Professional Documents
Culture Documents
Chapter 3
Modified from Barringer and Ireland (2006)
Feasibility Analysis
Figure 3.1 Role of feasibility analysis in developing successful business ideas
Industry/Market Feasibility
Three primary issues a proposed business should consider:
Industry attractiveness Market timeliness Identification of a niche market.
Organizational Feasibility
There are two primary issues to consider in this area:
Management prowess Resource sufficiency
Financial Feasibility
The most important issues to consider at this stage are:
Capital requirements Financial rate of return Overall attractiveness of the investment
Industry/Market Feasibility
Three primary issues a proposed business should consider:
Industry attractiveness Market timeliness Identification of a niche market.
Organizational Feasibility
There are two primary issues to consider in this area:
Management prowess Resource sufficiency
Financial Feasibility
The most important issues to consider at this stage are:
Capital requirements Financial rate of return Overall attractiveness of the investment
Product/Service Feasibility
Product/Service Feasibility Analysis
Assessment of overall appeal of proposed product/service
Main idea: before rushing to development, be sure product/service is what prospective customers want
2. Usability testing
Iterative in nature
Also called: user tests, beta tests, or field trials
http://scholar.google.com
the-life research)
service offerings
iPod accessories
Industry/Market Feasibility
Three primary issues a proposed business should consider:
Industry attractiveness Market timeliness Identification of a niche market.
Organizational Feasibility
There are two primary issues to consider in this area:
Management prowess Resource sufficiency
Financial Feasibility
The most important issues to consider at this stage are:
Capital requirements Financial rate of return Overall attractiveness of the investment
If its a breakthrough product/service (e.g., Yahoo with internet search engines, eBay with online auctions, etc.) ask:
Can we capture a first-mover advantage?
Example: Microsoft in computer operating systems
Industry/Market Feasibility
Three primary issues a proposed business should consider:
Industry attractiveness Market timeliness Identification of a niche market.
Organizational Feasibility
There are two primary issues to consider in this area:
Management prowess Resource sufficiency
Financial Feasibility
The most important issues to consider at this stage are:
Capital requirements Financial rate of return Overall attractiveness of the investment
Ventures with established networks have an advantage Successful Example: eBay Failed Example: Garden.com (e.g., no gardening/ gardening retail expertise
To test resource sufficiency: list critical nonfinancial resources needed to move idea forward successfully
If resources not available, it may be impractical to proceed with the business idea
Industry/Market Feasibility
Three primary issues a proposed business should consider:
Industry attractiveness Market timeliness Identification of a niche market.
Organizational Feasibility
There are two primary issues to consider in this area:
Management prowess Resource sufficiency
Financial Feasibility
The most important issues to consider at this stage are:
Capital requirements Financial rate of return Overall attractiveness of the investment