Official Midterm 2 study guide for 131 A

Official Midterm 2 study guide for 131 A - Feasibility...

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Feasibility Analysis Preliminary evaluation of a business idea. Process of determining whether a business idea is viable/worth pursuing. It follows the opportunity recognition stage and comes prior to the development of a business plan. It takes the guesswork (to a certain degree) out of a business launch and provides an entrepreneur with a more secure notion that a business idea is feasible or viable. The thought is to screen ideas before lots of resources are spent on them. Feasibility Analysis Definition- the process of determining if a business idea is viable. As a preliminary evaluation of a business idea, a feasible analysis is completed to determine if an idea is worth pursuing and to screen ideas before spending resources on them. Product/service feasibility- Definition- an assessment of the overall appeal of the product or service being proposed. The idea is that before a prospective firm rushes a product or service into development, it should be confident that the product or service is what its prospective customers want. Product/Service Feasibility Benefits: -Getting the product right the first time -A beta (or early adopter) community emerges -Avoiding any obvious flaws in product or service design -Using time and capital more efficiently -Gaining insight into additional product and service offerings
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Industry/market feasibility analysis- an assessment of the overall appeal of the market for the product or service being proposed. For feasibility analysis, there are three primary issues that a proposed business should consider: industry attractiveness, market timeliness, and identification of a niche market. Organizational feasibility analysis- Determine whether the proposed business has sufficient management expertise, organizational competence, and resources to successfully launch its business. Two Primary Issues of Organizational Feasibility Analysis- 1.Management prowess: passion and expertise of management team, extent of professional and social networks, new venture team. 2.Resource sufficiency: sufficient nonfinancial resources available to launch the ventures? Organizational Feasibility Analysis- Examples of nonfinancial resources that may be critical to the successful launch of a new venture includes: -Availability of affordable office or lab space. -Likelihood of local and state government support of the business. -Quality of the labor pool available. -Proximity to key suppliers and customers. - Willingness of high quality employees to join the firm.
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- Likelihood of establishing favorable strategic partnerships. - Proximity to similar firms for the purpose of sharing knowledge. - Possibility of obtaining intellectual property protection in key areas. Financial feasibility analysis-
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This note was uploaded on 09/08/2010 for the course BUS 131D at San Jose State University .

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Official Midterm 2 study guide for 131 A - Feasibility...

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