What’s the big idea

Organisations must critically examine their planned actions, whether they are just starting out or have been in operation for a while. Feasibility studies assess various factors in relation to a proposed idea. For example, a project’s feasibility might rest on financial constraints, timeframe, socio-cultural values, workforce, technical limitations etc. The results of a feasibility study are used to inform product development and business plans/models to make a project more likely to succeed.

Discuss what feasibility studies might analyse: financial forecasts, market research, similar existing projects/products, materials tests, infrastructure (e.g. factories, transport links), making and testing prototypes, labour costs and staffing.

Play the link video to highlight the importance of feasibility studies.

What is assessed?

Feasibility studies are commonly linked with business and economics, but the focus of this topic is on testing the feasibility of products. Feasibility studies for products put greater emphasis on factors needed to bring a product to market. Go through the five different points on the slide.

Discuss the difference between qualitative and quantitative data. Feasibility studies that are backed up by quantitative data are easier to assess objectively, the risks associated with different factors can be measured and compared more easily. This helps put forward a stronger case to potential investors.

Technical factors

When developing new products, technology can often be the limiting factor. Play the link video on Elon Musk’s hyperloop – a proposed idea which many view as a pipedream due to the technical limitations. Do students think the hyperloop concept is technically feasible?

Will you cash in?

Economic factors associated with a product must be analysed e.g. initial investment needed, crowd funding potential, expected return on investment, rate of growth etc. Economic predictions are affected by various external factors e.g. fluctuations in global markets as well as political, social and environmental factors. Consequently, they can never be certain, and any project budget should contain a contingency fund. That said, feasibility studies are one of the best ways to assess the level of risk (more on this later).

Direct and indirect costs

Highlight the difference between these terms which will be revisited again in Unit 12, T2. Ask students to complete Task 1 of the Worksheet.

Time is money

Manufacturing costs are inextricably linked to the proposed timeline – the faster a product can be made, the less money will be spent on wages, rent, energy etc.

Ask students to complete Task 2 of the Worksheet.

Assessing the market

The feasibility of a product may rest on market demand, the characteristics of the user group and how it is advertised. If a product has a unique selling point (USP) it may be more likely to beat competitors. Link to market pull and technology push.

Production and logistics

Product feasibility studies must investigate production and logistics e.g. manufacturing methods, workforce, distribution and so on. If an existing workforce is in place, a feasibility study should also assess to what extent employees will accept the changes required to meet new manufacturing needs.

The beauty of a feasibility study is that all these issues are highlighted before production begins so changes can be put in place.

Legal factors

Products must follow relevant national and international laws and regulations. Feasibility studies consider which legislation applies to a product and can put forward recommendations to ensure the product adheres to regulations.
Changes, or the likelihood of changes, to government policy and legislation should be considered.

Risk and success

All factors in a feasibility study are subject to changes, whether that is due to technological advances, changes to the market, competitors or global economic markets. Ultimately, a feasibility study can only predict/estimate the level of risk or chance of success.

Students should be familiar with a SWOT analysis. A SWOT analysis helps identify the factors an organisation has control over and highlight opportunities and threats.

Ask students to complete Task 3 of the Worksheet.

Testing feasibility

Discuss how testing can be used as a useful tool to inform feasibility in a project or activity. Physical, virtual and market tests can be used to inform a feasibility study. Product testing is covered in greater detail in Unit 10.

Physical prototypes allow consumers to handle a product and give a clear idea of the scale, look and feel of a proposed product but virtual tests and simulations require fewer materials to test concepts and can reduced testing times as well as the time needed to develop a product. Discuss how virtual reality is now being used early on in product development to inform feasibility of a project or concept.

Feedback from a market test could change the aesthetic, form, functionality or performance of a proposed product to make it more commercially viable.