Feasibility Study Report for New Furniture Business Startup

This feasibility study assesses the practicality of launching a wooden furniture business in a suburban town. It includes a description of the product (doors, windows, staircases), a timeline aiming for a 30% market share by 2022, and a budget of 20,000 euros. The study performs an STP analysis to understand market demand, targeting schools due to the growth of the education industry. External factors are analyzed using PESTLE and Porter's five forces to evaluate the business environment and competitive landscape. Financial projections, including income, expenses, and capital, are presented along with recommendations for market research and strategic planning. The study references relevant literature on feasibility studies and new product development.

FEASIBILITY STUDY

EXECUTIVE SUMMARY
 The case depicts starting of a business and the factors affecting a new business with
financial projections and the time line to achieve them.

Description of Product
 The business being launched is of wooden furniture comprising of doors, windows and
staircases in a suburban town.
 Schedule: To achieve a 30% market share by 2022.
 Budget: The budget is to be kept 20000 euros.

Market Research and Analysis
 An STP analysis will clearly represent the demand of product in a particular segment
and the unique features associated with the product.
 Segmentation: The furniture industry is quite large and so are its customers. Here
customers which can be segmented are the households, hotels near by and the schools.
 Targeting: Since the growth of education industry is fast in the area, schools can be the
target segment for the business requiring furniture in many form.
 Positioning: This requires certain unique features to be promoted of the product which
can be the quality of wood used having a considerable guarantee period and at the same
time an impressive look

External Factors
 A PESTLE analysis of the business will show the impact of macro environmental factors on the business:
Political
 They are the factors affecting the business within a country like government guidelines, export and trade
policies.
 This being a new business won't be affected much as it wouldn't be in a high tax bracket and would have to
just follow the SME guidelines.
 Economic: Economic environment at present would be affecting the business. Due to covid, it may take a
little time for business to expand its wings.
 Social: The people being of suburban background won't have much high expectations regarding the design
where the company can save money without compromising on quality.
 Technological: The company being new in the market would have to do an extensive study of current
technology prevalent in the market and try to adopt the same.
 Legal: The business will have to take a license for opening the venture and its production beforehand.
 Environmental: Company will have to get environmental clearance for the land it will be operating upon.

Porter's five forces
 It will explain the factors affecting the business negatively or positively. They can be
explained as below:
 Competition in the Industry
 Being a small town, the competition prevalent is low thus helping the company in getting
customers.
 Potential of new entrants
 It happens that people will not open an enterprise closer to type of one already opened.
However, they can do it in a range of few km . So the threat of business being affected is
medium
 Power of Suppliers
 As it is a locality where wooden business is not much it will be likely that suppliers can
provide raw materials at a lesser price to gain customer in a new area.

Porter's five forces
 Power of Customers
 Customers not having much access to many firms in the area will not
pose a high threat although they would be looking for a fair deal from
a new business.
 Threat of Substitute Products
 Business will have to do market research about customer needs as
they can look for something less costlier. Here quality maintenance
will surely give an advantage over substitutes.

FINANCIALS
Income Expenses
Capital 20000 Raw materials 1000
Cash 1000 Direct Labour 500
Fixed assets 5000 Variable
expenses
300
26000 1800

Recommendations
 Company can perform an extensive market research about the
demand prevalent, the competition factor and then do its pricing and
other strategies.

REFERENCES
 Kampira, A., 2018. Feasibility Studies: New Product Development and Launch (Vol. 1).
Abisha Kampira.
 Cheskes, S. and et.al., 2020. Improving access to automated external defibrillators in
rural and remote settings: a drone delivery feasibility study. Journal of the American
Heart Association. 9(14). p.e016687.
 Afilipoae, T.P. and et.al., 2018. Launch Vehicle-MDO in the development of a
Microlauncher. Transportation Research Procedia. 29. pp.1-11.
 Heinrich, C.J. and Kabourek, S.E., 2019. Pay‐for‐Success Development in the United
States: Feasible or Failing to Launch?. Public Administration Review. 79(6). pp.867-
879.