A feasibility study and a business case are two different documents that help companies make decisions.
These are very similar but there are some key differences between them which I will outline below:
What is a feasibility study in the context of new product development?
Developing a new product can be very risky and companies need to ensure that they have thoroughly considered all the implications and potential pitfalls before launching a new product.
A feasibility study is conducted as part of this process and helps to determine whether a proposed new product is financially viable. They are normally done at the concept stage of new product development.
Feasibility studies are highly confidential. Businesses often don't understand the strategic gravity of undertaking a new product development project. Feasibility studies are used to show the commercial jeopardy of choosing not to do something.
What is a business case?
A business case is used to justify approval to proceed and allocation of funds for the realisation of the suggested new initiative. Business cases generally assume that the initiative is feasible and aim to build a funding submission based on conclusions reached in the preceding feasibility study - they are an evaluation of the business case.
What is the difference between Feasibility Study and Business Case?
The difference between a feasibility study and a business case study is that the first one examines if an initiative is possible to do, while the second one makes a case for it. A feasibility study looks at if something can be done, while a business case study looks at if it should be done.
The documents should be complementary in that they help decision-makers choose whether to proceed with a new product.
A business case would recommend the money to do something, whereas a feasibility study would say what can be done given financial constraints.
Feasibility studies are more detailed and have a lot of analysis. Business cases are less complicated because their purpose is different.
When should you use each type of document?
The level of detail varies between feasibility studies and business case submissions; however, they are typically undertaken at different stages in the New Product Development (NPD) journey.
A feasibility study is normally carried out early in the product development process to evaluate new ideas and opportunities. It generally considers only broad implications, without delving too far into operational issues.
A business case can be undertaken at any stage after the initial idea generation but before the final sign-off stage. If a feasibility study highlights significant problems with a new product idea, it may be necessary to go back and conduct a business case.
What are the prerequisites for each type of document?
As stated above, each document is typically conducted at different stages in the NPD journey. However, there are some pre-conditions for both types of documents.
The prerequisites for each type of document will depend on its purpose: before committing any funds or time, you need convincing evidence from your team that this new idea can work out in reality. The difference between these two documents will also depend on whether they're being created by internal teams or external consultants hired by an organization.
Examples of when each document would be used
Examples of new product feasibility studies are, "The market is too small to have an impact", "We don't have the resources to achieve our goals", or "we can't find a way to produce this product at a low enough cost."
Examples of when a business case study would be used: "This product will be in high demand," or, "Investors and customers are interested," or, "Our competitors haven't yet delivered this type of product."