Lesson 7: Feasibility Study

Topic: Feasibility Study

Learning Outcomes: At the end of this module, you are expected to:

 Identify What is a Project Feasibility Study?

 Enumerate the Steps to a Project Feasibility Study
 Understand Business Plans and know How to Develop a Feasibility Plan
 Be knowledgeable with Feasibility Plans for Small Businesses

LEARNING CONTENT

Introduction:

In this lesson, we'll be looking at a project feasibility study, which is one tool that many organizations use to
determine if the costs and risks of a project outweigh the benefits, or if a project is even viable.

What is a Project Feasibility Study?

Before planning any project, you must ask the question - Can this project be successful? If the answer is no,
then the project should not commence. If there is only a very slight possibility for project success, then it is also
unlikely the project should go ahead.

Some questions to ask in order to consider whether a project can be successful include:

 Is it technically possible?
 Is it achievable within budget?
 Will it do what it is supposed to do (e.g. make a profit)?

In order to answer these critical questions, a project feasibility study must be conducted. The project
feasibility study is a document containing a detailed description of the project, followed by a set of different
feasibility areas. These are aspects of the project that will drive the success or failure of the project. This study
will provide the necessary information so that you can decide whether or not your project will begin or whether
it has a shot at success.

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Lesson Proper:

Steps to a Project Feasibility Study

1. Description of the Project - What are the important details of the project?
The project feasibility study should start with the basic details of the project and provide a purpose or
goal for the project.

A project description must include a detailed description of the project scope and what the project will
do and how it will do it. Also included is information regarding the stakeholders; those who have a
vested interest in the project or will be impacted by the project. The description of the project should
contain a relatively detailed timeline and task breakdown, including what will be done, when, and by
whom. It is also important to detail the end result of the project. What will the project produce or create
for the company?

2. Market Feasibility - Does anyone need this product or service?

Does anybody want this product or service? Will anybody use it? Is there a similar product/service
currently available that will prevent project success? If your project assumes customers will pay for use
of a product/service, you must ensure that the market exists.

Where necessary, you must identify a pricing model and ensure similar products/services are not
currently available at a lower price.

If you continue with the project, investing time, money and resources, and nobody pays for the service,
the project will be a failure.

3. Technical Feasibility - Is the project even possible?

Is it even possible to create this product/service? Do you have the necessary expertise or technical
resources (hardware/software)? Does the project rely on 3rd party products that do not already exist?
For example, if your project scope requires a fridge that talks and walks, then your project is unfeasible
since a walking, talking fridge does not exist. Assuming, of course, that a walking, talking fridge is
outside the scope of your current project!

Also, to be considered are logistical or geographical requirements of your project. For example, do you
need resources in foreign countries; do you need bigger buildings?

4. Financial/Economic Feasibility - Do we have the money to complete the project?

You have determined that your project is technically feasible, and there is a market for your product or
service. The next question is - will the project be prohibitively expensive? That is, will there be sufficient
budget for your project? You will need to conduct a primary investigation into how expensive the project
may be.

Sample questions include:

 How many resources will I need?

 How long will it take to create this product/service?
 What additional resources does the project need (cars, software licenses, hardware)?
 A high-level budget is essential in order to determine project feasibility.

5. Organizational/Managerial Feasibility - Do we have the right people to complete the project?

Who will manage and who will work on scheduled tasks? Project feasibility requires matching skillsets
to individuals in order to ensure you have the correct expertise in order to actually do the project. This
may introduce other project features; for example, outsourcing, which brings with its additional
operational overhead.
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Project feasibility should also be forward-looking. For example, if the project requires continuing management
after it has been completed, those resources must be available.

Business Plans: How to Develop a Feasibility Plan

Developing a feasibility plan is essential for a

new business. In this part of the lesson, we will
discuss the purpose of market research,
competitive analysis, organizational
competence, and financial analysis.

What is a Feasibility Plan?

Melissa is an entrepreneur and has a great idea for a business. The product she is introducing will save all
information from a phone to another small device. Although this sounds like a great business, she must first
develop a feasibility plan.

Determines the issues related to a business and helps decide if the

Feasibility Plan
business has the possibility of succeeding.

Feasibility research is essential because you want to make sure your business can be successful before
putting time and money into something that is not even possible. A feasibility plan's main purpose is to
determine if the company will be at least able to meet the operating expenses.

a. Market Research
Every entrepreneur must do extensive market research to make sure their business idea will be
successful. You will also want to research the target market for the product. A target market is the
demographic of consumers that will purchase a product, which can be separated by age, sex, or
income among other categories. An entrepreneur must also take into consideration if there is an actual
demand for the business venture they want to start.

b. Competitive Analysis
It is important as an entrepreneur to analyze who your competitors are and if you can differentiate
yourself from those businesses by developing features or benefits that will set you apart from the
competition. You want to stand out and want consumers to remember your business compared to your
competition.

c. Organizational Competence
A good example of organizational competence would be a company that continues to stay innovative.
Apple is always introducing new products and technology, which makes innovation an organizational
competence.

d. Financial Analysis

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The next item that needs to be determined is how much it costs to run the business on an on-going
basis. As a business owner, you want to make sure you are making money and not losing it. Making a
revenue projection will help determine how much money the company will make each month. Every
business must also do a profitability analysis to help learn if they will make enough money to cover any
expenses. It is possible that at first companies may lose some money or break even, but the overall
goal for any business owner is to make sure they are making a profit at some future point.

What's the Purpose of a Feasibility Study?

Rather than just launching into a business idea haphazardly, a feasibility study can help take a budding
entrepreneur from a good idea to a successful business. By examining various components in a feasibility
study, such as a market evaluation and commercial feasibility, a small business owner can figure out if his or
her idea has a good chance of success.

A feasibility study can provide the following benefits before moving on to development and implementation of a
plan:
1. Examining the strengths and weaknesses of a proposed idea

2. Uncovering opportunities and threats in the market

3. Discovering the type of resources necessary to proceed

4. Identifying potential pitfalls for a new venture

Feasibility Study Components

A feasibility study touches on a variety of areas in assessing whether a good business idea has great potential.
A feasibility study commonly includes an analysis and evaluation of these categories:

1. Market feasibility: Perhaps the most important question to ask is: Is there a market for my idea? This
may include looking at the demand for your products or services, why people would purchase your item
over the competitors, your target audience, and how you plan to market yourself.

2. Commercial feasibility: It's always about the bottom line - money. A look at the commercial feasibility
of your proposal will help you analyze financing, from start-up costs to projecting sales figures.
Financial concerns to keep in mind include:

 How much money is needed to begin?

 What type of fixed and variable costs will you have?
 What type of price point can you set for your products or services?
 How much do you project to make?
 What is the return on investment?
 How much money do you need to cover living expenses?
 Are there any adverse economic situations to think about?

3. Other considerations: Market and commercial feasibility are far from the only things you need to
consider when evaluating a small business idea.

CORRESPONDENCE LEARNING MODULE

ENTR 1013 – The Entrepreneurial Mind
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Lesson: Marketing: Mindset, Market, and Message

Topic: Marketing: Mindset, Market, and Message

Learning Outcomes: At the end of this module, you are expected to:

1. Seize opportunities in the market through a proper mindset for business

2. Understand and identify target markets
3. Create a compelling message based on the brand and image of the business
4. Discuss the importance of the marketing mix and its elements

LEARNING CONTENT

Introduction:

The second gate of the 4-Gate model is marketing, which involves mindset, market and message, to
seize the golden opportunity chosen.

How would you explain marketing? The first few words that usually pop into a person's head are 'marketing
equals sales!' Marketing is NOT just personal selling or even just advertising. Most people define marketing in
a very limited way. Marketing includes activities such as public relations, sales promotion, advertising, social
media, pricing, distribution and many other functions.

Lesson Proper:

One of the biggest challenges for businesses today is attracting customers and keeping them. They do
so through effective marketing.

A Pizza Shop
Let's imagine that you want to open a pizza shop. You live in a suburban area with lots of families, so you know
that the potential market is good. You've got some savings with which to start your business, and soon, you are
the proud owner of a little shop in the center of your town. We'll call it Pizza Pizzazz.

Fast-forward three months. Your shop is still open, but with each month, your savings are dwindling because
you are not yet making enough profit from your small business to cover all the expenses. You knew it usually

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takes about six months to get a business off the ground, but now that the shop has hit its stride, you have
some time to devote to the question at hand: How can you best market Pizza Pizzazz to bring in new business
and generate a profit?

Marketing vs. Marketing Concepts

Marketing is the promotion of business products or services to a target audience. It is, in short, an action taken
to bring attention to a business' offerings; they can be physical goods for sale or services offered. Common
examples of marketing at work include television commercials, billboards on the side of the road, and
magazine advertisements.

But not all businesses approach the need to market their goods and services the same way. In fact, there are a
few different approaches to how marketing can be successful for an organization. These approaches are called
marketing concepts, or a philosophy that determines what type of marketing tools are used by a company.
Marketing concepts are driven by a clear objective that takes into account cost efficiency, social
responsibilities, and effectiveness within a particular market.

Opportunity Seizing
- Entrepreneurs need to have an innovation mindset so they can stand out in the marketplace.
- They need to identify their target market and formulate a compelling message, supported by a market-
ing mix that matches the desired customer bonding strategy that will resonate with the target market.

A thriving business is all about seizing opportunities. However, some business owners do not find it that easy
to seize opportunities, much less see them. Unfortunately, most of us people let opportunity slip-by every day
because we are untrained or unaware of the signals that life throws our way. Other times we see opportunities,
but we do not take advantage of them simply because we feel they are nothing more than problems.

Seizing opportunities: what is an opportunity?

An opportunity is anything that provides you with a chance to change your circumstances for the better. Are
opportunities everywhere? Yes and no. According to Adam Sicinski, “many of the opportunities we come
across are actually disguised as problems or hard work. However, to the untrained eye — unable to see past
the present moment — all opportunities are actually insurmountable problems that make life difficult, stressful
and hard.”

That is where the mistake is made: seeing problems as “problems” rather than challenges that test and
strengthen your determination. “The moment you shift your perspective and begin seeing your problems as
challenges is the moment you begin training your brain to spot opportunities. Problems may very well be
insurmountable. However, a challenge is something you can work with to better your current circumstances.”

As you can see, it is all about your attitude whether there are opportunities for you.

Identify the Target Market

- The more focused the target market definition, the better for the marketing communication group to
know who to send messages to and for the sales force to know who to approach.
- But keep in mind that focus is not the same as having too narrow target market that limits demand and
growth.

If you've ever felt persuaded to buy an item by an ad, you've likely been defined as part of a target market.
Though you may not know it, advertisements are created specifically for people similar to you. Now, you'll learn
how marketing firms identify a target market, create basic target market strategies and use a marketing mix for
a product or service.

Target Market
A marketing strategy is selecting and describing one or more target markets that a company's product or
service will identify for business opportunities. A target market is a defined group most likely to buy a

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company's products or services. This group usually has similar product needs, such as college students who
usually have an appetite for affordable cars, technology products, dorm room goods, etc. Once a target market
is identified by a company, a target market strategy needs to be created in order to decide on how to promote,
communicate and reach the group. There are three ways that a firm can identify target markets.

Identifying Target Markets

The first step is to conduct a MOA (Marketing Opportunity Analysis). This analysis allows companies to
investigate the potential size of the market, profitability potential, and the amount of competition. The next step
is to choose the basic target market strategy. The three strategies for selecting target markets are pursuing
entire markets with one marketing mix, concentrating on one segment, or pursuing multiple market segments
with multiple marketing mixes.

Creating a Compelling Message

Positioning is communicating to overall positive impression of a brand, relative to completion.
There are three points to remember in product and service positioning:
1. It must be relevant
2. It must be unique
3. It must be communicated

Being relevant is about identifying and solving pain points.

Being unique is about creating distinctive value compelling enough to attract customers to buy continuously.
Being unique can come in many ways depending on what is needed by the customers.

Marketing Mix

- It is more popularly known as the 4 Ps of marketing.

- A set of controllable and inter-related variables composed of product, place, price and promotions that
the company assembles to satisfy a target group.
- For service industry, there are three additional Ps namely: physical environment, people and process.

A marketing mix is the perfect selection of product, place, price and promotion strategies used to have mutually
beneficial exchanges with a target market. In the marketing world, a marketing mix is also referred to as the
Four P's. The P's being: product, place, price, and promotion. Sometimes a product will fail because just one
part of the marketing mix is incorrect.

A marketing mix must carefully be created to reach the specific target market that a company is trying to reach.
For example, there is a big difference between McDonald's and Wendy's fast food restaurants. The mixes are
carefully created to cater to cheap packaged food with family fun play areas (McDonald's) and healthier fast
food, fresh burgers made to order and no playgrounds (Wendy's).

a. Product Strategies
The heart of the marketing mix is of course the product or service. It is the beginning point of the entire
mix and strategy. When referring to a product, you also must consider the packaging, warranty, after-
sales follow-up, brand name and company name. After all, eating at TGI Friday's is a big difference
than eating at Morton's Steakhouse. All of these factors come into play when creating a product
strategy. Products can be tangible goods, such as televisions, or services, such as spa treatments.

b. Place Strategies
Where can you get the product or service? Do you need to get in your car and drive to a store? Can
you order it online? Place strategies are all about making the product or service available to the
consumers when they want and need them. Another part of the definition is that place takes into
account how the product gets to the consumer through storing, transporting, and delivering. The recent
popularity is for products to be available quickly online. Many brick and mortar stores have been driven

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out of business due to the recession and the plethora of online businesses that can reach national
consumers.

c. Promotion Strategies
The third P is promotion strategies. Promotion strategies include personal selling, advertising, public
relations, and sales promotion. Promotion's central purpose is to inform, educate, persuade and remind
consumers about products or services. An effective promotional campaign, such as the recent Old
Spice Guy ads, created a demand for deodorant very effectively.

d. Pricing Strategies
Price is the cost a consumer must pay for the product or service. It is also the most flexible of the P's.
Companies can change the price quickly to react to competitors. When one airline decides to have a
ticket sale, the other airlines immediately react to match or surpass their competitors' offerings.
Sometimes this drives the prices extremely low which ultimately benefits the consumer. Price multiplied
by the number of units equals the firm's total revenue.

e. Implementation and Control

The final part of a marketing mix is the implementation and encompasses how the plan can be
translated into actionable activities. The activities must be achievable and very detailed. The parts
included must be assignment of tasks, activities, timelines, budgets and communication between all of
the corporate departments. Control is a method of evaluating the plan to see if it was successful. Many
companies fail to conduct research on whether the plan worked or not. There are four main reasons
why a marketing plan can fail: unrealistic marketing objectives, inappropriate marketing strategies, poor
implementation, and major environmental changes that a company did not plan to happen.

Role of each Marketing Mix Element

1. Product/Service – To satisfy consumer needs and wants.

2. Price – To make product affordable to target consumers.
a. Mass market – economy premium pricing, meaning slightly higher than economy brands justi-
fied by quality dimensions and additional features but half the price of the very expensive
brands with the same or similar features.
b. Flexible – being the first to market affordable goods.
3. Place – To make product available consistent with consumers; purchasing pattern.
4. Promotions – To build and improve consumer demand. Promotions have four components called the
promotions mix.
a. Advertising – To effectively inform, persuade and remind the target consumers.
b. Sales Promotions – To convince customers to buy immediately.
c. Public relations – To offer a positive image of the company and the brand, as well as an advo-
cacy.
d. Selling – To get the customers to buy.
SERVICE
5. Physical Environment – To create the tangible expression of the brand engaging the senses through
the layout and images of the services cape.
6. People – To show a living representation of the brand promise.
7. Process – To experience how the brand delivers value.

4 Key Questions to ask in Type of Decision Marketing Mix to be used

assembling the marketing mix
1. What do I tell my target The communication channel Advertising
market? decision Public Relations
Selling
2. Where can I find my tar- The distribution channel decision Place (distribution)
get market?

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3. How will I make my target The sampling decision Promotions
market try me? Price
4. Will my product and ser- The value proposition decision Product
vice be compelling Service
enough to encourage re-
peat and referrals?

VALUE PROPOSITION

1. SUPERIOR – Better than what’s available: HIGH QUALITY – HIGH PRICE

2. PARITY – Same as what’s available: SAME QUALITY – SAME PRICE
3. INFERIOR – Not as good as what’s available: LOWER QUALITY – LOWER PRICE
4. DIFFERENT – Different from what’s available: Can be higher or Lower Price

DEVELOP A BRAND NAME

- Good branding are easy to pronounce, easy to remember and helps in the brand positioning
process.

MARKETING MIX AND PRODUCT LIFE CYCLE

Product Life Product Brand Stage of Amount of Speed in

Cycle Category Awareness Decision Information Decision
Awareness Needed Making
Introductory Low Low Extensive Large Slow
Growth High Low Limited Medium Medium
Maturity High High Routine Small Fast

CORRESPONDENCE LEARNING MODULE

ENTR 1013 – The Entrepreneurial Mind

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Lesson: Innovation

Topic: Innovation
 4 competencies of an innovator
 How to improve creativity and be an innovator
 6 tips to create an innovation mindset
 Innovating a business model
 5 tips on innovating the business model

Learning Outcomes: At the end of this module, you are expected to:

1. Identify competencies of an innovator.

2. Identify ways on how to improve creativity and be an innovator

LEARNING CONTENT

Lesson Proper:

WHAT IS INNOVATION?

Innovation
- It is about a new way of doing things with commercial success.
- It targets to solve, in a novel way, pain points of customers or non-customers who are willing to pay for
the solution, either through a product or service.
- Instead of asking the typical who, what and how questions, innovators ask who else, what else, and
how else questions to challenge assumptions, change world views and expand possibilities in order to
create new value for both the firm and the consumers.

Copy-pasters beware!!!
You can’t call yourself an
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innovator if you just copied

Waters Philippines was launched in 1995. It did not invent installment plans. It also did not invent multi-level
marketing (MLM). But Waters Philippines combined installment selling with MLM for their 3-in-1 Waters Bio
Mineral Pot home water system, a first in the industry, an innovation in its business model

Innovation in product, service or business model can be:

1. Sustaining (small incremental change)

2. Differentiated (not similar with what competitors are offering}

3. Disruptive (creating a new category preferred over existing usage)

*The higher the level of disruption in innovation, the more the innovator should be indifferent to
current rules and best practices, as a successful innovation creates new rules and next practices for
the industry.

Thinking of new ways on how to be innovative is hard. But we

don’t always have to be disruptive. Just like metal straws. There
weren’t any metal straws before, but because they wanted to be
more sustainable, they thought of a way to change how we drink.
Simple but innovative.

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When charcoal-cooked chicken with sauce was the norm, Chooks-to-Go courageously launched a no-sauce
rotisserie chicken in 2009. Bounty Fresh's basic principle when creating new products is "We will do it better,
better than what the market is offering.

No innovation can happen unless there is a new truth or an insight discovered, so entrepreneurs must hunt for
the new truths – what people like or dislike, why they feel the way (motivation), what barriers do they encounter
(tension) and why these are important.

Next we have the competencies that we need

to become a great innovator. Improve on these
and you’ll be on your way.

4 Competencies of an Innovator
1. Creativity – forming a mental image or new idea about the future.

I am a visionary? Am I able to see the big

picture where innovation can reside? Do I
challenge the status quo?

Google keeps improving their algorithm so their search engine will be superior however, Facebook saw
a different truth, that consumers will simply crowd source for recommendations instead of using the
search engine. Both of them have their own truths that cannot be ignored.

Do I understand different processes and approaches to solving

problems? Am I able to generate novel but relevant ideas to solve
problems? • Am I able to get inspiration from various industries or
situations?

2. Critical Thinking – offering unique ways to solve defined problems

The sharing economy like Uber and Grab has succeeded as a viable transportation alternative not only
because they understand consumer pain points but also understand car usage, which is only about 5%
of the time the rest of the time, cars are either parked or in traffic.

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3. Collaboration – developing relationships with the right partners to attain objectives

Do I understand the jobs-to-be-done? Am I able to define synergy

benefits and share credit with each collaborator? Am l able to have
good interdependent relationships with my collaborators?

Mansmith Young Market Masters Awards (YMMA), the only award in the Philippines recognizing out-
standing young marketers and entrepreneurs 35 years old and below, is officially endorsed by the
Philippine Retail Association and the Philippine Franchise Association. The author's marketing book,
"Principles and Practices in Marketing in the Philippine Setting" has the official endorsement of the
Philippine Marketing Association as well as the Association of Marketing Educators, while this book
"Entrepreneurship" has the official endorsement of Department of Trade and Industry (DTI) of the
Philippines and the Go Negosyo Movement.

4. Communication – engaging constituents to make them understand and accept your message

A m I able to have conversations and listen to the opinions of my

constituents? Am I able to make others see what I can see? Am I
able to get others excited about my idea on solving their problems?

Veteran media industry leader Venus Navalta established IPG Mediabrands in 2015. By 2018, their
billings put them among the Top 5, making them the fastest growing agency in the country. They have
continuously transformed from being a digital agency initially to a full-service marketing communication
agency, and marketing agency. This entails effective communication with different stakeholders, such
as owners, clients, managers and employees

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Here are some ways on how to improve our
creativity. As you can see, most of these tips are
common day to day activities.

How To Improve Creativity And Be An Innovator

Whether as entrepreneur or intrapreneur, creative thinking can help generate more innovation, a kind of input-
and-output relationship, although being creative does not automatically make one innovative. Creativity is
offering a new idea, while innovation is making the new idea come to life profitably.

A. Knowledge Update – new ideas gained from experience and/or education.

1. Read – to study diverse topics
2. Watch – to observe other categories and industries
3. Online browsing – to do social listening
B. Process – a sequence of steps to attain new ideas
4. Conversations – to have interactions with experts and those with divergent views
5. Think like a child – to be curious and keep asking questions
6. Probe – to do data gathering and look for people’s motivations and deeper meanings
7. Rest and recreation – to have a well-rested mind and welcome ideas with clarity
C. Reflections 0 serious thinking about a particular problem or idea to increase and retain creative profi -
ciency
8. Openness – to listen to the opinions and ideas of others
9. Mind mapping – to have a process of organizing information
10. ME time – to practice tasks and habits regularly
D. Experiences – actual encounters with subjects
11. Inspiration – to be mentally stimulated with different sources like visuals, plays, etc.
12. Travel – to take trips especially in trend hubs, to observe new ideas in other places.

8 Tips To Create An Innovation Mindset

Many companies like to have more innovation, but are dissatisfied with their efforts. Firms wanting
improvement might want to look into their innovation culture. Culture is what people say or do when bosses
are away. This is the real norm in a company

1. Hiring – recruit some people who are non-conformists with uncommon sense instead of acquiring the
usual people with familiar skill sets and common sense.
2. Training – create innovation competency by providing tools, frameworks and methods that are duplica-
ble, ending with an annual innovation tournament.
3. Idea channel and champion – provide employees a “safe place” to have the option to submit to a high-
level innovation executive, if their immediate superior would turn down a major proposal which they be-
lieve has high potential.
4. Behavioral requirement – establish innovation as a pre-requisite for promotion and merit raise on top of
revenue and profit growth.
5. Focus – mull over business model innovation, instead of just product and process innovation.
6. Bottom line – look on long-term effect of market penetration, and not just short-term market shares as a
key performance indicator.
7. Reward and recognition – create a climate where innovation is rewarded or recognized.
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8. Time – allow specific time for people to work on focused innovation projects during regular work hours.

*** END of LESSON***

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