Feasibility Study Case

Question

Hello,

I was wondering if it would be possible to know what are the best practices to solve a feasibility study case?

What I am doing generally is to compare two business cases (Current situation VS. future situation). I have seen so far three types of such cases:

- Lower Cost (for example thanks to technology)

- Higher revenue (for example thanks to a JV)

- Higher Profit (By outsourcing the labor piece)

What are the best practices to structure and answer such a case ?

Even though It is somewhat similar to a profit case (increasing sales and/or cost), I strongly feel the structure and methodology is different.

Thanks a lot

Answer 1

Hi Anonymous,

what you call Feasibility Study is essentially everything that entails the assessment of a strategic measure - no matter what it actually is! In essence: a market entry/product launch/company purchase/capacity expansion/company acquisition/ etc. etc. makes sense if (i) it is economically viable, (ii) the client has/can acquire the required capabilities, and (iii) the risks are manageable. Economic viability is the central analysis to conduct and should be centered around value creation. You disaggregate value into its quantitative components and sub-components with a rigorous logic tree, and then you map qualitative drivers to each quantitative sub-component.

THIS is how you approach cases in a rigorous and bullet-proof way! Structuring a case means you outline the logic according to which you will answer the precise question of the client. Structuring does NOT mean to provide a structured list of the areas ("buckets") that you want to look into! Once you understand this, and once you have learned how to properly build your case solving roadmap aroung this insight, you don't need all these nonsense frameworks anymore which are floating around these days. NONE of them.

Cheers, Sidi