Faculty of Commerce & Economics
Feasibility analysis is the process of determining if a business idea is viable. As shown in Figure 3.1, the most effective businesses emerge from a process That includes (1) recognizing a business idea, (2) testing the feasibility of the Idea, (3) writing a business plan, and (4) launching the business.
Fig.3.1 Entrepreneurship, Successful Launching New Ventures,4th edition(2012),by R. Barringer & R. Duane Ireland(Pearson).
Part 1: Product/Service Feasibility
A. Product/service desirability
B. Product/service demand
Part 2: Industry/Target Market Feasibility
A. Industry attractiveness
B. Target market attractiveness
Part 3: Organizational Feasibility
A. Management prowess
B. Resource sufficiency
Part 4: Financial Feasibility
A. Total start-up cash needed
B. Financial performance of similar businesses
C. Overall financial attractiveness of the proposed venture
So one of an interesting stories that tells us about how much the feasibility analysis is important and curial in a new product or service launching is Tom Patterson story.
I will discuss in briefly the issues that were addressed in this case:
Tom Patterson who is a Medical Device Salesman, was the founder of Tommy John’s undershirts.
Actually in my opinion Tom Patterson had successfully lunched his new product and that’s because he had done a good feasibility analysis which will be explained bellow:
Product/service desirability(the need):
Tom was always frustrated because he found himself constantly tucking his undershirt into his pants. And the boiling point or the turning point was when he stepped out of the car and found his undershirt untucked and bunched up that’s because it was too baggy, too boxy, and too short and didn’t fit well from that day Tom started to ask and search about an undershirt that’s fit very well.
Tom had conducted many Primary and Secondary Research to determine the demand for his product:
“Patterson went to several department stores and asked sales clerks if they carried men’s undershirts that would solve his problem. None of them did. One clerk even told Patterson that if he found a solution to let him know—he’d like to buy the undershirts too” from this Tom had recognized that he must follow up by sketching the type of the undershirt that he wanted.
1. Tom Patterson asked the tailor in dry cleaner to make him a prototype and a 15 for his friends and family to try out the undershirts and tell him what they thought. 2. They loved it and some even wanted to order more.
3. He bought 200 more undershirts.
4. He found an attorney to patent it.
5. Online research shows that the men’s undergarments market is a $30 billion industry worldwide.
Primary Research by Watching Customers:
Tom Patterson spent many hours at department stores watching people buy the men’s undershirts. He drew two major conclusions:
1. People either bought quickly or they didn’t know which alternatives to buy. Those who bought quickly went for the brand they’ve been buying for years. 2. Men only buy undershirts for 17 years in their lifetime. From birth to 17, their mothers will buy their undershirts. From age 34 on, their wives by for them. Thus he concluded that women are the majority of the buyers –not men!
Industry/Target Market Feasibility:
•Opportunity: No stores offer an undershirt that solved this problem. Niche: Affordable undershirts that has a perfect combination of fit, comfort, breathability, and style. •Market: Women buying their kids, boyfriends, husbands undershirts. •Mission:
“Renowned for its innovative fit, feel, and functionality, Tommy John is the solution for the modern man who desires luxurious clothing at an affordable price.”
References: Entrepreneurship, Successful Launching New Ventures,4th edition(2012),by R. Barringer & R. Duane Ireland(Pearson).
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