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Final FS

The document outlines the differences between a feasibility study and a business plan, emphasizing that a feasibility study assesses viability before a business plan is created. It details the marketing environment, including micro and macro factors that influence marketing management, and discusses various marketing strategies and data collection methods. Additionally, it covers forecasting demand behavior, cash flow types, payback period, and the pros and cons of Net Present Value (NPV) as a project evaluation method.

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Yasmine Youssef
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9 views5 pages

Final FS

The document outlines the differences between a feasibility study and a business plan, emphasizing that a feasibility study assesses viability before a business plan is created. It details the marketing environment, including micro and macro factors that influence marketing management, and discusses various marketing strategies and data collection methods. Additionally, it covers forecasting demand behavior, cash flow types, payback period, and the pros and cons of Net Present Value (NPV) as a project evaluation method.

Uploaded by

Yasmine Youssef
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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FEASIBILITY STUDY FINAL

Feasibility study vs business plan


• A feasibility study is NOT a business plan.
• Feasibility study provides an investigating function – “is this viable?”
• Business plan provides a planning function. The business plan outlines the
actions needed to take the proposal from “idea” to “reality”.
• The feasibility study is prepared before the business plan.
• Often feasibility studies identify more than 1 alternative to the proposed idea.

The Marketing Environment


• It consists of the actors and forces outside marketing that affect marketing
management’s ability to develop and maintain successful relationships with its
target customers.

• Includes:
– Microenvironment - forces close to the project that affect its ability to serve its
customers.
– Macro environment - larger societal forces that affect the microenvironment.

Marketing Microenvironment:
1. Suppliers: provide the resources needed to produce goods and services and
are an important link in the “value delivery system”.

2. Marketing Intermediaries: help the company to promote, sell, and distribute its
goods to final buyers. i.e. resellers

3. Customers: five types of markets that purchase a company’s goods and


services.

4. Competitors: those who serve a target market with similar products and
services against whom a project must gain strategic advantage.

5. Publics: any group that perceives itself having an interest in a project ability to
achieve its objectives.

1
Marketing Macro environment:
1. Demographic: studies populations in terms of size, density, location, age,
gender, race, occupation and other statistics.

2. Economic: factors that affect consumer purchasing power and spending


patterns.

3. Natural: natural resources needed as inputs by marketers or that are affected


by marketing activities.

4. Technological: forces that create new technologies, creating new product


and market opportunities.

5. Political: laws, agencies and pressure groups that influence and limit
organizations and individuals in a given society.

6. Cultural: institutions and other forces that affect a society’s basic values,
perceptions, preferences, and behaviors

Marketing Strategy
• Selling Marketing Strategy
• Pricing Marketing Strategy:
(According to competitors' price or to cost plus bonus)
• Distribution Marketing Strategy: (Direct selling or using distribution channels)

What data collection methods will you use?


• Survey
• Interview
• Observation
• Case Study
• Testimonials
• Expert review

2
Forecasting: Demand Behavior
• Trend: a gradual, long-term up or down movement of demand
• Random variations: movements in demand that do not follow a pattern
• Cycle: an up-and-down repetitive movement in demand
• Seasonal pattern: an up-and-down repetitive movement in demand occurring
periodically.

Forecasting Methods
• Qualitative: use management judgment, expertise, and opinion to predict
future demand.
• Quantitative methods: Based on mathematical models

Types of Cash Flow


Outflow Inflow
One-time Initial investment cost Equipment salvage
value
Annual Operating costs & Operating revenues
taxes & savings
Other Working capital Working capital

3
Simple Payback
• Definition:
- Number of years it will take for the project to recover the initial investments.
Usually a rule of thumb for selecting projects, e.g. payback must be < 3 years.
- The Pay-Back Period is the length of time required to recover the initial outlay
on the project Or It is the time required to recover the original investment
through income generated from the project.

• Simple Payback (in years) = investment/cash flow.

• Pros:
a) It is easy to operate and simple to understand.
b) It is best suited where the project has shorter gestation period and project
cost is also less.
c) It is best suited for high risk category projects. Which are prone to rapid
technological changes. d) It enables entrepreneur to select an investment
which yields quick return of funds

Pros and Cons of NPV


Pros:
• This method introduces the element of time value of money and as such is a
scientific method of evaluating the project.
• It covers the whole project from start to finish and gives more accurate figures
• It Indicates all future flows in today’s value. This makes possible comparisons
between two mutually exclusive projects.
• It takes into account the objective of maximum profitability

Cons:
• It is difficult method to calculate and use.
• It is biased towards shot run projects.
• In this method profitability is not linked to capital employed.
• It does not consider Non-Financial data like the marketability of a product.

4
Data Sources
• Data required for a feasibility study can come from primary or secondary
sources
– Primary data can include formal interviews and surveys
• Collection of primary data can be expensive and time consuming

– Secondary data can include industry and trade publications, statistics of


industry associations, and government agency reports

Q. Identify what data source will you use for the following projects:
1. Extension for well known brand industry from Egypt in Saudi Arabia
2. Fish grill shop and restaurant
3. Mini market branch for well known series
4. Small hospital in a small village
5. Extension for our institute new branch in Mansoura

Ans: S,P&S,S,P&S,S

‫المسألتين‬+

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