PROJECT PLANNING, ANALYSIS, AND MANAGEMENT

1. Project- Introduction

A project can be defined as a temporary and unique undertaking designed to achieve specific
objectives within a set timeline, budget, and scope. Unlike routine operations, projects are non-
repetitive and require tailored planning, execution, and control of resources to achieve the
intended outcomes. They typically have clear starting and ending points and are aimed at
delivering a product, service, or result that fulfills stakeholder needs and expectations. For
instance, India’s Unique Identification Authority of India (UIDAI) project, launched in 2009,
sought to enroll over 1.23 billion citizens into the Aadhaar biometric system, revolutionizing the
delivery of public services. Similarly, when American Airlines merged with US Airways, they
initiated a project to integrate technological systems and align business processes, which helped
the company successfully navigate the complexities of the merger and improve its operations.
These examples highlight how projects, when well-planned, can transform industries and create
lasting impact.

2. Core Components of Project Analysis

Project analysis is a critical phase in project management, as it evaluates various dimensions to

determine whether a project is viable, practical, and beneficial. Four key components are
involved.

 Market analysis focuses on estimating the demand for the proposed product or service
and the market share the project can realistically achieve.
 Technical analysis assesses whether the necessary infrastructure, technology, and
expertise are available to implement the project successfully.
 Financial analysis looks into the project’s financial soundness, examining whether it can
generate sufficient revenues to meet costs and provide expected returns.
 Finally, economic analysis broadens the perspective to include social costs and benefits,
such as the project’s impact on employment, regional development, or environmental
sustainability.
3. Feasibility Study

A feasibility study is an in-depth investigation to determine whether a proposed project is

technically feasible, economically justifiable, and operationally achievable. There are six critical
elements of a feasibility study.

 Market feasibility investigates customer needs, market size, trends, and potential
profitability, ensuring there’s adequate demand for the product or service.
 Site analysis involves evaluating the geographical and infrastructural suitability of the
proposed project location, including factors like accessibility, utilities, and environmental
considerations.
 Supply and demand analysis assesses whether raw materials and inputs are available and
whether the market can absorb the project’s output.
 Capacity utilization examines how effectively resources (like labor, machinery, and
technology) will be used, minimizing waste and maximizing productivity.
 Financial analysis digs into cost structures, break-even points, profitability, and
investment requirements, helping decision-makers weigh risks against rewards.
 Competition analysis studies the competitive landscape to identify potential challenges,
market barriers, and the project’s differentiators.
 A feasibility analysis is like the backbone of project evaluation. It gives you the
confidence to move forward or the wisdom to stop before wasting resources.

1. Why Do Feasibility Studies Fail?

o Inaccurate cost estimates or ignoring hidden costs.
o Overly optimistic revenue projections.
o Underestimating competition.
o Lack of stakeholder consultation (ignoring customer or employee input).
o Changing external environment (e.g., regulatory changes, inflation, political
instability).
2. Example of a Complete Feasibility Study Imagine a startup planning to launch electric
scooters in an Indian city:
 o Market Feasibility: Is there enough demand among commuters? Are people
willing to switch from petrol scooters?
o Site Analysis: Are there enough charging points in the city?
o Supply & Demand: Are batteries and parts easily available?
o Capacity Utilization: Can they run enough scooters profitably at scale?
o Financial Analysis: Are investors willing to fund? When will the break-even
point come?
o Competition: What are Ola Electric and Ather Energy doing, and how can they
differentiate?

4. Market and Demand Analysis

At the heart of project success lies a thorough understanding of the market and demand
dynamics. Market and demand analysis helps project managers estimate the overall demand for a
product or service and determine how much of this demand their project can realistically capture.
This process involves addressing two essential questions: What is the total potential market size,
and what share can the project expect to secure? Addressing these questions requires a detailed
exploration of factors like consumption patterns, population growth, income levels, price
sensitivity, availability of substitutes, and distribution networks. Without this foundational
analysis, projects run the risk of developing products or services that either overshoot market
needs or fail to stand out among competitors, leading to financial losses and missed
opportunities.

5. Steps in Market and Demand Analysis

The process begins with situational analysis and specification of objectives, where managers
engage informally with customers, competitors, and intermediaries to gain insights into
consumer preferences, competitor strategies, and industry practices. Clearly specifying
objectives at this stage is vital to avoid collecting irrelevant data and to ensure that every
research effort yields meaningful insights.

Next is the collection of secondary information, where existing data sources such as government
reports, census data, economic surveys, and company annual reports are gathered. Secondary
data provides a foundational understanding of the market but must be critically evaluated for
reliability, relevance, and accuracy. Analysts must ask: Who collected this data, when, why, and
how representative is it?

Because secondary data often leaves gaps, the conduct of a market survey follows. This involves
gathering primary data through surveys, either using census methods (covering the entire
population) or, more commonly, sample surveys (covering a representative subset). Market
surveys capture detailed information on total demand, demand growth rates, segment-specific
demand, price and income elasticity, consumer preferences, and distribution practices.

The characterization of the market step synthesizes the collected data to describe the market
landscape—identifying past and current demand, pricing trends, distribution channels, consumer
segments, supply competition, and relevant government policies. This picture enables the next
phase: demand forecasting, where projections of future demand are made, using statistical and
qualitative techniques to estimate sales volumes and market potential. The final stage, market
planning, uses these insights to craft practical strategies for entering and succeeding in the
market, covering areas like product positioning, pricing, promotion, and distribution.

1. Situational Analysis and Specification of Objectives

 Go beyond informal chats. Use focus groups, expert interviews, and customer reviews.
 Example: A new café could talk to residents, local businesses, and real estate agents to
understand foot traffic and demand.
 Clearly define goals: Are you estimating demand, customer preferences, or pricing
sensitivity?

2. Collection of Secondary Information

 Include government and international reports (like World Bank or IMF), trade association
reports, and academic research.
 Example: A company planning to export goods can use WTO trade statistics or UN
COMTRADE data.
 Be cautious of outdated or biased data — old reports may not reflect post-pandemic
consumer trends.

3. Evaluating Secondary Data

 Don’t assume published numbers are always trustworthy.

 Example: Is the sample size of a market study large and diverse enough? Were surveys
conducted online or offline — and does that affect representativeness?

4. Conduct of Market Survey

 Decide on survey methods: face-to-face interviews, phone surveys, online polls, or

mystery shopping.
 Include qualitative data like customer emotions, unmet needs, and barriers to purchase.
 Example: If you’re launching a new health drink, survey not just preferences but also
concerns about sugar, price, or health claims.

5. Characterization of the Market

 Segment the market: urban vs. rural, young vs. old, premium vs. budget buyers.
 Understand distribution networks — is the product sold in supermarkets, online, or mom-
and-pop stores?
 Example: For fashion brands, you must know if consumers prefer e-commerce or
physical stores.

6. Demand Forecasting

 Use methods like:

o Time series analysis → looking at past sales trends.
o Regression analysis → studying relationships between demand and factors like
price or income.
o Expert opinion → getting input from industry veterans.
 Remember, no forecast is 100% accurate — prepare best-case, average, and worst-case
scenarios.
7. Market Planning

 Convert insights into actionable strategies.

 Example: If survey shows high demand but price sensitivity, plan for an affordable
product line and an aggressive launch offer.
 Include product development, branding, advertising, and channel partnerships.