Entrepreneurship: Successfully Launching New Ventures, 2/e

1
Entrepreneurship Successfully Launching New
Ventures, 2/e Bruce R. Barringer R. Duane Ireland
Chapter 3
2
Chapter Objectives(1 of 3)

• Explain what a feasibility analysis is and why
  its important.
• Discuss the proper time to complete a feasibility
  analysis when developing a business venture.
• Describe the purpose of a product/service
  feasibility analysis and the two primary issues
  that a proposed business should consider in this
  area.
• Identify three primary purposes of concept
  testing.
• Explain a concept statement and its contents.

3
Chapter Objectives(2 of 3)

• Define the term usability testing and explain why
  its important.
• Describe the purpose of industry/market
  feasibility analysis and the three primary issues
  to consider in this area.
• Explain the difference between primary research
  and secondary research.
• Describe the purpose of organizational
  feasibility analysis and list the two primary
  issues to consider in this area.

4
Chapter Objectives(3 of 3)

• 10. Explain the importance of financial
  feasibility analysis and list the most critical
  issues to consider in this area.

5
What Is Feasibility Analysis?

• Feasibility Analysis
• Feasibility analysis is the process of
  determining whether a business idea is viable.
• It is the preliminary evaluation of a business
  idea, conducted for the purpose of determining
  whether the idea is worth pursuing.
• Feasibility analysis takes the guesswork (to a
  certain degree) out of a business launch, and
  provides an entrepreneur with a more secure
  notion that a business idea is feasible or viable.

6
When To Conduct a Feasibility Analysis

• Timing of Feasibility Analysis
• The proper time to conduct a feasibility analysis
  is early in thinking through the prospects for a
  new business.
• The thought is to screen ideas before a lot of
  resources are spent on them.
• Components of a Properly Conducted Feasibility
  Analysis
• A properly conducted feasibility analysis
  includes four separate components, as shown in
  the figure on the next slide.

7
Feasibility Analysis
Role of feasibility analysis in developing
successful business ideas
8
Four Forms of Feasibility Analysis
Product/Service Feasibility Analysis
Industry/Market Feasibility Analysis
Organizational Feasibility Analysis
Financial Feasibility Analysis
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Product/Service Feasibility Analysis

• Product/Service Feasibility Analysis
• Is an assessment of the overall appeal of the
  product or service being proposed.
• The idea is that before a prospective firm rushes
  a product or service into development, it should
  be confident that the product or service is what
  its prospective customers want.
• The two components of a product/service
  feasibility analysis are
• Concept testing.
• Usability testing.

10
Preparing a Concept Statement(1 of 3)

• Concept Statement
• Before a company undertakes product/service
  feasibility analysis, a concept statement should
  be developed.
• A concept statement is a one page description of
  a business that is distributed by a startup
  entrepreneur to people who are asked to provide
  feedback on the potential of the business idea.
• The feedback will hopefully provide the
  entrepreneur (1) a sense of the viability of the
  business idea, and (2) suggestions for how the
  idea can be strengthened or tweaked before
  proceeding further.

11
Preparing a Concept Statement(2 of 3)

• Information to Include
• A description of the product or service being
  offered.
• The intended target market.
• The benefits of the product or service.
• A description of how the product will be
  positioned relative to similar ones in the
  market.
• A description of how the product or service will
  be sold and distributed.
• Information about the founder or founders of the
  firm.

12
Preparing a Concept Statement(3 of 3)
New Venture Fitness Drinks Concept Statement
13
Usability Test(1 of 2)

• Usability Testing
• Is the method by which users of a product are
  asked to perform certain tasks in order to
  measure the products ease-of-use and the users
  perception of the experience.
• Usability tests are sometimes called user tests,
  beta tests, or field trials, depending on the
  circumstances involved.
• While it is tempting to rush a new product or
  service to market, conducting a usability test is
  a good investment of an entrepreneurs or firms
  resources.
• Many products that consumers find frustrating to
  work with have been brought to market too
  quickly.

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Usability Test(2 of 2)

• Usability Testing (continued)
• Prototype
• Conducting a usability test typically requires
  the development of a prototype.
• A prototype is the first physical depiction of a
  new product, which is usually still in a rough or
  tentative mode.
• Virtual Prototype
• A virtual prototype is a computer-generated 3D
  image of an idea. It displays an invention as a
  3D model that can be viewed from all sides and
  rotated 360 degrees.

15
Product/Service Feasibility Analysis in Action
Role of feasibility analysis in the development
of successful business ideas at Activision (an
electronic games company)
The Activision Green Light Process
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Industry/Market Feasibility Analysis(1 of 6)

• Industry/Market Feasibility Analysis
• Is an assessment of the overall appeal of the
  market for the product or service being proposed.
• For industry/market feasibility analysis, there
  are three primary issues that a proposed business
  should consider
• Industry attractiveness, market timeliness, and
  the identification of a niche market.
• Industry Attractiveness
• A primary determinant of a new ventures
  feasibility is the attractiveness of the industry
  it chooses.

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Industry/Market Feasibility Analysis(2 of 6)
Characteristics of attractive industries for new
ventures

• Are large and growing (with growth being more
  important than size).
• Are important to the customer.
• Are fairly young rather than older and more
  mature.
• Have high rather than low operating margins.
• Are not crowded.

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Industry/Market Feasibility Analysis(3 of 6)

• Industry Attractiveness
• Although the criteria shown on the preceding
  slide is an ideal list, the extent to which a new
  businesss proposed industrys growth
  possibilities satisfy these criteria should be
  taken seriously.
• In addition to evaluating an industrys growth
  potential, a new venture will want to know more
  about the industry it plans to enter.
• This can be accomplished through both primary and
  secondary research, as explained in the next
  slide.

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Industry/Market Feasibility Analysis(4 of 6)
Role of Primary and Secondary Research in
Investigating Industry Attractiveness
Type of Research
How It Is Conducted
This is research that is original and is
collected by the entrepreneur. In assessing the
attractiveness of a new market, this typically
involves an entrepreneur talking to potential
customers and key industry participants.
Primary research
This is research that probes data that are
already collected. Examples of where this data
might come from are industry-related
publications, government statistics, competitors
Web sites, and industry reports from research
firms like Forrester Research.
Secondary research
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Industry/Market Feasibility Analysis(5 of 6)
Market Timeliness Considerations
Nature of Product or Service Introduction
Major Considerations

• Is the window of opportunity open or closed?
• Is now a good time for a new market entrant
  (i.e.,
• are customers buying, are industry incumbents
• making money?)

Improvement on something already available in the
marketplace

• Should we try to capture a first-mover advantage?

Breakthrough new product or service, which should
establish a new market segment
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Industry/Market Feasibility Analysis(6 of 6)

• Identification of a Niche Market
• A niche market is a place within a larger market
  segment that represents a narrower group of
  customers with similar interests.
• For a new firm, selling to a niche market makes
  sense for at least two reasons.
• It allows a firm to establish itself within an
  industry without competing against major
  competitors head on.
• A niche strategy allows a firm to focus on
  serving a specialized market very well instead of
  trying to be everything to everybody in a broad
  market, which is nearly impossible for a new
  entrant.

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Organizational Feasibility Analysis(1 of 4)

• Organizational Feasibility
• Is concerned with determining whether the
  business itself has sufficient skills and
  resources to bring a particular product or
  service idea to market successfully.
• There are two primary issues to consider in this
  area
• Management prowess.
• Resource sufficiency.

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Organizational Feasibility Analysis(2 of 4)

• Management Prowess
• A firm should candidly evaluate the prowess, or
  ability, of its management team to satisfy itself
  that management has the requisite passion and
  expertise to launch the venture.
• Two of the most important factors in this area
  are
• The passion that the solo entrepreneur or the
  founding team has for the business idea.
• The extent to which the solo entrepreneur or the
  founding team understands the markets in which
  the firm will participate.
• Solo entrepreneurs or founding teams with
  established social and professional networks also
  have an advantage.

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Organizational Feasibility Analysis(3 of 4)

• Resource Sufficiency
• This topic pertains to an assessment of whether
  an entrepreneur has sufficient resources to
  launch the proposed venture.
• The focus here should be on nonfinancial
  resources in that financial feasibility is
  considered separately.
• To test resource sufficiency, a firm should list
  the 6 to 12 most critical nonfinancial resources
  that will be needed to move the business idea
  forward successfully.
• If critical resources are not available in
  certain areas, it may be impractical to proceed
  with the business idea.

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Organizational Feasibility Analysis(4 of 4)
Examples of nonfinancial resources that may be
critical to the successful launch of a new
business

• Availability of affordable office or lab space.
• Likelihood of local and state government support
  of the business.
• Quality of the labor pool available.
• Proximity to key suppliers and customers.
• Willingness of high quality employees to join
  the firm.
• Likelihood of establishing favorable strategic
  partnerships.
• Proximity to similar firms for the purpose of
  sharing knowledge.
• Possibility of obtaining intellectual property
  protection in key areas.

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Financial Feasibility Analysis(1 of 5)

• Financial Feasibility
• For feasibility analysis, a quick financial
  assessment is usually sufficient.
• The most important issues to consider at this
  stage are
• Total start-up cash needed.
• Financial performance of similar businesses.
• Overall attractiveness of the proposed venture.

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Financial Feasibility Analysis(2 of 5)

• Total Start-Up Cash Needed
• The first issue refers to the to the total cash
  needed to prepare the business to make its first
  sale.
• An actual budget should be prepared that lists
  all the anticipated capital purchases and
  operating expenses needed to generate the first
  1 in revenues.
• When projecting start-up expenses, it is better
  to overestimate rather than underestimate the
  costs involved.
• Murphys Law is prevalent in the start-up
  worldthings will go wrong. It is a rare
  start-up that doesnt have some setbacks in
  getting up and running.

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Financial Feasibility Analysis(3 of 5)

• Financial Performance of Similar Businesses
• Estimate the proposed start-ups financial
  performance by comparing it to similar, already
  established businesses.
• There are several ways to doing this, all of
  which involve a little ethical detective work.
• First, there are many reports available, some for
  free and some that require a fee, offering
  detailed industry trend analysis and reports on
  thousands of individual firms.
• Second, simple observational research may be
  needed. For example, the owners of New Venture
  Fitness Drinks could estimate their sales by
  tracking the number of people who patronize
  similar restaurants and estimating the average
  amount each customer spends.

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Financial Feasibility Analysis(4 of 5)

• Overall Attractiveness of the Investment
• A number of other financial factors are
  associated with promising business startups.
• In the feasibility analysis stage, the extent to
  which a business opportunity is positive relative
  to each factor is based on an estimate rather
  than actual performance.
• The table on the next slide lists the factors
  that pertain to the overall attractiveness of the
  financial feasibility of the business idea.

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Financial Feasibility Analysis(5 of 5)
Financial Factors Associated With Promising
Business Opportunities

• Steady and rapid growth in sales during the
  first 5 to 7 years in a clearly
• defined market niche.
• High percentage of recurring revenuemeaning
  that once a firm wins a
• client, the client will provide recurring
  sources of revenue.
• Ability to forecast income and expenses with a
  reasonable degree of
• certainty.
• Internally generated funds to finance and
  sustain growth.
• Availability of an exit opportunity for
  investors to convert equity to cash.

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Chapter 3 Feasibility Analysis

• Review Questions

32
Review Question 3 - 1

• What is a feasibility analysis? What is it
  designed to accomplish?
• Answer Feasibility analysis is the process of
  determining if a business idea is viable. As a
  preliminary evaluation of a business idea, a
  feasibility analysis is completed to determine if
  an idea is worth pursuing and to screen ideas
  before spending resources on them.

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Review Question 3 - 2

• Briefly describe each of the four areas that a
  properly-executed feasibility analysis explores.
• Product/service feasibility analysis is an
  assessment of the overall appeal of the product
  or service being proposed.
• Industry/market feasibility analysis is an
  assessment of the overall appeal of the market
  for the product or service being proposed.
• Organizational feasibility analysis is conducted
  to determine whether a proposed business has
  sufficient management expertise, organizational
  competence, and resources to successfully launch
  its business.
• Financial feasibility analysis provides a quick
  financial assessment of the viability of a
  business idea.

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Review Question 3 - 4

• What is a concept statement?
• Answer A concept statement is a preliminary
  description of a business. A concept statement
  represents the first step in a feasibility
  analysis. Feedback from the concept statement
  helps direct the remaining stages of the
  feasibility analysis.

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Review Question 3 - 5

• What is a concept test, and what does it
  accomplish? What are the three primary purposes
  for it?
• Answer A concept test entails showing a
  representation of a product or service to
  prospective users to gauge customer interest,
  desirability, and purchase intent. The three
  primary purposes of a concept test are to
• (1) validate the underlying premise of a product
  or service,
• (2) to help develop the idea, and
• (3) to estimate the potential market share the
  product or service might command.

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Review Question 3 - 6

• What is a usability test, and what does it
  accomplish?
• Answer A usability test is a test that requires
  the user of a product to perform certain tasks in
  order to measure the products ease of use and
  the users perception of the experience. The
  purpose of a usability test is to work the kinks
  and bugs out of a product before it is offered
  for sale to the general public.

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Review Question 3 - 7

• Define prototyping.
• Answer A prototype is a mock-up of a real
  product that is used to gauge customer interest
  in the product and to conduct usability tests.

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Review Question 3 - 8

• Describe what a virtual prototype is and how it
  differs from a physical prototype.
• Answer A virtual prototype is a
  computer-generated 3D image of an idea. It
  displays an invention as a 3D model that can be
  viewed from all sides and rotated 360 degrees.

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Review Question 3 - 11

• Describe the difference between primary and
  secondary research. Provide an example of each.
• Answer
• Primary research is research that is original and
  is collected by the entrepreneur. An example
  would be an entrepreneur distributing a concept
  statement of a business idea and asking for
  feedback.
• Secondary research probes data that are already
  collected. An example would be an entrepreneur
  studying industry publications to gain
  information about potential customers and
  competitors.

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Review Question 3 - 18

• Why is it usually to a firms advantage to be
  located near similar firms in its industry?
• Answer When similar firms are located near each
  other, it is easy for the employees of the firms
  to network with one another. If several similar
  firms locate near one another, there is also an
  incentive for the firms suppliers to locate
  nearby, which helps reduce shipping costs.

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Chapter 3 Feasibility Analysis

• Application Questions

42
Application Question 3 1(1 of 2)

• Jason Palmer has an idea for a new approach to
  personal finance software. He plans to use the
  200,000 inheritance he recently received to
  produce the product and bring it to market. When
  you ask Jason if he has conducted a feasibility
  analysis, he acts alarmed and says, I knew Id
  have to write a business plan, but Im not
  familiar with what you are calling a feasibility
  analysis. I dont want to blow the 200,000 I
  just inherited, so if a feasibility study is
  necessary, Im game. Can you tell me how to
  conduct one? What would you tell him?

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Application Question 3 1(2 of 2)

• Jason should be told that feasibility analysis is
  the process of determining if a business idea is
  viable.
• It is completed to determine if an idea is worth
  pursuing, or whether it should be dropped or
  revised, before a lot of resources are invested.
  
• Jason should be told about the importance of
  writing a concept statement, and using it to get
  feedback on his idea.
• He should also be told about the four stages of
  feasibility analysis, and be informed regarding
  the most important issues to consider in each
  stage.

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Application Question 3 6(1 of 2)

• Marc Blair is planning to open a fitness center
  that will feature a set of exercise machines that
  he designed himself. He would like to do some
  usability testing of the machines, but doesnt
  know how to go about it. If Marc asked you for
  your advice, what would you tell him?

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Application Question 3 6(2 of 2)

• Answer Marc should be told that usability
  testing requires that users of a product perform
  certain tasks in order to measure the products
  ease of use and the users perception of the
  experience. As a result, Marc should ask a group
  of people who would be likely to join his center
  to try using his equipment and give him feedback
  on its ease of use and their overall impressions
  of the equipment. Marc should also observe this
  test group to gain his own impression of how
  easy it is for people to use the equipment. One
  note Marc should be careful to set up the
  usability test with safety in mind. If exercise
  equipment is used incorrectly or by inexperienced
  users, it can cause injury.

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Application Question 3 7(1 of 2)

• Carrie Wells is planning to open a store to sell
  DVDs in Nashville. As part of her feasibility
  study, she hands out a questionnaire to 500
  people in her trade area, asking them to indicate
  whether they would shop at her store. Carrie is
  pleased to find that 75 percent of the people
  surveyed said they would either definitely or
  probably shop in her store at least once a
  month. Should Carrie plan her business based on
  the 75 percent figure? Why or why not?

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Application Question 3 7(2 of 2)

• Answer The 75 percent figure is probably
  optimistic. One caveat regarding survey research
  is that people who say that they intend to
  purchase a product dont always follow through.
  Nonetheless, the 75 percent figure is
  encouraging.

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Application Question 3 11(1 of 2)

• Kate Wilson has developed an innovative suite of
  software products for K12 schools. She is
  wondering if now is a good time to launch a
  business to sell her products. What factors
  should Kate consider in making this determination?

49
Application Question 3 11(2 of 2)

• Answer
• First, Kate should determine whether the window
  of opportunity to launch a suite of software
  products for K-12 schools is open or closed. She
  can make this determination by doing both primary
  and secondary research on her industry, to
  establish how crowded it is with competitors or
  if there are one or two firms that dominate the
  industry. If the industry is excessively
  crowded, or there are strong brand leaders in the
  same part of the industry that Kate plans to
  enter, the window of opportunity may be closed.
  Ultimately, the answer to this question is a
  judgment call on Kates part.
• Second, Kate should study the simple economics of
  the marketplace. She should try to determine (1)
  if K-12 schools are currently buying new software
  products, and (2) if the current companies in the
  industry are making money. If the answer to one
  or both of these question is no, the industry may
  not be hospitable to new firms at this time.

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Application Question 3 15(1 of 2)

• What are some of the red flags that would
  suggest that the overall financial attractiveness
  of a proposed new venture is poor?

51
Application Question 3 15(2 of 2)

• There are a number of red flags that would
  suggest that the overall financial attractiveness
  of a proposed new venture is poor, including the
  following
• Difficult to accurately project the total amount
  needed to launch the venture
• Difficult to project gross sales and net income
• High capital investment relative to the returns
  anticipated
• Risky business
• Slow growth in sales during the first several
  years of the venture
• Low percentage of recurring revenue
• High costs involved with obtaining customers
• Unclear exit opportunities.

52
You Be the VC

• Company Bones In Motion
• www.bonesinmotion.com
• Business Idea
• Turn nearly any cellphone into an automatic
  journal that allows walkers, runners, and bikers
  to record their activities, and benefit to from
  the motivational aspects of keeping track of
  their progress.

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You Be the VC Bones In Motion

• Company
• Bones In Motion
• Business Idea
• Pitch
• Most people know that they need to exercise to
  stay healthy. But simply buying a pair of
  running shoes or a bicycle is rarely the answer.
  People must be motivated to stay committed to an
  exercise plan. One thing that sports
  psychologists have found helps people stay
  committed is to keep track of their daily
  progress. Its also very motivating to people to
  graphically see the results of their exercise
  efforts and to be able to share their progress
  with their family and friends.
• Bones in Motion was created to fit this exact
  need. In the first of what it hopes will be many
  outdoor applications, the company has turned the
  ordinary cellphone into a virtual coach using a
  software application called BiMActive. BiMActive
  is an online service, which is currently
  available to Sprint and Nextel cellphone
  customers, at a cost of 9.99 per month. Bones
  in Motion is negotiating with other cellphone
  service providers and hopes to have more signed
  up soon.
• Continued

54
You Be the VC Bones In Motion

• Heres How It Works
• Heres how the service works. When you start the
  application, you have to wait for a few seconds
  for it to hone in on your GPS location (you do
  need a GPS-equipped cell phone). For the GPS to
  work, you need to be outdoors with a view of the
  sky. Once you start to run, walk, or bike, it
  records your distance, speed, pace, location,
  elevation, and estimated amount of calories
  burned. All you need to do is keep your
  cellphone with you. Once finished, your workout
  data is wirelessly uploaded to a Web page with
  the route you just covered superimposed on a
  Google map. A complete set of stats for your
  workout is available, including the distance
  covered, splits, and estimated calories burned.
  You can also keep track of the distance youve
  covered by week, month, or year.
• If youre community-minded you can share your
  results with other BiMActive members. You can
  also post the route you just covered for other
  BiMActive members to see. The difficulty of the
  route is rated by BiMActive based on topography,
  changes in evaluation, and other data. You can
  also look at the routes that other BiMActive
  members have posted.
• BiMActive is just the first in a series of mobile
  lifestyle applications planned by Bones in
  Motion.
• Continued

55
You Be the VC Bones In Motion

• Rate Bones In Motion on a scale from 1 5 on the
  following attributes
• Strength of the New Venture Team
• Strength of the Opportunity
• Strength of the Industry
• Strength of the Business Model
• Continued

56
You Be the VC Bones In Motion

• Strength of the New Venture Team
• 3 (on a scale of 1 5)
• CEO Andrew Graham has 22 years of experience in
  management and marketing with Motorola, including
  12 years as Founder and CEO of industry design
  automation consortium Si2, Inc.
• CTO Jon Werner has 20 years of software
  experience with IBM and several start-ups.
• VP of Operations Spencer Nassar has 22 years of
  experience in product development and operational
  management.
• Continued

57
You Be the VC Bones In Motion

• Strength of the Opportunity
• 2 (on a scale of 1 5)
• This opportunity falls into the same category as
  Riya and Segwayit is novel and interesting but
  has yet to prove that it has a clearly-defined
  market. The BiMActive system will enhance the
  ability of runners, bikers, hikers, and other
  outdoor enthusiasts to record their activities
  and share relevant information with others.
  Were skeptical of the companys ability to gain
  traction in this market for two reasons. First,
  there are an increasing number of devices that
  provide a similar functionality (such as sports
  watches that have GPS capability) that do not
  require a monthly subscription fee and are not
  tied to specific cellphone providers. Second,
  its hard to believe that a large number of
  people, beyond hard-core running, cycling, and
  hiking enthusiasts, will take the time and incur
  the expense necessary to learn the BiMActive
  system.
• Continued

58
You Be the VCBones In Motion

• Strength of the Industry
• 3 (on a scale of 1 5)
• The industry is outdoor enthusiasts that want to
  track their activities and share relevant
  information with others. This strikes us as a
  fairly narrow vertical market, rather than the
  more horizontal market that Bones in Motion seems
  to be gearing up to service. The market should
  be fairly easy to reach, through running and
  cycling stores, periodicals, and Web sites.
  While there are large numbers of runners, bikers,
  and hikers in the U.S., its hard to know how
  many of them would be interested in the product
  that Bones in Motion hopes to bring to the
  market.
• Continued

59
You Be the VCBones in Motion

• Strength of the Business Model
• 3.0 (on a scale of 1 5)
• The business model is to sell a monthly
  subscription to the service (called BiMActive)
  through a cellphone company. Nextel and Sprint
  are currently participating, and more companies
  will presumably sign on.
• Continued

60
You Be the VCBones In Motion

• Overall Score
• Continued

61
You Be the VCBones In Motion

• Decision
• In our judgment, even though the BiMActive system
  may be an exciting product that works, it is
  entering a crowded marketplace with low barriers
  to entry and other products that provide similar
  functionality for a lower price. There is also
  nothing particularly innovative about the
  companys business model. Once they sign up a
  customer, they earn a monthly subscription fee
  (which they share with the cellphone provider)
  until the subscriber decides to drop the plan.
  As far as we can tell, there are no additional
  opportunities to earn revenue from subscribers.
• We would not fund this idea.

62
Case 3.2 Intuit

• The Value of Validating Business Ideas

63
IntuitDiscussion Question 1

• Refer to Table 3.2 in the chapter. To what extent
  does Intuit capture each of the benefits of
  conducting a product/service feasibility analysis
  listed in the table?
• Answer Intuit clearly captures each of the five
  specific benefits listed in Table 3.2.

64
IntuitDiscussion Question 2

• Compare Intuits approach to feasibility analysis
  and usability testing to Salesforce.coms
  approach (Salesforce.com is the subject of the
  Partnering for Success feature in the chapter).
  In what ways are their approaches similar and in
  what ways are they different?
• Answer Both companies have a very user-centric
  approach to creating products and services, and
  solicit a high level of feedback from their
  users. In terms of differences, it appears that
  Salesforce.com involves their customers more in
  the actual design of products, while Intuit
  involves their customers more in assessing ease
  of use. This difference most likely stems from
  the fact that Salesforce.com is strictly a B-to-B
  company, while Intuit is more of a mix of B-to-B
  and B-to-C therefore Salesforce.com is probably
  selling to a more sophisticated clientele, which
  is in a better position to provide input on the
  actual design of products.

65
IntuitDiscussion Question 3

• To what extent do you think Intuits industry is
  attractive? If Intuit conducted an
  industry/market feasibility analysis on the main
  industries in which it participates, what do you
  believe would be the outcome?
• Answer
• Most will argue that Intuit is in a very
  attractive marketplace. The number of small
  businesses in the U.S. and across the world
  continues to increase, expanding the need for
  Intuits products and services. Intuit should
  score high on all three dimensions of
  industry/market feasibility.

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IntuitDiscussion Question 4

• Why do you think Intuit puts so much effort into
  collecting primary research about its users and
  their experiences? Would it be cheaper for Intuit
  to hire a marketing research firm to collect data
  on user preferences? What would Intuit lose if it
  pursued this approach?
• Answer
• Intuit has apparently adopted the philosophy that
  it will collect the lions share of its own
  research. Although hiring a marketing research
  firm to conduct the same research might be
  cheaper, moving in that direction would cost
  Intuit the personal, one-to-one interactions that
  is has with its customers (and potential
  customers).