FEASIBILITY STUDY TEMPLATE

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FEASIBILITY STUDY
<PROJECT NAME>
COMPANY NAME
STREET ADDRESS
CITY, STATE ZIP CODE
DATE
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TABLE OF CONTENTS
!."#ecuti$e Summary......................................................................................................................%
%.Description of Products and Ser$ices...........................................................................................%
&.Technology 'onsiderations..........................................................................................................%
(.Product)Ser$ice Mar*etplace........................................................................................................&
+.Mar*eting Strategy........................................................................................................................(
,.-rganization and Staffing.............................................................................................................(
..Schedule........................................................................................................................................+
/.Financial Projections.....................................................................................................................+
0.Findings and 1ecommendations...................................................................................................,
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,% E-ECUTI.E SUMMARY
The e#ecuti$e summary pro$ides an o$er$iew of the content contained in the feasibility
study document. Many people write this section after the rest of the document is completed.
This section is important in that it pro$ides a higher le$el summary of the detail contained
within the rest of the document.
2lan3s 4est 'hocolates 524'6 is a leader in the sales of chocolates and confections
throughout the 7nited States. 24'3s products are sold from +8 stores throughout the
country and maintain a reputation for superior taste and 9uality. While 24'3s sales ha$e
grown o$er the past !8 years: the rate of growth has slowed significantly. -ne *ey factor for
this slowing growth rate is the shift in the mar*etplace to purchasing chocolates and
confections online. While 24' maintains a web site: it is not capable of hosting an e;
commerce platform for online sales. 24'3s sales occur only in its bric* and mortar facilities
and the company is losing potential customers to competitors who pro$ide online sales. The
chocolate and confections mar*etplace is healthy and shows a continued growth trajectory
o$er the ne#t fi$e to ten years. 24' is in a position to capitalize on this online mar*etplace
by le$eraging e#isting technologies: industry best practices: and an aggressi$e mar*eting and
sales campaign to ramp up the company3s growth projections for the foreseeable future.
/% DESCRIPTION OF PRODUCTS AND SER.ICES
This section pro$ides a high le$el description of the products and)or ser$ices which are being
considered as past of the feasibility study. The purpose of this section is to pro$ide detailed
descriptions of e#actly what the organization is considering so this information can be
applied to the following sections of the document. <t is important that this description
captures the most important aspects of the products and)or ser$ices that the organization is
considering as well as how it may benefit customers and the organization.
24' is considering a mo$e to create and pro$ide an online platform from which to sell its
e#isting product line. 7ntil now 24' has only sold its products from its chain of bric* and
mortar facilities and has been limited to sales within the geographical regions where its stores
reside. 4y doing so: 24' has not been able to capitalize on the growing trend of online sales
within the chocolate and confections mar*etplace. 4y offering its products through an online
platform: 24' can mar*et its products to an entirely new mar*et: increase re$enue and
growth projections: and allow customers to purchase our products from the con$enience of
their own homes.
There are no proposed changes to 24'3s current product offerings as a result of this study.
-nline sales will include only current products and any changes to this product line must be
considered outside of the purpose of this document.
0% TEC1NOLO2Y CONSIDERATIONS
This section should e#plain any considerations the organization must ma*e with regards to
technology. Many new initiati$es rely on technology to manage or monitor $arious business
functions. =ew technology may be de$eloped internally or contracted through a ser$ice
pro$ider and always result in costs which must be weighed in determining the path forward.
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7pgraded technological capability will be re9uired for 24' to mo$e toward offering an
online mar*etplace from which customers may purchase our products. 'ustomers demand a
simple and easy way by which to conduct online transactions and it is imperati$e that all
transactions are conducted in a secure manner. While 24' maintains a web site with
product lists and descriptions: it does not currently allow for purchasing to be done online.
This functionality must be integrated with our current web site to allow for secure purchases
to be made. 2dditionally: new online mar*eting functionality must be considered in order to
target e#isting and potential customers through methods such as e;mailing lists: promotional
ad$ertisements: and loyalty discounts.
While 24' maintains a small information technology 5<T6 group: the e#pertise does not
currently e#ist internally to design: build: and implement the sort of e#tensi$e online
platform re9uired for this effort. Therefore: the recommendation is to contract this wor* out
to an internet mar*etplace pro$ider who can wor* with 24' to meet its needs within the
determined timeframe and budget. <t should be noted that while 24' does not ha$e this
e#pertise internally: the technology e#ists and is in use throughout the mar*etplace which
lowers the ris* of this concept considerably.
24' currently maintains a high speed internet connection: web ser$er: and the latest
software. With the addition of an e;commerce portal it is e#pected that there will be an
o$erall cost increase of +;!8> for web ser$er operations and maintenance costs.
3% PRODUCT4SER.ICE MAR5ETPLACE
This section describes the e#isting mar*etplace for the products and)or ser$ices the
organization is considering. <t may describe who the target mar*et consists of for these
products or ser$ices: who the competitors are: how products will be distributed: and why
customers might choose to buy our products)ser$ices. Most mar*etplaces are dynamic
en$ironments in which things change constantly. To enter a new mar*etplace blindly will
usually result in an organization not fully understanding its role and not ma#imizing its
resulting benefits.
The online mar*etplace for chocolates and confections has been thri$ing for many years. <n
F?%8## online chocolate sales accounted for appro#imately @%8 million or %8> of total
chocolate sales worldwide. While chocolates and confections are a$ailable in almost e$ery
store: our primary mar*etplace consists of specialty chocolates and confections. 2ll of
24'3s current major competitors already ha$e an established online presence of at least &;+
years. The top & competitors are currently Smith3s 'hocolates: Worldwide 'andy: and
'hocolate <nternational. 2 large majority of 24'3s customer base are returning customers
and referrals from e#isting customers. 4y pro$iding a more con$enient means of purchasing
our products online it is e#pected that we will retain these customers while conducting an
online mar*eting campaign for new customers as well.
24' will distribute online purchases $ia direct shipping from the nearest store location. This
will allow 24' to pro$ide timely shipping and eliminate the need for a central warehouse or
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facility from which to store and ship its products. Such a facility would re9uire a significant
capital in$estment as well as increased operation and maintenance costs. Aowe$er: based on
anticipated growth projections: 24' must ensure that all store locations maintain ade9uate
in$entories on hand to satisfy customer demand.
6% MAR5ETIN2 STRATE2Y
This section pro$ides a high le$el description of how the organization will mar*et its product
or ser$ice. Some topics which should be included are how does an organization differentiate
itself from its competitorsB types of mar*eting the organization will utilizeB and who the
organization will target. Mar*eting efforts must be focused on the right target groups in
order to yield the greatest return on in$estment.
<n order to be successful: 24' must differentiate itself from competitors in order to appeal to
customers in the online mar*etplace. To do this: 24' will utilize its practice of
personalizing its product pac*aging which it currently offers in;store customers. 'urrent
competitors do not currently pro$ide any personalization of pac*aging. 'ustomers will ha$e
the ability to personalize messages on or inside of product pac*aging: re9uest specific color;
based themes: or tailor pac*aging for special occasions or e$ents.
24' will implement a customer e mailing list in order to send product promotions: sales
ad$ertisements: and other special offerings to customers who register. 2dditionally: 24'
will offer referral incenti$es to customers who refer our products to friends and family in
order to pro$ide additional incenti$es. 24' will also maintain a customer database in order
to determine its target customer groups and geographical regions. 24' will research
mar*eting intelligence pro$iders to determine the benefits and costs of purchasing customer
information for bul* email campaigns as well. 2nother important consideration of 24'3s
online mar*eting strategy is cost. "lectronic mar*eting communication costs are $ery small
in comparison to direct mail mar*eting which 24' currently utilizes. Aowe$er: we e#pect
the additional re$enue from online sales to greatly outweigh these additional electronic
mar*eting costs.
<t is important to note that 24'3s current mar*eting and sales staff will re9uire training in
online mar*eting and sales practices. This training will need to be contracted to a training
pro$ider as part of our startup costs and schedule.
7% OR2ANIZATION AND STAFFIN2
With many new products or ser$ices there may be a need for additional staffing or for an
organization to restructure in order to accommodate the change. These are important
considerations as they may result in increased costs or re9uire an organization to change its
practices and processes.
The 24' online sales campaign is not anticipated to significantly affect the organizational
structure of the company. There are: howe$er: se$eral staffing additions re9uired to
successfully implement the online sales campaign. 2ll of these positions will wor* within
e#isting departments and report to department managers.
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Staffing Position C! -nline Sales Manager D this full time position will lead sales staff in
identifying sales opportunities and con$erting these opportunities to actual sales. This person
will report to 24'3s Director of Sales and will wor* in 24' head9uarters.
Staffing Position C% -nline Mar*eting Manager D this full time position will lead mar*eting
staff in identifying target customer groups)mar*ets and conducting online
ad$ertising)mar*eting efforts to ma#imize traffic to 24's online mar*etplace. This person
will report to 24'3s Director of Mar*eting and will wor* in 24' head9uarters.
8% SC1EDULE
This section is intended to pro$ide a high le$el framewor* for implementation of the product
or ser$ice being considered. This section is not intended to include a detailed schedule as
this would be de$eloped during project planning should this initiati$e be appro$ed. This
section may include some targeted milestones and timeframes for completion as a guideline
only.
The 24' online sales campaign is e#pected to ta*e si# months from project appro$al to
launch of the e;commerce platform. Many of the foundations for this platform: such as high;
speed internet and web ser$er capability: are already a$ailable. The following is a high le$el
schedule of some significant milestones for this initiati$e
Ean !: %8## <nitiate Project
February !: %8 ## Project *ic*off meeting
March !: %8 ## 'omplete online sales site design
2pril !: %8 ## 'omplete testing of online sales site
Eune !: %8 ## 'omplete beta testing trials of online sales site
Euly %: %8 ## Fo li$e with site launch
7pon appro$al of this project a detailed schedule will be created by the assigned project team
to include all tas*s and deli$erables.
9% FINANCIAL PROJECTIONS
This section pro$ides a description of the financial projections the new initiati$e is e#pected
to yield $ersus additional costs. Financial projections are one *ey aspect of new project
selection criteria. There are many ways to present these projections. =et present $alue
5=PG6: cost;benefit calculations: and balance sheets are just some e#amples of how financial
projections may be illustrated. This section should also pro$ide the assumptions on which
the illustrated financial projections are based.
The financial projections for the addition of an online sales platform for 24' are highlighted
in the table below. These figures account for projected online sales: additional staffing
re9uirements: shipping: material: and insurance costs: contract support for <T and training
needs: and web ser$er and hosting costs.
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The assumptions for these projections are as follows
<n store sales projections remain unchanged
2ll milestones are performed in accordance with the schedule
2ll transactions are closed yearly with no carry;o$er to subse9uent years
Measure Year 1 Year 2 Year 3 Year 4 Year 5 5 year total
Online Sales Projections $350,000 $425,000 $500,000 $650,000 $800,000 $2,725,000
Additional Staffing Costs $160,000 $170,000 $200,000 $235,000 $255,000 $1,020,000
Projected aterial, S!i""ing, #ns$rance Costs $42,000 $58,000 $70,000 $78,000 $84,000 $332,000
Additional %e& Ser'er and #( )osting*aintenance $22,000 $25,000 $30,000 $35,000 $40,000 $152,000
(raining for Sales and ar+eting Staff $75,000 $0 $0 $0 $0 $75,000
Contract for ,esign, -$ild, and #."le.entation of Online
Store
$100,000 $0 $0 $0 $0 $100,000
(otal Additional Costs for Online Sales $3//,000 $253,000 $300,000 $348,000 $37/,000 $1,67/,000
Cas! #nflo0 1$4/,000200 $172,000200 $200,000200 $302,000200 $421,000200 $1,046,000200
:% FINDIN2S AND RECOMMENDATIONS
This section should summarize the findings of the feasibility study and e#plain why this
course of action is or is not recommended. This section may include a description of pros
and cons for the initiati$e being considered. This section should be brief since most of the
detail is included elsewhere in the document. 2dditionally: it should capture the li*elihood
of success for the business idea being studied.
4ased on the information presented in this feasibility study: it is recommended that 24'
appro$es the online sales initiati$e and begins project initiation. The findings of this
feasibility study show that this initiati$e will be highly beneficial to the organization and has
a high probability of success. Hey findings are as follows
Technology
Will utilize e#isting technology which lowers project ris*
"commerce infrastructure will be contracted out to $endor which allows 24' to
share ris*
-nce in place this technology is simple to operate and maintain for a relati$ely low
cost
Mar*eting
This initiati$e will allow 24' to reach large number of target groups electronically at
a low cost
24' can e#pand customer base beyond geographic areas where stores are currently
located
The mar*etplace for online chocolate and confection sales is in a steady state of
growth
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24' is able to differentiate itself from its competitors and will utilize incenti$e
programs to target new consumers
-rganizational
Minimal increases to staffing are re9uired with no changes to organizational structure
=o new facilities or capital in$estments are re9uired
Financial
4rea* e$en point occurs early in the second year of operation
Fi$e year projections show online sales accounting for %+> of total sales
24' will be in position to capture greater mar*et share by maintaining both an in;
store and online presence
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