today I will tell you about the market feasibility study, and how market feasibility play important role in success of business.In a previous article we discuss the term entrepreneur as you know the entrepreneur is a person who start his own business so how entrepreneur select the suitable market for his or her business, for that purpose we have to analyze the market so there is necessary to understand the market feasibility.
market feasibility helps in assessing viability of new ventures or business and provide information to make critical decisions regarding going forward or starting new business.
Market feasibility involves following important factors or models
Before going forward i want to tell you about the word enterprise because for market feasibility is necessary for your business venture or enterprise.
it refers to entity or company which is made to gain commercial goals or business ventures.
What is term market feasibility?
Market feasibility or market analysis involves following important factors or models
Porter s model
Now what is pest analysis?
Pest is abbreviation of political economical social technological analysis
Now how political factors play important role in feasibility study or market analysis
Political factors includes
Legal terms which support your business. and also business laws such as labor laws and international trade laws
Political and government stability
Political stability has a great impact on economic situation of a country take the example of stock exchange index points which get affected by political scenario
and some time stock market may get crashed, if political situation of a country is too much bad. Foreign investors also observer the political situation of a countries. Investors show hesitation in investment in case of bad political scenario.
Taxation policies usually involve sale taxes value adds taxes by government sometimes government shows flexibility in taxation policies. Which simply means relaxing entrepreneurs in taxes?
Labor unions and their involvement in decision making bodies , a successful entrepreneur make good relations with his labors
labor laws include the medical facilities bonus annual pay act and which an entrepreneur can give to his labors. These laws are provided by united nations organization.
Foreign trade regulations
Laws which are important for export and import regulations.
Basically word Swot is abbreviation of strength weakness opportunities and threat of an entrepreneur enterprise.
The strength of enterprise is that ability of enterprise that make the strong position in the market.and that strong position helps in gaining success the better advertisement of the product ,good quality of the products these are the basic keys which make an enterprise strong .strength is also ability of taking advantages from the opportunities available in the market such as lack of competent and product suitability for specific market or region.
weakness is just the opposite of strength actually weakness is that inability which lead to the disadvantage’s for the enterprises such as failure of taking advantages that are available in market for example not to provide a better quality of products to customers even if there is other competent in the market.
it refers to that advantages which an enterprise can easily gain from market such as relaxation in tax polices from the government legal support of business by the government ,extra demand of specific product in the market and technological factors these are the opportunities which an enterprise can avail easily from the market
Threats are the most important factor in Swot analysis because if the precautions are not made against threats than it will make a lot of difficulties for an enterprise. Mostly the threats for enterprise is the Competitive rivalry in the markets, lack of the market for the specific products strict taxation polices from the government and strict regulations. Political instability a bad political scenario is also considered as threat.
the porter model is also known as porter five forces model a best tool use for industry analysis
it generally consist of
Threat of new entrants
Bargaining powers of suppliers
Bargaining power of buyers
Threat of s substitute products.
Competitive rivalry among competitor
Threats of new entrants
this factor act as barrier for an enterprise if the barrier is strong then chances of new entrants in market are very low the barrier is strong in that case when enterprise offers better packages to customers and better quality of product to the customers. If the entry barrier is not strong then there are much chances that new entrants played there role in the market.
Threat of substitute products
Substitute products are refer to those products which are similar to original product in every aspect but different in price .so substitute of different product also made threats for enterprises take a example of coffee and tea which are substitute of each other so high prices of tea may switch customers towards coffee. so in that scenario an enterprise get loss when there the substitute of product is available in market.
Competitive rivalry among competitors
Competitive rivalry is that factor which forces an enterprise to bring changes in the product continuously. This can be define by a simple example of mobiles phones. new models of are introduced in market continuously .the cell phone companies try their best to bring changes in their products which are mobile phones to make them compatible with other brands . Enterprises usually done strong advertisement of their products.an d also shows flexibility in there products for better edge over there competitors.
Bargaining power of buyers
Bargaining power of buyers is that ability of buyers to bring down the price of products and services they buy. The profitability in industry is affected a lot if the bargaining power of buyers is high there are two main reasons when bargaining power of buyer is high if the buyer purchases a large portion of specific product or he can easily switch to other enterprise.
Bargaining power of suppliers
Bargaining power of suppliers is basically that ability of suppliers to increase the price of products supplied to enterprises in the market there is only one reason when bargaining power of suppliers if the few suppliers supply products to relatively large number of enterprises in the market or if the product or service is unique.
the above article helps you in way that how your enterprise can achieve success and how you analyze the market by using above important tools.