INDUSTRY FEASIBILITY ASSESSMENT

YOURE 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 firms 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!

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?

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.

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).

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

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?