Technical Feasibility
A] Identification of critical technical specification comprising:
the functional design of the product adaptability to new customer demand durability reliability of performance safety reasonable utility(acceptable level of obsolescence) standardization (elimination of unnecessary variety)
Technical Feasibility
B] Examination of product-quality-cost relationship: trade-off between technical excellence and associated cost Entrepreneur should avoid unnecessary gold plating when the market situation doesnt justify it.
Technical Feasibility
C] Product testing: engineering studies relating to machinery, tools, instruments, work flow etc product development through blueprint, models, prototypes product testing through lab & field testing
Market Feasibility
A] Identifying the market potential:estimation of current demand projection of future market trends identify specific end users, major market segments, potential volume of purchasers within each market segment. Ex:- A potential manufacturer of helmets may find out the annual production of two wheelers percentage of helmets and proportion of demand already met.
Market Feasibility
B] Estimating cost-volume relationship:The price levels must reflect the value of the product The Cost-Volume Analysis would facilitate the determination of appropriate economy of scales i.e. optimum size of enterprise which has lowest average per unit cost of production & distribution. Helps ascertain how various price levels may affect the total sales volume
Market Feasibility
C] Sources of Market Info:Relevant data for market analysis can be gathered from=>Primary Sources (Interview, Questionnaire) or Secondary Sources (Govt. Agencies, Chamber of Commerce, Trade Association etc) Data relating to general economic trends-housing activity, consumer spending, inventories Pricing data-price for same, complementary, substitute products, discount structure Channels of distribution-wholesale & retail Demand pattern, seasonal variation Competitors
Market Feasibility
D] Market Testing: Displaying the product at trade fairs Test marketing to analyse the receptivity of product Sample sales
Use:
Likely sales volume & profitability Sales volume at different price levels Soundness of chosen market strategy Unknown weakness that need attention
Financial Feasibility
A] Determination of total financial requirement:Initial Expenses Fixed Investments Operational Expenditure Contingency Provision must be made for cost escalation, appropriate sales forecast should also be made. Projection could be weekly or monthly.
Financial Feasibility
B] Financial Resources & Other Costs:Short-term Resources-payable in 1 year Term LoansIntermediate term loans- available for 1-3 years(even 5) Long term loans- banks, equity capital & reinvestment of earnings C] Cash Flow Analysis D] Anticipated Return on Investment
Analysis of Competition
1. 2. direct competition from similar products indirect competition from substitutes