EXCPR™: Feasibility Study

Feasibility study

Feasibility study is one of the significant business and management tools that will study the idea of a business in an integrated way, before proceeding with the implementation stage, thus maintaining the various sources of production - raw materials, labor, and machinery. Therefore, the feasibility study is important as it is the key sign to move forward with the implementation phase of the project and to continue it or not, it is thus considered the limit to continue the implementation of the project before it is actually launched.

Components

The feasibility study consists of key sectors, namely the study of the idea of the project, market analysis, administrative aspect, operational aspect, competitive analysis, marketing analysis, in addition to the financial aspect of the project.

Project idea

Successful projects are based on meeting the customer needs in the target market. Since it is known that customers are looking for competitive prices, high product quality, more options, high speed, etc., the idea of the project must be studied and production lines developed towards meeting those desires. Studying this aspect of the project is also important, as it bets on customers buying the new product, which requires more time to solve such problems.

Market analysis

The market analysis aspect of the feasibility study is based on measuring the number of customers who have shown willingness to buy the new product, which contributes to calculating the market size. The larger the market, the more it will contribute to its entry and competition. The rapid growth of the target market would also give real strength to actual investment with such promising projects. The market analysis aspect also helps entrepreneurs and business owners to choose a specific segment of the total market, this is towards meeting their common needs on an ongoing basis. This aspect also makes the financial value that customers will pay for the acquisition of the new product, thereby calculating operational capacity, and measuring the total expected sales volume. This part of the feasibility study selects the product pricing strategy by choosing the size of the value added, the increase in the value of total costs, or the prices of competitors in the market. This aspect can also include the times when customers order the product, who is primarily responsible for making the purchase decision, the mechanism of developing production lines, reassure and development, etc.

Administrative aspect

This part of the study charts the general strategies of the company, from strategic and annual objectives, towards achieving the mission for which the company was founded. This section also examines the types of commercial and legal licenses necessary to operate the project before state institutions and other official entities. This part of the study also deals with the size of the employment to be employed, the necessary skills required, organizational structure, roles and tasks, the recruitment mechanism, as well as development and training.

Competitive analysis

This aspect is based on increased expected sales and continued competition in the markets towards staying there for longer. The study is based on an analysis of the competitive advantage of the new company in managing its business, as well as SWOT analysis of Strengths/Weaknesses, future Opportunities and anticipated attacks- Threats on the project. The competitive analysis aspect also includes the study of competitors in terms of their advantages and weaknesses, as well as their market share. This aspect of the feasibility study is the basis for understanding the next aspect - the operational aspect.

Operational aspect

The operational part of the study is based on employing and managing all types of different production sources towards creating a product that will meet the requirements of customers in the target market. This aspect will therefore include identifying the materials and tools to be used in operational processes, labor, location, and the capacity of the production process. This aspect of the economic seriousness study also searches for suppliers who will be relied upon to import materials important to the project.

Marketing analysis

It is one of the aspects that distinguishes companies from others in competition and staying in the market for longer. The importance of this aspect lies in maintaining the expenses invested to take out the commercial product to customers, and to maintain the market value of the company. This aspect includes the selection of the best strategies for promotional operations such as advertising, product aggregation strategy, customer value-added, and others. Marketing analysis also examines the best ways to communicate with customers such as direct selling, retail, or wholesale. This aspect is concerned with identifying the mechanism for dealing with customers and after-sales service, which will keep this business under construction.

Financial analysis

The last section in the feasibility study is dealing with the figure and data in details. Therefore, after complete all previous sections in the feasibility study, then it is necessary to convert those results and aggregated data into financial indicators that are easy to understand and deal with, in addition to the calculating fixed and variable costs. The importance of this aspect of the study is that it includes the capital of the project required, and the mechanism of disbursement of those financial resources, which financial institutions and banks in particular are looking for. The presence of more financial indicators in this aspect, such as zero checks to cover break-even point expenses, capital recovery period, and others, will achieve a thorough understanding of the success of this business process among different stakeholders.

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