Barringer e4 Ppt 03GE
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Transcript of Barringer e4 Ppt 03GE
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5/18/2018 Barringer e4 Ppt 03GE
1/38Copyright 2012 Pearson Education
Chapter 3
Feasibility Analysis
Bruce R. Barringer
R. Duane Ireland
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Chapter Objectives1 of 3
1. Explain hat a feasibilit! anal!sis is and h! it"si#portant.
$. Discuss the proper ti#e to co#plete a feasibilit!
anal!sis hen developing an entrepreneurial venture.
3. Describe the purpose of a product%service feasibilit!
anal!sis and the to pri#ar! issues that a proposed
business should consider in this area.
&. Explain a concept state#ent and its co#ponents.'. Describe the purpose of a bu!ing intentions surve! and
ho it"s ad#inistered.
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Chapter Objectives$ of 3
(. Explain the i#portance of librar!) Internet) and
gu#shoe research.
*. Describe the purpose of industr!%#ar+et feasibilit!
anal!sis and the to pri#ar! issues to consider inthis area.
,. Discuss the characteristics of an attractive industr!.
-. Describe the purpose of organiational feasibilit!anal!sis and list the to pri#ar! issues to consider
in this area.
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Chapter Objectives3 of 3
1/. Explain the i#portance of financial feasibilit!
anal!sis and list the #ost critical issues to consider
in this area.
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0hat Is easibilit! 2nal!sis
easibilit! 2nal!sis
easibilit! anal!sis is the
process of deter#ining hether
a business idea is viable.
It is the preli#inar! evaluation of a business idea) conducted
for the purpose of deter#ining
hether the idea is orth
pursuing.
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0hen 4o Conduct a easibilit! 2nal!sis
5 4i#ing of easibilit! 2nal!sis
6 4he proper ti#e to conduct a feasibilit! anal!sis is earl! in
thin+ing through the prospects for a ne business.
6 4he thought is to screen ideas before a lot of resources arespent on the#.
5 Co#ponents of a 7roperl! Conducted easibilit!
2nal!sis
6 2 properl! conducted feasibilit! anal!sis includes fourseparate co#ponents) as discussed in the folloing slides.
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easibilit! 2nal!sis
Role of feasibilit! anal!sis in developing business ideas.
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or#s of easibilit! 2nal!sis
7roduct%8ervice easibilit!
Organiational easibilit!
Industr!%4arget 9ar+et
easibilit!
inancial easibilit!
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Outline for a Co#prehensive easibilit!
2nal!sis
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7roduct%8ervice easibilit! 2nal!sis1 of $
7roduct%8ervice
easibilit! 2nal!sis
7urpose
Is an assess#ent of the overall
appeal of the product or service
being proposed.Before a prospective fir# rushes
a ne product or service into
develop#ent) it should be sure
that the product or service is hat
prospective custo#ers ant.
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7roduct%8ervice easibilit! 2nal!sis$ of $
Co#ponents of product%servicefeasibilit! anal!sis
7roduct%8erviceDesirabilit!
7roduct%8erviceDe#and
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7roduct%8ervice Desirabilit!1 of 3
Does it #a+e sense Is it reasonable Is it so#ething consu#ers
ill get excited aboutDoes it ta+e advantage of an environ#ental trend) solve a
proble#) or ta+e advantage of a gap in the #ar+etplace
Is this a good ti#e to introduce the product or service to the
#ar+et2re there an! fatal flas in the product or service"s basic design
or concept
irst) as+ the folloing :uestions to deter#ine the basicappeal of the product or service.
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7roduct%8ervice Desirabilit!$ of 3
5 8econd) 2d#inister a Concept 4est6 2 concept state#ent should be developed.
6 2 concept state#ent is a one;page description of a business
that is distributed to people ho are as+ed to provide
feedbac+ on the potential of the business idea.
6 4he feedbac+ ill hopefull! provide the entrepreneur
before proceeding further.
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7roduct%8ervice Desirabilit!3 of 3
?e @enture
itness Drin+"s
Concept 8tate#ent
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7roduct%8ervice De#and1 of (
5 7roduct%8ervice De#and6 4here are to steps to assessing product%service de#and.
6 8tep 1< 2d#inister a Bu!ing Intentions 8urve!
6 8tep $< Conduct Aibrar!) Internet) and u#shoe research
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5 Bu!ing Intentions 8urve!6 Is an instru#ent that is used to gauge custo#er interest in a
product or service.
6 It consists of a concept state#ent or a si#ilar description of
a product or surve! ith a short surve! attached to gauge
custo#er interest.
6 Internet sites li+e 8urve!9on+e! #a+e ad#inistering a
bu!ing intentions surve! eas! and affordable.
7roduct%8ervice De#and$ of (
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7roduct%8ervice De#and3 of (
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7roduct%8ervice De#and& of (
5 Aibrar!) Internet) and u#shoe Research
6 4he second a! to assess the de#and for a product or
service is b! conducting librar!) Internet) and gu#shoe
research.6 Reference librarians can often point !ou toard resources
to help !ou investigate a business idea) such as industr!;
specific trade journals and industr! reports.
6 Internet searches can often !ield i#portant infor#ationabout the potential viabilit! of a product or service idea.
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7roduct%8ervice De#and' of (
u#shoe Research
Explanation
2 gu#shoe is a detective or an
investigator that scrounges around
for infor#ation or clues herever the! can be found.Be a gu#shoe. 2s+ people
hat the! thin+ about !our product
or service idea. If !our idea is to
sell educational to!s) spend a ee+ volunteering at a da! care center
and atch ho children interact
ith to!s.
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7roduct%8ervice De#and( of (
One of the #ost effective
things an entrepreneur
can do to conduct a thorough product%service
feasibilit! anal!sis is to
hit the streets and tal+ to
potential custo#ers.
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Industr!%4arget 9ar+et easibilit! 2nal!sis1 of $
Industr!%4arget 9ar+et
easibilit! 2nal!sis
7urpose
Is an assess#ent of the overall
appeal of the industr! and the
target #ar+et for the proposed business.2n industr! is a group of fir#s
producing a si#ilar product or
service.
2 fir#"s target #ar+et is theli#ited portion of the industr! it
plans to go after.
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Industr!%4arget 9ar+et easibilit! 2nal!sis$ of $
Co#ponents of industr!%target #ar+etfeasibilit! anal!sis
Industr! 2ttractiveness 4arget 9ar+et2ttractiveness
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Industr! 2ttractiveness1 of $
5 Industr! 2ttractiveness
6 Industries var! in ter#s of their overall attractiveness.
6 In general) the #ost attractive industries have the
characteristics depicted on the next slide.6 7articularl! i#portantthe degree to hich environ#ental
and business trends are #oving in favor rather than against
the industr!.
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Industr! 2ttractiveness$ of $
52re !oung rather than old
52re earl! rather than late in their life c!cle
52re frag#ented rather than concentrated
52re groing rather than shrin+ing
52re selling products and services that custo#ers =#ust have> rather than
=ant to have>
52re not croded
5ave high rather than lo operating #argins
52re not highl! dependent on the historicall! lo price of +e! ra #aterials
Characteristics of 2ttractive Industries
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4arget 9ar+et 2ttractiveness
5 4arget 9ar+et 2ttractiveness
6 4he challenge in identif!ing an attractive target #ar+et is
to find a #ar+et that"s large enough for the proposed
business but is !et s#all enough to avoid attracting largerco#petitors.
6 2ssessing the attractiveness of a target #ar+et is tougher
than an entire industr!.
6Often) considerable ingenuit! #ust be e#plo!ed to findinfor#ation to assess the attractiveness of a specific target
#ar+et.
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Organiational easibilit! 2nal!sis1 of $
Organiational easibilit!
2nal!sis
7urpose
Is conducted to deter#ine
hether a proposed business has
sufficient #anage#ent expertise) organiational co#petence) and
resources to successfull! launch
a business.ocuses on non;financial resources.
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Organiational easibilit! 2nal!sis$ of $
Co#ponents of organiationalfeasibilit! anal!sis
9anage#ent 7roess Resource 8ufficienc!
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9anage#ent 7roess
5 9anage#ent 7roess6 2 proposed business should candidl! evaluate the proess)
or abilit!) of its #anage#ent tea# to satisf! itself that#anage#ent has the re:uisite passion and expertise to
launch the venture.6 4o of the #ost i#portant factors in this area are because it"s a tool that can be usedin the initial pass at deter#ining the feasibilit! of a
business idea.
6 If a business idea cuts #uster at this stage) the next step is
to co#plete a business plan.
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C i ht 2012 P Ed ti
!"" rights reser#ed$ %o part o& this pu'"ication (ay 'ereproduced) stored in a retrie#a" syste() or trans(itted) in
any &or( or 'y any (eans) e"ectronic) (echanica")photocopying) recording) or other*ise) *ithout the prior*ritten per(ission o& the pu'"isher$ Printed in the +nited
,tates o& !(erica$
Copyright 2012 Pearson Education
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