The business concept of marketing handcrafted hats and scarves is now in the feasibility analysis stage (Scarborough, 2011). The feasibility analysis will either support the idea or show the reasons as to why the idea should not be pursued (Scarborough, 2011). The analysis will include the following areas: Market Analysis, Product or Service Analysis, and Financial Analysis (Scarborough, 2011).
According to Kuehn, Grider and Sell (2009), the focus of the market analysis is,
“evaluating the likelihood and degree of success possible in the target market” (p. 5). In order to
create a viable analysis the Five Forces Model will be utilized (Scarborough, 2011).
The first force is rivalry among competing companies (Scarborough, 2011). The
competition is other businesses that create handcrafted products customized to the individual. Research found websites that sold handcrafted items but few offered different variations to meet the customer’s preferences. This provides a unique product that is not currently being offered (Scarborough, 2011).
Forces two and three reference the bargaining power of suppliers and buyers (Scarborough, 2011). Products will be purchased via retail so neither area is a factor at this time. Once the business reaches a level of profitability that will support items being bought at wholesale, these two sections of the model will be reevaluated (Kuehn, Grider & Sell, 2009).
The fourth force is the threat of new entrants (Scarborough, 2011). If the concept of customizing products to the individual is noticed by other crafters, their current business may be modified or inspire an idea in someone new to the industry to provide the same service (Scarborough, 2011). If the business concept is put into place, monitoring other websites for changes to their product offerings or identifying new sites will be crucial (Scarborough, 2011).
The fifth force in the model is the threat of substitute products or services (Scarborough,
2011). At this time, “quality substitute products are not readily available” (Scarborough, 2011, p. 104). The business will focus on a niche market in order to counter some of the power of the five forces (Scarborough, 2011).
After completing the market analysis, the next step is to perform a product or service feasibility analysis as to whether handcrafted hats and scarves are a needed commodity (Scarborough, 2011). It is also important to find out if potential customers are willing to wait to have a quality product customized instead of purchasing a finished product in a shorter length of time (Woodham & Cort, 2013).
In order to determine this, a customer survey was completed (Scarborough, 2011). The survey included the following questions with a ranking system to determine the value of the answer (Scarborough, 2011):
• Would you purchase a product designed to your individual specifications?
• Is speed of service more important than quality and uniqueness of...