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INDUSTRY FEASIBILITY ASSESSMENT

INDUSTRY FEASIBILITY ASSESSMENT. YOU’RE NOT CURRENTLY OPERATING IN THIS INDUSTRY, BUT YOU WOULD LIKE TO ENTER. NECESSARY STEPS: 1. COMPLETE AN ENVIRONMENTAL ASSESSMENT Industry overview Competitive environment Macro environment Generate likely environmental scenarios

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INDUSTRY FEASIBILITY ASSESSMENT

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  1. INDUSTRY FEASIBILITY ASSESSMENT YOU’RE NOT CURRENTLY OPERATING IN THIS INDUSTRY, BUT YOU WOULD LIKE TO ENTER. NECESSARY STEPS: 1. COMPLETE AN ENVIRONMENTAL ASSESSMENT Industry overview Competitive environment Macro environment Generate likely environmental scenarios Identify key success factors in the industry 2. STUDY 3 OR MORE FIRMS THAT OPERATE IN THE INDUSTRY Scrutinize each firm’s operations Identify its strengths, weaknesses and competitive advantages 3. BUILD A FAVORABLE FEASIBILITY ARGUMENT Identify and justify a master strategy and plan Gather evidence that each feasibility criterion can be met Has sufficient proof been found to start this business? Convince me!

  2. ENVIRONMENTAL ASSESSMENT A) THE COMPETITIVE ENVIRONMENT (OUTLINE OPPORTUNITIES AND THREATS) How big is the industry? ..How many segments? ..How large is each? Who are the largest competitors? …Which segments are they in? Are there vacant niches? …Are needs and clients being neglected? In general, what is the competitive environment like in this industry? Clearly reveal the opportunities and threats? B) THE MACRO ENVIRONMENT (OUTLINE OPPORTUNITIES AND THREATS) Political currents (supports, controls, pending legislation) Economic factors (inflation, productivity, unemployment) Socio-cultural/demographic shifts and changes Technological changes that will have impact in the industry Once again, where are the opportunities and threats?

  3. ENVIRONMENTAL ASSESSMENT -- 2 C) ENVIRONMENTAL SCENARIOS (FIVE TO SEVEN YEAR SCENARIOS) Describe 4-6 environmental/competitive trends that will evolve over the next 5-7 years. Identify optimistic and pessimistic scenarios for each. Clearly reveal the most-likely (expected) environmental/competitive scenarios to be encountered in the next 5-7 years. D) KEYS TO SUCCESS IN THIS INDUSTRY (NAME AT LEAST FIVE) What must any firm in this industry do to create a sustainable competitive advantage? Justify your claims.

  4. COMPANY EVALUATIONS 2. ASSESS AT LEAST THREE ORGANIZATIONS THAT COMPETE IN THIS INDUSTRY (REVEAL STRENGTHS, WEAKNESSES AND IMPLICATIONS FOR EACH) A) Provide a brief company background (products, locations, size, lines of business, etc) B) Evaluate financial and market performance (strength/weaknesses) C) Assess the vision, strategies, portfolios, etc. ..Is the strategy working? (strengths/weaknesses) D) Other company strengths/weaknesses assessed (personnel, resources, structure, and success in managing the task environment). E) Reveal how each firm measures up on the key success factors. F) What is the overall condition of each firm? Summarize their strengths, weaknesses, and competitive advantages (if any).

  5. FEASIBILITY STUDY CRITERIA PROVE THAT THE FOLLOWING ARE TRUE: 1. WE HAVE A UNIQUE STRATEGY THAT WILL GIVE US A COMPETITIVE ADVANTAGE 2. THERE IS SUFFICIENT DEMAND TO SUPPORT A NEW COMPANY ENTERING THIS INDUSTRY 3. AN ADEQUATE PHYSICAL FACILITY HAS BEEN DESIGNED AND A GOOD LOCATION HAS BEEN FOUND 4. OUR BASIC OPERATING PHILOSOPHY, POLICIES AND DAILY PROCEDURES HAVE BEEN DEVELOPED AND PUBLISHED IN AN OPERATING MANUAL 5. OUR STAFFING PLAN HAS BEEN FORMULATED AND QUALIFIED WORKERS ARE AVAILABLE

  6. FEASIBILITY STUDY CRITERIA -- 2 6. REALISTIC CAPITAL BUDGET ESTIMATES HAVE BEEN DEVELOPED TO COVER ALL START-UP COSTS 7. OUR OPERATING BUDGET ESTIMATES (PRO-FORMA STATEMENTS FOR 3 YEARS) SHOW A PROFIT CAN BE SUSTAINED 8. OUR DETAILED MARKETING PLAN WILL ATTRACT SUFFICIENT CUSTOMERS TO MEET REVENUE PROJECTIONS 9. OUR RISK-MANAGEMENT PLAN WILL COVER ALL POSSIBLE OPERATING EXPOSURES AND LIABILITIES 10. WE HAVE ADEQUATE FINANCIAL RESOURCES TO COVER ALL THE COSTS OF THIS VENTURE IS THERE SUFFICIENT EVIDENCE TO SAY “YES” TO EACH OF THESE CRITERIA? …DO YOU HAVE ENOUGH PROOF?

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