Chapter Two :

Project preparation and

Analysis: An Overview

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Contents

3.1. Market and Demand analysis

3.2. Technical analysis

3.3. Institutional and Social aspects

3.4. Pre-feasibility and feasibility studies

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 2.1. Market analysis
➢ indicates the demand potential of the output of
the project:
Demographic statistics
•

• Income levels of the people

➢ Market analysis should address the following

questions:
 Is the product for domestic or export consumption?
 Is the market large-enough to absorb the new product without
affecting the price?
 What share of the total market will the proposed product have?
 What marketing strategies and distribution channels are required?

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2.2. Technical analysis
 That the project has been clearly spelled out with the
correct technical design details (such as size,
location, timing, and technology)

 Technical analysis gives an indication of the capacity

of operations within the project
 It also includes the quality of machinery and equipment's

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Technical Analysis –Cont.
❖What kinds of technology will we need?

❖Is the required technology available “in house”? Or

can it be acquired?
✓ If the technology is available, does it have the
capacity to handle the solution?

❖Is the proposed technology or solution practical?

✓ Do we currently possess the necessary technology?
✓ Do we posses the necessary technical expertise?

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Technical analysis
 Broad purpose of technical analysis:
a) To ensure that the project is technically feasible in the
sense that all the inputs required to set-up the project
are available
&

a) To facilitate the most optimal formulation of the project

in terms of technology, size, location, & so on
 Choice of technology
 Ex: Cement can be made either by the dry process or the wet
process
 Soda can be made by the chemical method

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