FEASIBILITY STUDY

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Elemely I. Paulin PhD
Subject Teacher
 Feasibility study
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 A feasibility study is part of the initial design stage of any

project/plan. It is conducted in order to objectively uncover the 
strengths and weaknesses of a proposed project or an existing
business. It can help to identify and assess the opportunities and
threats present in the natural environment, the resources
required for the project, and the prospects for success.
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 A feasibility study is an assessment of the practicality of a

project or system. A feasibility study aims to objectively and
rationally uncover the strengths and weaknesses of an
existing business or proposed venture, opportunities and
threats present in the natural environment, the resources
 required to carry through, and ultimately the prospects for
success. In its simplest terms, the two criteria to judge
feasibility are cost required and value to be attained.
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 A well-designed feasibility study should provide a historical

background of the business or project, a description of the 
product or service, accounting statements, details of the 
operations and management, marketing research and policies,
financial data, legal requirements and tax obligations. Generally,
feasibility studies precede technical development and project
 implementation. A feasibility study evaluates the project's
potential for success; therefore, perceived objectivity is an
important factor in the credibility of the study for potential
investors and lending institutions. It must therefore be conducted
with an objective, unbiased approach to provide information
upon which decisions can be based.
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 A project feasibility study is a comprehensive report that

examines in detail the five frames of analysis of a given
project. It also takes into consideration its four Ps, its risks
and POVs, and its constraints (calendar, costs, and norms of
quality). The goal is to determine whether the project should
go ahead, be redesigned, or else abandoned altogether. The
five frames of analysis are: The frame of definition; the frame
of contextual risks; the frame of potentiality; the parametric
frame; the frame of dominant and contingency strategies.
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4P’s in Feasibility Study

 The four Ps are traditionally defined as Plan, Processes, People,

and Power. The risks are considered to be external to the project
(e.g., weather conditions) and are divided in eight categories:
(Plan) financial and organizational (e.g., government structure for
a private project); (Processes) environmental and technological;
(People) marketing and sociocultural; and (Power) legal and
political. POVs are Points of Vulnerability: they differ from risks in
the sense that they are internal to the project and can be
controlled or else eliminated.
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Why Do Feasibility Studies?

It is conducted in order to find answers to the

following questions:
 Does the company possess the required
resources and technology?
 Will the company receive a sufficiently high return
on its investment?
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Common factors

 TELOS is an acronym in project management

 used to define five areas of feasibility that
determine whether a project should run or not
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TELOS
 T - Technical - Is the project technically possible?

 E - Economic - Can the project be afforded? Will it

increase profit?

 L - Legal - Is the project legal?

 O - Operational - How will the current operations

support the change?

 S - Scheduling - Can the project be done in time?

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Steps in a Feasibility Study

 Conduct preliminary analyses.

 Prepare a projected income statement. What are the possible revenues

that the project can generate?

 Conduct a market survey. Does the project create a good or service that
is in demand in the market? What price are consumers willing to pay for
the good or service?

 Plan the organizational structure of the new project. What are the

staffing requirements? How many workers are needed? What other
resources are needed?
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Steps in a Feasibility Study

 Prepare an opening day balance of projected expenses

and revenue

 Review and analyze the points of vulnerability that are

internal to the project and that can be controlled or
eliminated.

 Decide whether to go on with the plan/project.

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Contents of a Feasibility Report

 Executive Summary

 Description of the Product/Service

 Technology Considerations

 Product/ Service Marketplace

 Identification of the Specific Market

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Contents of a Feasibility Report

 Marketing Strategy

 Organizational Structure

 Schedule

 Financial Projections
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Types of Feasibility Study

1. Technical feasibility

 Technical: Hardware and software

 Existing or new technology

 Manpower

 Site analysis

 Transportation
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2. Financial feasibility
 Initial investment

 Resources to procure capital: Banks, investors, venture capitalists

 Return on investment

3. Market feasibility
 Type of industry

 Prevailing market

 Future market growth

 Competitors and potential customers

 Projection of sales
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Types of Feasibility Study
 4. Organizational feasibility

 The organizational structure of the business

 Legal structure of the business or the specific

project
 Management team’s competency, professional
skills, and experience
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Dimensions of Feasibility Study