FeasibilityAnalysis.pdf

Feasibility Analysis Assignment Instructions

From “Preparing Effective Business Plans” by Bruce R. Barringer

Although the Full Feasibility Analysis includes four sections, we will only focus on two of those sections in this week’s assignment. The written paper is to include only the Introduction and Industry/Market Feasibility sections. Include a title page identifying the assignment title, your name, class details, and date. The objective of the assignment is to write meaningful paragraphs describing the Industry and the Target Market that will enable a reader to assess the feasibility of the proposed business. Use the Assessment tools below as a guideline for the topics to be covered in your paragraphs. However, do not simply select from the three feasibility choices provided for each topic. They are only to serve as thought starters. You are expected to write something meaningful about each applicable topic, as it pertains to your specific proposed business. No research references are required for this assignment. However, if you draw industry or market data from any published sources, be certain to cite all the details about the data that you have excerpted and indicate its source. Limit the body of your paper to approximately one page or so, double spaced. The following are suggestions on format. Use all the available space on the page for your content – don’t use headers and put all your contact and assignment information on the title page. Five paragraphs are suggested for the body of your paper (introduction, industry attractiveness, target market attractiveness, timeliness of entry, conclusion). Use the following as the template for the content of the body of your paper. However, it is not necessary to use all of these headings. They would consume too much “real estate” in your short paper. Introduction A. Name of the proposed business B. Name of the founder (or founders) C. One paragraph summary of the business

Part 2: Industry/Market Feasibility A. Industry attractiveness B. Target market attractiveness C. Timeliness of entry into the target market

Assessment Tools Industry Attractiveness

 Assess the industry your proposed business will be entering at the five-digit NAICS code level. Use a broader industry category (less NCICS digits) if necessary (http://www.census.gov/epcd/www/naicstab.htm)

 Assess the attractiveness of the industry in which the potential business plans to operate, on each of the following dimensions.

Industry Attractiveness Assessment Tool

Low Potential Moderate Potential High Potential

1. Number of competitors Many Few None 2. Age of industry Old Middle aged Young 3. Growth rate of industry Little or no

growth Moderate growth Strong growth

4. Average net income for firms in the industry

Low Medium High

5. Degree of industry concentration

Concentrated Neither concentrated nor fragmented

Fragmented

6. Stage of industry life cycle

Maturity phase or decline phase

Growth phase Emergence phase

7. Importance of industry’s products and/or services to customers

“Ambivalent” “Would like to have”

“Must have”

8. Extent to which business and environmental trends are moving in favor of the industry

Low Medium High

9. Number of exciting new product and services emerging from the industry

Low Medium High

10. Long-term prospects Weak Neutral Strong

Target Market Attractiveness

 Identify the specific market segment within your broader industry that you plan to target.

 Assess the attractiveness of the target market on each of the following dimensions. Target Market Attractiveness Assessment Tool

Low Potential Moderate Potential High Potential

1. Number of competitors in target market

Many Few None

2. Growth rate of firms in the target market

Little to no growth

Slow growth Rapid growth

3. Average net income for firms in the target market

Low Medium High

4. Methods for generating revenue in the industry

Unclear Somewhat clear Clear

5. Ability to create “barriers to entry” for potential competitors

Unable to create

May or may not be able to create

Can create

6. Degree to which customers feel satisfied by the current offerings in the target market

Satisfied Neither satisfied or dissatisfied

Unsatisfied

7. Potential to employ low cost guerrilla and/or buzz marketing techniques to promote the firm’s product or services

Low Moderate High

8. Excitement surrounding new product/service offerings in the target market

Low Medium High

Market Timeliness

 Determine the timeliness of entering a specific target market based on the following criteria.

Market Timeliness Assessment Tool

Low Potential Moderate Potential High Potential

1. Buying mood of customers

Customers are not in a buying mood

Customers are in a moderate buying mood

Customers are in an aggressive buying mood

2. Momentum of the market Stable to losing momentum

Slowly gaining momentum

Rapidly gaining momentum

3. Need for a new firm in the market with your offerings or geographic location

Low Moderate High

4. Extent to which business and environmental trends are moving in favor of the target market

Low Medium High

5. Recent or planned entrance of large firms into the market

Large firms entering the market

Rumors that large firms may be entering the market

No larger firms entered the market or are rumored to be entering the market

Note: A copy of this template, along with each of the assessment tools, is also available in PDF format at the authors’ Web site at www.prenhall.com/entrepreneurship