Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Feasibility Analysis Assignment Instructions From “Preparing Effective Business Plans” by Bruce R. Barringer Although the Full Feasibility Analysis includes four sections, we will only focus on two of those sections in this week’s assignment. The written paper is to include only the Introduction and Industry/Market Feasibility sections. Include a title page

identifying the assignment title, your name, class details, and date. The objective of the assignment is to write meaningful paragraphs describing the Industry and the Target Market that will enable a reader to assess the feasibility of the proposed business. Use the Assessment tools below as a guideline for the topics to be covered in your paragraphs. However, do not simply select from the three feasibility choices provided for each topic. They are only to serve as thought starters. You are expected to write something meaningful about each applicable topic, as it pertains to

your specific proposed business. No research references are required for this assignment. However, if you draw industry or market data from any published sources, be certain to cite all the details about the data that you have excerpted and indicate its source. Limit the body of your paper to approximately one page or so, double spaced. The following are suggestions on format. Use all the available space on the page for your content – don’t use headers and put all your contact and assignment information on the title page. Five paragraphs are suggested for the body of your paper (introduction, industry attractiveness, target market attractiveness, timeliness of entry, conclusion). Use the following as the template for the content of the body of your paper. However, it is not necessary to use all of these headings. They would consume too much “real estate” in your short paper. Introduction A. Name of the proposed business B. Name of the founder (or founders) C. One paragraph summary of the business Part 2: Industry/Market Feasibility A. Industry attractiveness B. Target market attractiveness C. Timeliness of entry into the target market Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Assessment Tools Industry Attractiveness  Assess the industry your proposed business will be entering at the five-digit NAICS code level. Use a broader industry category (less NCICS digits) if necessary (http://www.census.gov/epcd/www/naicstab.htm)  Assess the attractiveness of the industry in which the potential business plans to operate, on each of the following dimensions. Industry Attractiveness Assessment Tool Low Potential Moderate Potential High Potential 1. Number of competitors Many Few None 2. Age of industry Old Middle aged Young 3. Growth rate of industry Little or no growth Moderate growth Strong growth 4. Average net income for firms in the industry Low Medium High 5. Degree of industry concentration Concentrated Neither concentrated nor fragmented Fragmented 6. Stage of industry life cycle Maturity phase or decline phase Growth phase Emergence phase 7. Importance of industry’s products and/or services to customers “Ambivalent” “Would like to have” “Must have” 8. Extent to which business and environmental trends are moving in favor of the industry Low Medium High 9. Number of exciting new product and services emerging from the industry Low Medium High 10. Long-term prospects Weak Neutral Strong Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Target Market Attractiveness  Identify the specific market segment within your broader industry that you plan to target.  Assess the attractiveness of the target market on each of the following dimensions. Target Market Attractiveness Assessment Tool Low Potential Moderate Potential High Potential 1. Number of competitors in target market Many Few None 2. Growth rate of firms in the target market Little to no growth Slow growth Rapid growth 3. Average net income for firms in the target market Low Medium High 4. Methods for generating revenue in the industry Unclear Somewhat clear Clear 5. Ability to create “barriers to entry” for potential competitors Unable to create May or may not be able to create Can create 6. Degree to which customers feel satisfied by the current offerings in the target market Satisfied Neither satisfied or

dissatisfied Unsatisfied 7. Potential to employ low cost guerrilla and/or buzz marketing techniques to promote the firm’s product or services Low Moderate High 8. Excitement surrounding new product/service offerings in the target market Low Medium High Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Market Timeliness  Determine the timeliness of entering a specific target market based on the

following criteria. Market Timeliness Assessment Tool Low Potential Moderate Potential High Potential 1. Buying mood of customers Customers are not in a buying mood Customers are in a moderate buying mood Customers are in an aggressive buying mood 2. Momentum of the market Stable to losing momentum Slowly gaining momentum Rapidly gaining momentum 3. Need for a new firm in the market with your offerings or

geographic location Low Moderate High 4. Extent to which business and environmental trends are moving in favor of the target market Low Medium High 5. Recent or planned entrance of large firms into the market Large firms entering the market Rumors that large firms may be

entering the market No larger firms entered the market or are rumored to be entering the market Note: A copy of this template, along with each of the assessment tools, is also available in PDF format at the authors’ Web site at www.prenhall.com/entrepreneurship

 

A  Short solutions 

 

The introduction should include the name of the proposed business, name of the founder (or founders), and a one-paragraph summary of the business. The industry attractiveness section should assess the industry the proposed business will enter at the five-digit NAICS code level and evaluate its potential on ten dimensions, such as the number of competitors, growth rate, and average net income. The target market attractiveness section should identify the specific market segment within the broader industry and evaluate its potential on eight dimensions, such as the number of competitors in the target market, growth rate, and ability to create barriers to entry. Finally, the timeliness of entry section should assess the potential market based on five criteria, including the buying mood of customers, momentum of the market, and recent or planned entrance of large firms into the market.

Overall, the feasibility analysis should provide meaningful paragraphs that enable a reader to assess the feasibility of the proposed business. The format suggested is a guideline, and the focus should be on providing relevant and insightful information on each applicable topic.