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Feasibility 3rd Week
Feasibility 3rd Week
Feasibility 3rd Week
Studies
Assoc. Prof. İrem UÇAL SARI
Istanbul Technical University
10/26/2023 10:20 AM 1
Syllabus
Date Week Topic
21.09.2022 1 General Introduction
28.09.2022 2 Recognizing Opportunities and Generating Ideas
5.10.2022 3 Pre-feasibility Study and Feasibility Study
12.10.2022 4 Market Feasibility
19.10.2022 5 Project presentations (Idea Generation and Selection)
26.10.2022 6 Project presentations (Idea Generation and Selection)
02.11.2022 7 Technical Feasibility
09.11.2022 8 Financial Feasibility
16.11.2022 9 Midterm Exam
23.11.2022 10 Project Presentations
30.11.2022 11 Project Presentations
07.12.2022 12 Project Presentations
14.12.2022 13 Selection of the project alternatives using MCDM Methods
21.12.2022 14 Best Term Project Determination. In class application
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PREFEASIBILITY STUDY
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Pre-Feasibility Study
• an early-stage analysis of potential projects.
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Pre-Feasibility Study
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Pre-Feasibility Study
• Pre-feasibility studies act as one of the first
explorations of a potential investment,
following a preliminary resource report.
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Pre-Feasibility Study
• Takes into account factors that may impact
or interfere with the final project such as
community issues, geographic obstacles,
permit challenges…
19
Pre-feasibility Study
Pre-feasibility Study Feasibility Study
19
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Pre-feasibility Study
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❖ Natural resources with potential for
processing and manufacture
❖ The existing agricultural pattern that serves
as a basis for agro-based industries
❖ Future demand for certain customer goods
Opportunity that have growth potential as a result of
studies increased population or purchasing power
should or for newly developed goods.
analyze: ❖ Imports, in order to identify areas for
import substitution
❖ Environmental impact
❖ Manufacturing sectors successful in other
countries with similar economic
backgrounds and levels of development,
capital, labor and natural resources
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❖ Possible extension of existing lines of
manufacturing by backward or forward
integration
❖ Possibilities for diversification
❖ Possible extensions of existing industrial
Opportunity capacity
studies ❖ The general investment climate
should
❖ Industrial policies
analyze:
❖ Availability and cost of production factors
❖ Export possibilities
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In the Pre-feasibility Study
before assigning larger funds for a feasibility study
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Case Study: Green Housing
• The housing market currently responds to the demand for
more affordable housing through the rapid building of low-
cost and poor-quality housing, not taking into account trends
of broader urban and industrial development and the impacts
on climate resilience and energy intensity of residential
buildings and streets.
Market
• Without intervention, this can lead to:
Failure
• Urban infrastructure that locks Ethiopia into a pathway
of unsustainable
• development in the long-term (50 years+);
• Deterioration of urban environmental and public health
(lack of basic services in slums; pollution of land, air,
and water); and
• Poor quality, unsustainable housing choices which
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impact growth potential due to failure to attract labor.
Case Study: Green Housing
• Increase resilience of the built environment, reducing
environmental risk and GHG emissions from housing
Implementation
timescale • Medium (2-5 years)
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Case Study: Green Housing
Potential source
• Green Climate Fund, Private sector, DFIs
of finance
11/10/2021 1:52 PM 28
Forms of Feasibility Analysis
1
Product/Service Feasibility (Pre-
feasibility/Market Feasibility)
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Product/Service Feasibility Analysis
• Product/Service Desirability (1/2)
– Determine the basic appeal of the product or service.
• Does it make sense? Is it reasonable? Is it something consumers
will get excited about?
• Does it take advantage of an environmental trend, solve a problem,
or take advantage of a gap in the marketplace?
• Is this a good time to introduce the product or service to the market?
• Are there any fatal flaws in the product or service’s basic design or
concept?
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Product/Service Feasibility Analysis
• Product/Service Desirability (2/2)
– Administer a Concept Test
▪ A concept statement should be developed.
▪ A concept statement is a one-page description of a product or
service idea that is distributed to people who are asked to provide
feedback on the potential of the idea.
▪ The feedback will hopefully provide the entrepreneur:
– A sense of the viability of the product or service idea.
– Suggestions for how the idea can be strengthened or “tweaked”
before proceeding further.
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Product/Service Feasibility Analysis
• Product/Service Demand
• Step 1: Talking Face-to-Face with Potential
Customers
• Step 2: Using Online Tools
• Step 3: Library, Internet and Gumshoe Research
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Industry/Target Market Feasibility
Analysis (1 of 2)
Purpose
• Is an assessment of the overall appeal of the industry and
the target market for the proposed business.
• An industry is a group of firms producing a similar product
or service.
• A firm’s target market is the limited portion of the industry
it plans to go after.
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Industry/Target Market Feasibility
Analysis (2 of 2)
Components of industry/target market feasibility analysis
• Industry Attractiveness
• Target Market Attractiveness
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Organizational Feasibility Analysis
Purpose
• Is conducted to determine whether a proposed business
has sufficient management expertise, organizational
competence, and resources to successfully launch a
business.
• Focuses on non-financial resources (financial resources
are considered later)
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Organizational Feasibility Analysis (2 of 2)
Components of organizational feasibility analysis
• Management Prowess
• Resource Sufficiency
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Management Prowess
• A proposed business should candidly evaluate the
prowess, or ability, of its management team to satisfy itself
that management has the requisite passion and expertise
to launch the venture.
• Two of the most important factors in this area are:
‒ The passion that the sole entrepreneur or the founding
team has for the business idea.
‒ The extent to which the sole entrepreneur or the
founding team understands the markets in which the
firm will participate.
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Resource Sufficiency
• This topic pertains to an assessment of whether an
entrepreneur has sufficient resources to launch the
proposed venture.
• To test resource sufficiency, a firm should list the 6 to 12
most critical nonfinancial resources that will be needed to
move the business idea forward successfully.
‒ If critical resources are not available in certain areas, it
may be impractical to proceed with the business idea.
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Financial Feasibility Analysis (1 of 2)
Purpose
• Is the final component of a comprehensive feasibility
analysis.
• A preliminary financial assessment is sufficient.
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Financial Feasibility Analysis (2 of 2)
Components of financial feasibility analysis
• Total Start-Up Cash Needed
• Financial Performance of Similar Businesses
• Overall Financial Attractiveness of the Proposed Venture
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