What is the purpose of an industry feasibility analysis and what must be considered?
Feasibility analysis evaluates all key factors pertinent to a project, including the economic, technological, and legal aspects and project time frame — all of which help predict the likelihood of project success. Show
Feasibility analysis, also known as Feasibility Study, intends to equitably and logically examine the pros and cons of an existing or a proposed business, dangers related to the venture, required resources to carry out the operations, and eventually the probability of success. Feasibility analysis gives a clear picture of the budget required and the returns that can be expected. A feasibility study is not restricted to forecasting monetary benefits. It can be used for other purposes depending upon the target of the project and the industry to which it belongs. Here’s looking at the key pointers of a Feasibility analysis:
Four Factors Included in a Feasibility AnalysisSeveral factors are analyzed in a feasibility study, but the most critical factors that are given the top priority are listed below:
The study of the extent to which the business proposal might work for the company. It includes analyzing the common public’s ideas about the venture and how well they may receive it
the study of the rationality and practicality of a specific solution or idea and the available technological resources and proficiency in implementing the same.
The evaluation of the project deadline and the feasibility of achieving it.
This evaluates whether or not a project/ business is cost-effective. It is done by studying the budget required and forecasting the revenue from a particular project. How Does a Feasibility Study Work?The techniques of carrying out a feasibility study vary depending on the nature and goals of a project. However, there are common factors or practices involved in the feasibility analysis. Here are the steps involved in conducting a feasibility study:
Types of Feasibility AnalysisThe feasibility of a project, business, or service will be decided based on the analysis of various parameters. Some of the standard parameters are listed below:
Feasibility Study ReportAfter completing the preliminaries, a Feasibility Study Report (FSR) is generated to summarize the analysis stating if the project is feasible. An FSR also outlines alternative ways of carrying out the project with a special mention of the most befitting one. It also provides relevant background details of the project. This report helps investors decide whether to invest in a project and eventually assign project managers to carry out the same. Components of an FSRAn ideal FSR should have the following components:
Importance of a Feasible Study Report
How do you generate an FSR? Step-by-step AnalysisStep 1: Project DescriptionThis step involves collecting and listing relevant background information on the project and presenting them as a description. A crisp and vivid description makes it easy for the reader to identify the objective of FSR. Step 2: Project AlternativesIt involves analyzing alternatives and describing the possible solutions for the project. Step 3: Evaluation Criteria of AlternativesThe third step involves reporting a defined set of criteria for narrowing down the possible alternatives. The solutions must be assessed and evaluated against a set of criteria. Step 4: Suggestion of the Most Feasible SolutionPossible solutions must be studied in detail to determine if they are economically, practically, and technically feasible. It helps the company to:
The report should declare the most feasible solution and confirm that the project is cost-effective and viable. Step 5: ConclusionThe final step of writing an FSR report. It contains a summary of the project’s objective with the most feasible solution. Advantages of Conducting Feasibility Study
Feasibility Study Example: Expansion of a Clothing storeLet’s take a feasibility study example of a clothing store to understand the feasibility analysis: A clothing store is interested in expanding its place and conducts a feasibility analysis to determine if the expansion is profitable or not. The feasibility study will investigate a lot of factors:
ConclusionAll the above factors will be evaluated, and the advantages and disadvantages of the store’s expansion will be studied in detail. The results of the study will be assessed against other standard criteria to conduct a comprehensive analysis. Based on the study, a feasibility study report will be generated, which will help us decide if the expansion is profitable or not. Are you interested in learning more about feasibility analysis and other useful subjects in business analytics? Here’s upGrad’s Business Analytics Certification Program comprising 100+ hours of content, five power-packed live sessions, 3 case studies, and projects to build competence in industry-relevant tools and software. The course is designed for analytics aspirants looking to leverage Business Problem Solving, Insights and Storytelling, Exploratory Data Analysis and Statistics & Optimization, and Predictive Analytics to enhance business performance and drive growth. The many perks of the upGrad program are networking opportunities with over 40,000 paid learners, weekly doubt-clearing sessions, live lectures with top-class industry experts, and dedicated 360° career support. So, book your seat in this 3-month program now! What are the different types of feasibility analysis? There are five types of feasibility analysis: What is the primary purpose of conducting a feasibility analysis?A feasibility study is mainly conducted to evaluate the cost viability of a new business venture and ascertain the likelihood of its success. In addition to this, we also assess the practicality of the underlying technical, legal, operational, and scheduling aspects of the project. What are some feasibility study examples? Here are three examples of a feasibility study: Want to share this article? Be a Master of Business AnalyticsWhat are the 6 things to consider when analyzing feasibility?Feasibility studies should include the following steps:. Preliminary analysis. ... . Defining the scope. ... . Market research. ... . Financial assessment. ... . Roadblocks and alternative solutions. ... . Reassessment. ... . Go or no-go decision.. What is an industry market feasibility analysis?Industry/ market feasibility analysis entails an assessment of the overall appeal of an industry and the target market for the prospective business. There are two components this feasibility analysis should cover; industry attractiveness and target market attractiveness.
What are the four 4 types of the feasibility analysis?4 elements of a feasibility analysis
There are four main elements that go into a feasibility study: technical feasibility, financial feasibility, market feasibility (or market fit), and operational feasibility.
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