In order to make wise investments in a marketplace experiencing increasing levels of risk, companies are turning to feasibility studies to determine if they should offer new products, services or undertake a new business endeavor.
The purpose of a feasibility study is to determine if a business opportunity is possible, practical and viable. When faced with a business opportunity, many optimistic people tend to focus on just the positive aspects.
A feasibility study enables a realistic view at both the positive and negative aspects of the opportunity. A feasibility study is an important tool for making the right decisions. A wrong decision often leads to business failure. For example, only 50% of start-ups are still in business after 18 months and only 20% are in business after 5 years.
Feasibility studies are useful when starting a new business or identifying a new opportunity for an existing business. Ideally, the feasibility study process involves making rational decisions about a number of enduring characteristics of a project, including: * Definition of the project;
* Current market segmentation;
* Projected growth in each market segment;
* Current market offerings;
* Customer profile(s);
* Estimation of customers/revenues;
* Determination of competitive differentiation and advantage(s); * Vision/mission statement;
* Definition of proposed operations/management structure and management methods; and * Financing and projected cash flows
* Definition of Industry Analysis
* by Osmond Vitez, Demand Media
* An industry analysis is a business function completed by business owners and other individuals to assess the current business environment. This analysis helps businesses understand various economic pieces of the marketplace and how these various pieces may be used to gain a competitive advantage. Although business owners may conduct an industry analysis according to their specific...
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