Tutorial 4

1. What are some of the most important questions a feasibility analysis answers and
what model may be of value in this process?
Feasibility analysis evaluates the project’s potential for success. This analysis ask
question towards the people who create a new business on whether this particular idea
that they are implementing will create a successful business or not. We could divide the
elements of a feasibility analysis into three which is
 Product or Service Feasibility
 Financial Feasibility
 Entrepreneur/Team Feasibility
A good feasibility analysis should help you answer:
 Is there a market for the industry in the area
 What kind of competition am I dealing with
 What kinds of activities/products should I focus on to create revenue
 What considerations are involved when it comes to choosing a location

Feasibility analysis varies depending on the type of industry. However, there are
several model that can be applied when undertaking a feasibility analysis:
 Suppliers
 Buyers
 Substitutes
 Potential entrants

2. What are sociocultural changes and why are they important?

(i) Sociocultural is a term that for a combination of both social and cultural factors.
And is mostly used to determine indicators behind society reasons before eventually
coming up with a decision to purchase certain product. (ii) For sociocultural changes
itself, it refers to an important transformation from time to time through the behavior
patterns, and cultural values and norms. The belief that culture is symbolically coded
and can thus be taught to one to another also shows that the cultural factor has the
 possibility to change over time according to its globalization around that certain area.
This sociocultural change is also known as sociocultural evaluation where it is a term
for theories of certain cultural and social evolution. (iii) Sociocultural changes is
important especially in the business world because if there is a change of culture and
social, there will also be changes to their consumer behavior and also to their way of
thinking. Due to this reason, the business that has been established before and are not
fortunate may then change to be fortunate as the culture and social factors changes.
When there is a changes in the social factors on certain country, it will have increased
the awareness and understanding of a certain product. This happen because changes
on the social factors will eventually lead the society to change their thoughts of
something. (iv) There are factors of sociocultural changes where the economy who
was once an agricultural economy could shift into industrial economy. This changes
or shift from the rural life to urban life will be beneficial for us as there will be better
job opportunities for most of us and that we could also see some changes as the
country who used to be a less developed country, shift to a developed country. (v) For
some countries before, there are more man workers instead of woman worker, with
this sociocultural changes, gender and racial attitudes towards worker will change as
well because most people nowadays believe that just because we are a woman, we
couldn’t do better than the male. There are news saying that woman who work in a
company used to be sexually assaults and they could not do anything about it as they
did not have the power to eventually fight over their employers or those who assault
them as they are usually man. Due to this changes, the attitudes toward racial
discrimination and sexual harassment have changed drastically because society finally
realize that man and woman are mostly equal to each other and they need to depend
on each other.

3. How does the threat of substitutes affect an industry’s structure?

(i) Substitutes goods are two alternative goods that could be used for the same
purpose and offers similar benefits to the consumer as the product produced by
the firms within the industry. Sometimes, consumer may decide to purchase
substitute product instead of the industry product because substitute product is
tended to be cheaper from the industry product most of the time. This does not
always apply because some consumers still prefer to purchase goods with
 brand image rather than just purchasing cheaper product with a cheaper price.
According to the porter’s five force model, the threats of substitutes are one of
the factors that contribute to the competitive structure of an industry.
(ii) The threat of substitution in an industry help influences the firm’s ability to
achieve profitability because with this substitution, consumer will have the
rights to choose which product that they are going to purchase, whether it is
the substitute or the industry’s product. This could also then increase
competition in between firms who produce the substitute product and also
those firms who produce the industry product. Not only it has increase the
competition, but it would also create the industry’s product firm to receive a
decrease in the number of sale and potential profit. Although having a
substitute product will leads to a disadvantages for the industry product, but
without substitution there would then be a lack of close substitute product
where it makes the industry be less competitive.
(iii) When this happen, many people will then decide to purchase the industry
product instead of purchasing the substitute product because consumer could
also consider which product is better to be used for a long time. When
someone decided to purchase a product, they will consider whether the
product could be used for a long time. If the quality of the product is not good
enough even when the substitute product put the range of price almost similar
to the industry product, they will then eventually choose the industry product
instead of substitute product. Substitute products or services can turn an
industry on its head because new entrants will find the industry more attractive
when the
 Quality substitutes are not readily available.
 Price of the substitute products are not significantly lower than those of the
industry’s product.
 Buyer switching costs are high

4. What are the four major elements to be included in a financial feasibility analysis?

Financial feasibility study to help analysis how much start-up capital is needed in the
creation of a new business. It is usually the source of capital, returns on investment
 and other financial considerations. As the analysis show the considerations on how
much cash is needed and where it will come from and how much should the company
spent during the given amount of time. There are four major elements that should be
included in a financial feasibility analysis.
 Capital Requirements:
It is an estimation of how much start-up capital is needed by the company to
be able to launch the business into the market.
 Estimated Earnings:
It is the forecasted income statements.
 Time Out of Cash:
It is the total cash that will be take to sustain the business until they achieve
break-even cash flow.
 Return on Investment:
It is the combination of the previous two estimated cost. As it helps to
determine on how much the investors could expect their investments to return.

5.
a) How important is a prototype for Andy Sycamore to succeed with his ‘Nested
Learning’?
Andy’s idea, “Nested Learning,” is considered a new innovation which is why
prototype of his idea plays a vital role in deciding the future and success of the
software. If the prototype is not complex enough to solve the society
problems, surely no companies or investor will buy/invest to “Nested
Learning.”
b) What is the value proposition of ‘’Nested Learning’’? Is it compelling?

“Nested Learning” value proposition is:

 Help in training the hardest soft skills of employees: problem identification

and problem solving
 Unique system, the system needs to be asked sufficiently to generate more
details of the scenario, training the employees to think critically
 The scenario is developed to client-specific scenarios
Yes, it is compelling. Not only is this one of the few digital tool that can help
train employees, but the system also solve one of the hardest training in almost
all companies.