India’s economy is growing and buzzing with new growth opportunities, mainly due to the new policies and foreign investments. The average GDP growth has been 5.5% over the past decade, and it’s expected to reach 6.3% in FY 2024.
As the West faces economic slowdowns, businesses from the USA, Canada, Australia, and Europe are turning their attention to India’s thriving market because a country with 1.4 billion people makes a great place to do business.
So, whether you’re launching a startup or expanding your established business in the Indian market, you need a feasibility study consulting to get market entry in India.Â
This blog will help you understand the role of the feasibility study, its components, importance, and steps to enter the Indian market effectively. Let’s dive in!
What is a Feasibility Study?
A feasibility study is a way to check if your project is practical and can be successful in the target market or not. It looks at all possible aspects, such as technical, financial, and legal perspectives. This study also helps businesses identify any potential challenges and predict how successful their project could be in the market. These insights will give you a clear picture of what to expect when launching the project in the targeted market.
Components of a Feasibility Study
There are five main parts of a feasibility study:
- Technical Feasibility: It checks if the project can be done using the available technology and resources.
- Economic Feasibility: It looks at the cost and benefits to see if the project makes financial sense.
- Operational Feasibility: It examines if the organization has the skills and resources to run the project successfully.
- Scheduling Feasibility: It makes sure that the project can be completed within the planned time.
- Legal Feasibility: It ensures that the project follows all the laws and regulations.
Why is a Feasibility Study Important for the Indian Market?
India is one of the largest and most diverse countries, with over 1.4 billion people. It’s essential to do a feasibility study in India because of the different cultures, consumer preferences, and economic conditions. Here are some key reasons why a feasibility study is essential for the Indian market:
1. Understanding Regional Differences
India is a very diverse country, which means what works in one place might not work in another. For example, people in cities shop differently than people in villages. A feasibility study helps businesses understand where the product works and create custom strategies that suit each area if both areas need to be targeted.
2. Making Use of Economic Growth
India’s economy is growing, and that unlocks various opportunities for businesses. A feasibility study helps companies to understand the growing opportunities, assess risks, and estimate returns, ensuring they make the most of India’s growth.
3. Checking Resources and Operations
Infrastructure and resources are completely different across India. A feasibility study helps businesses check where they can find all the required resources and infrastructure they need to run their project smoothly. It also identifies possible challenges and suggests solutions to ensure the project goes as planned.
4. Following Legal Rules
Many foreign companies find Indian regulations and laws very complex. This is where a feasibility study helps ensure the projects comply with local laws, avoiding legal problems and making operations smoother.
5. Sticking to Timelines
India is a very competitive market, and on-time project delivery is essential. Otherwise, it can increase costs and miss opportunities. With a feasibility study, businesses can plan timelines, allocate resources, and stick to schedules.
Key Steps to Conduct a Comprehensive Feasibility Study
Here are some key steps to take for a feasibility study:
Market Research and Analysis
Understanding the Indian market is the every step that every business should follow. It involves checking if there’s a demand for their product or service. Also, it’s essential to study Indian people, their buying behaviour, spending power, and regional preferences. These valuable insights help businesses plan their strategies that fit the market needs.
Understanding Regulations
India has many rules and regulations that businesses need to follow, from licenses, permits, and legal requirements to paperwork. You need to ensure that all the legal procedures are correctly followed and avoid legal issues later.
Competitor Analysis
Competitor analysis is the best way to market entry in India and stand out from the competition. First, you need to check who your competitors are, what they’re doing, and what areas they are lacking or gaps that can be filled. By knowing your competitor’s strengths and weaknesses, you can plan statistically and fill the gap to stand out in the market.
Financial Planning
It’s time to do financial planning for your project. You need to calculate all the costs, such as hiring people, buying equipment, and other expenses, and estimate potential profits. Plus, feasibility studies help you assess financial risks and plan for unexpected challenges. So that you can ensure the project is financially stable and worth the investment.
Read Here: The Role of Feasibility Study Consulting in India
Top 5 Challenges and Considerations Specific to the Indian Market
Here are some key challenges and considerations specific to the Indian market:
1. Lack of Reliable Data
One of the common challenges that businesses face while entering the Indian market is the lack of reliable data. It’s tough to find accurate and complete information in India. And without good-quality data, making data-driven decisions and predictions is not possible. To avoid this challenge, businesses need to collect information from multiple sources and double-check everything.
2. Market Uncertainty
The Indian market is uncertain and can quickly change with things like government policies, economic ups and downs, or new rules. So, predicting the market entry in India is challenging. So, every business should plan for these uncertainties.
3. Not Understanding Customers
People in India have different habits and needs depending on their cultures. Businesses need to understand customer behaviour so that it becomes easier to sell their product locally. It’s essential to study customer behaviour first to help companies create products or services that people actually need.
4. Ignoring Competitors
India is the biggest market, and you can easily find your competitors there. But ignoring them isn’t a solution. You need to analyze your competitors and understand how they’re doing, as well as their strengths and weaknesses so that you can plan to target an untapped market entry in India and stand out from the competition.
5. Wrong Financial Estimates
Another common reason for business failure is wrong financial estimates, such as mistakes in calculating costs or profits. If you spend too much on advertising and get less than expected in return, then it may hurt a business financially. So, companies must carefully plan and make accurate financial calculations to avoid these issues.
Case Study: K12 Residential School in Pune, India
AT MARC, we recently helped a K12 Residential School in Pune with a feasibility study. They wanted to ensure that their school would meet high standards in infrastructure, operations, and demand.
So, here’s what we did:
We analyzed some key factors to determine if the location was suitable for the school. Our steps include:
- Industry Cost Analysis: We studied standard costs in the education sector to understand financial benchmarks.
- Main Expense Review: We identified key operational costs that could affect the school’s finances.
- Budget Comparison: We compared expected costs with actual expenses from similar schools.
- Market Demand Study: We analyzed demand for different grades and types of education in the area.
We also conducted detailed research by talking to parents, students, and school staff to understand the local demand for a residential school. Plus, we did some interviews with experts in the education sector, who gave us valuable insights on how the school could stand out in the market.
Outcome:
Our feasibility study provides a clear, detailed plan with strategies for setting up the school and financial forecasts. Now, the school has a clear roadmap to grow and make a positive impact on the education sector.
Also Read: MARC’s Guide to Feasibility Study: Your First Step Towards Business Growth
Let MARC Guide Your Business Through a Feasibility Study!
Nowadays, feasibility studies are the foundation of a successful business.
At MARC, we ensure that we provide end-to-end support and help businesses make data-driven decisions. We help to reduce risks, increase profits, and ensure their long-term success.
Are you ready to grow your business? Connect with MARC Experts today to create your winning strategy!
Frequently Asked Questions(FAQ)
A feasibility study checks if the project is practical and likely to succeed in the targeted market. It helps businesses understand the potential risks, future predictions, and opportunities before starting.
It can spot potential challenges and help businesses plan earlier to avoid costly mistakes.
A feasibility study decides if an idea works or not, while a business plan outlines how to execute the idea.
Yes, but getting help from industry experts is a better idea.
A feasibility study includes market research, financial analysis, technical feasibility, legal compliance, and operational planning.
