Strategic Project Management: Feasibility Analysis and Business Environment

This report discusses the importance of feasibility analysis in strategic project management and analyzes the micro and macro business environment. It also highlights the project constraints, goals, and the feasibility analysis report for a residential duplex construction project in Sydney.

Running head: STRATEGIC PROJECT MANAGEMENT
Strategic Project Management: 233 Macquarie St, Sydney, NSW 2000
Name of the student:
Name of the University:

1STRATEGIC PROJECT MANAGEMENT
Table of Contents
Introduction......................................................................................................................................2
Project constraints and goals...........................................................................................................2
Feasibility analysis report................................................................................................................3
Micro business environment analysis..............................................................................................7
Macro business environment analysis.............................................................................................8
Conclusion.....................................................................................................................................10
Bibliography..................................................................................................................................11

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Introduction
This report reflects the importance of feasibility study and its application in order to
measure success for any project. The project considered here is construction of a residential
duplex building in a capita city Sydney and not in a suburb. The location chosen for the
construction is 233 Macquarie St, Sydney, NSW 2000. The real estate or construction business
industry of Sydney, Australia is gaining global commercial success these days due to
implementation of high level business and marketing strategies as well. It is responsibility of the
project owners and project team associates to make sure that the duplex construction project is
following all project management aspects and feasibility analysis stages throughout the
development life cycle.
Both the micro and macro business environment are analyzed and elaborated in this
paper. It will help to identify the different strategies that the project supervisor needs to
implement to ensure its success. A detail feasibility study is conducted and elaborated in the
paper. The success or failure of the project will be measured based on the feasibility report. It is
responsibility of the project supervisor to structure the project in such a way so that it can gain
commercial profit and competitive advantages as well.
Project constraints and goals
Constraints: Project constraints are the most essential factors that help to govern any
project towards success and expected project outcomes. The time and budget allotted for the
completion of the project are 9 months or 38 weeks and $800,000. The project is comprises of
three phases land purchase, approval and residential duplex construction and each the work

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packages again holds some activities. It is duty of the project team associates to complete the
project on the assigned time and budget to make sure that it will gain commercial profit and
competitive advantages as well. The triple project constraints are illustrated below:
Cost: The project needs to be completed in the budget of $800,000
Time: The project will take around 9 months or 38 weeks
Scope: The scope of the project is to construct a duplex residential building in 233
Macquarie St, Sydney, NSW 2000 and set affordable price for the target residents so that they
can afford them easily.
Goal
The goal of the project is to build a duplex residential building in 233 Macquarie St,
Sydney, NSW 2000. The project must be completed in the assigned time and budget. Not only
this but also the quality, resource, schedule and communication are the other knowledge areas
that require major focus for successful implementation of the project.
Feasibility analysis report
A feasibility analysis is conducted for the project and the respective report is also
presented in the below section. At first the land in 233 Macquarie St, Sydney, NSW 2000 needs
to purchase and for that bidding and negotiation are also done. The land is purchased in the cost
of $350,000. The contract signed for the project is a fixed cost contract which means that no
additional cost will be included to the project during implementation or the initial cost structure
will not be changed with progress time.

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As the price of the land is $350,000 therefore the stamp duty for the project will be
$18450 and the Conveyancing fee is $28000. The builder who has taken contract for the
construction is "Stanton Homes Pty Ltd Builders & Building Contractors - Sydney, NSW 2000".
The duplex building construction cost is $450,000. The land allotted for the construction if 0.25
acre. It has been measured that, the planning development fees for the project is $20000 and the
monthly council rate for the construction is $25000.
Apart from this, it is also calculated that total outgoing cost and holding cost for the
project are respectively $866450 and $145000, which implies that the project is commercial
profitable. The detail feasibility report is attached in the below section:
Project Feasibility Study
1. Land
Information
2. Purchase
Information
Land Address: 233 Macquarie St,
Sydney, NSW 2000.
Land Price: $350,000
Suburb/Town: Sydney Stamp Duty: $18,450
Land Size: 0.5 Acre $28,000
3. Local Council
Information
4. Construction
Information
Local Council
Name:
North Sydney council Builder Name: Stanton Homes Pty
Ltd
Builders & Building
Contractors -

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Sydney, NSW 2000
Minimum Land
Allotment Size:
0.25 Acre Duplex
Construction
Costs:
$450,000
Development
Planning Fees:
$20,000
Monthly Council
Rates:
$25,000
5. Duplex
Information
Duplex Estimated
Value:
$800,000
Monthly Rental
Income:
$80,000
Monthly Agent
Fees:
$70,000
Monthly Landlord
Insurance:
$50,000
6. Project Results
Equity Value = Duplex Value of
$800000
less Total Outgoings of
$866450
equals $-66450
Net Monthly Rental
Income =
Gross Monthly Rent of
$80000
less Holding Costs of
$145000
equals $-65000

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Figure 1: Timeline for the construction project
(Source: Created by Author)

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Micro business environment analysis
Micro business environment is the collection of different factors those can are easily
operated by the project supervisor and team members as well. It is mandatory for the project
supervisor to deal with each of these factors while analyzing the project status and project
condition. The micro elements are much interlinked than the macro business environment. Some
of the most crucial and important micro elements identified for the project include suppliers,
economy, shareholders, resource, competitors, media etc. Details of the factors are as follows:
Economy: It has been determined that the residential duplex construction project would
be able to bring high level commercial success for the North Sydney Council. The government
and local council are capital investors for this project. The cost estimated for the planning fees is
$20,000 and the monthly council rate for the project is $25000. Affordable price range is set for
the residential plot. 233 Macquarie St, Sydney, NSW 2000 that is selected for construction of the
residential duplex building will collect capital from various resources. Moreover, it can be said
that, the primary objective of the project- value of the constructed duplex less than the project
cost can be gained of the above mentioned measures are all professionally followed by the
supervisor.
Demographic factor: People with medium to high monthly income are the target
customers for the duplex residential project. The people who are targeted for the project belong
to the age group of between 30 and 50. Both offline and online marketing strategies and
approaches are used to attract the customers throughout nominated location Macquarie St,
Sydney, NSW. Banners, poster and online platforms are used to serve the project advertisement
purpose.

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Competitiveness: The capital city selected for the duplex construction is dealing with
frequently growing population of approximately 10000 throughout the location. It has been
identified that if this project is successfully implemented then the project owner would be able to
give high competition to the similar service provider’s like- builder available in Sydney,
contractors, subcontractors etc. In order to compete the other similar service providers, project
manager and supervisor need to set the price for the residential areas lesser than other. Lower
price and similar facilities will help to attract customers than the others.
Resourcing: In case of any construction project resource management is referred to as
one of the mist essential knowledge areas. Project that fails to manage their resources according
to the activity complexity, time and budget fail to reach the expected project objectives and
primary goals as well. In order to make sure that the project is successful proper resource
management is needed to be done. An accurate construction management deals with product and
material supply, space and facility providers, construction plant, equipments and tools and
human resources, subcontractors and finance management. It is determined that, while
constructing the duplex residential all the human and physical resources are properly assigned to
separate activities and tasks. Not only this but also, additional resources are also allocated to
those activities which are identified as complex than others.
Macro business environment analysis
The macro business environment deals with different project related factors such as
technological forces, legal forces, social cultural status, ecology, political forces, time pressure
different people related constraints etc. It is duty of the project supervisor and other project team
members to deal with the macro business environment and make sure that all the aspects are

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properly followed throughout the construction project development period. The analysis result
for the factors are analyzed and elaborated in the blow section:
Time pressure: After analyzing the residential duplex construction project details it has
been determined that, time is one of the major knowledge areas that require attention and focus.
The total time allotted for the successful completion of the project is 38 weeks or 9 months.
Therefore, the activities are needed to be arranged accordingly and based on their complexity
cost should be assigned to each task. Based on the type and size of the project it can be said that
the project is large and 9 months range of time may create pressure to the project team
associates. In order to avoid the time pressure issues or challenges the project supervisor need to
arrange professional training and development. Skilled and experienced project team can
accomplish the residential duplex construction project in assigned time of 9 months.
Internal expertise: Availability of internal expertise is beneficial than outsourcing. If the
internal employees are fund to have skilled and experienced then the project sponsors would not
require assigning any additional cost to train them. On the other hand, if it is found that the
internal team is lagging skills and knowledge then again the project supervisor has to arrange
technical and non technical training and development program for the associates.
People related consideration: No such gender discrimination is done while setting target
customer for the project but an age group is considered. People belongs to age group of between
30 and 50 are the target customers. The residential plots are affordable thus people with medium
monthly income can afford the flats. As a result these people are targeted as the customers. It has
been recognized that the project team is comprises of skilled and experience human resources.

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Conclusion
From the overall discussion it has been concluded that there are different types of
feasibility analysis aspects are available such as operational, technical, commercial etc.
However, for this project commercial feasibility study is conducted to ensure its success. It is
measured that, the total outgoing cost and the net holding cost for the project are respectively
$866450 and $145000. It is determined that, the micro business environment can be easily
operated due to the functional applications and abilities. It is also identified that the micro
business environment can bring immediate commercial success for the project supervisor and
similar for the micro business environment. Moreover, it can be said that if the above identified
measures and factors are successfully and thoroughly followed throughout the construction
project development life cycle period then the North Sydney local council will be able to get
economic growth as well from the project.

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