market size and buying power, market trends, and potential for growth.
- Use market size categories of TAM, SAM, and SOM to determine the size of the market.
Organizational Feasibility
- Key elements for assessment:
- Management prowess - assess the passion, expertise, networks, and critical personnel (founders/partners) involved in the organization.
- Resources sufficiency - whether resources/infrastructure such as office space, lab space, manufacturing locations, and skilled personnel are available/sufficient.
- Key considerations include IP protection and government support.
Financial Feasibility
- Key testing aspects:
- Total startup cash - determine total funds required for launching the business and outlining the funding sources
- Evaluating the financial performance of similar businesses - use established business reports and research data
- Assess overall financial attractiveness - compare the expected ROI to the investments required
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Description
This quiz covers the key aspects of feasibility analysis essential for determining the viability of a business idea. Topics include product/service feasibility, market attractiveness, organizational resources, and financial projections. Engage with the content to better understand the steps needed in the new business creation process.
