1. What Is a Feasibility Study, and Why Is It Critical in Arab Markets?

A feasibility study is an integrated analytical process designed to answer one fundamental question:
Should we invest in this project?

In Arab markets, feasibility studies are shaped by several unique factors:

  • Market diversity: Ranging from large, high-volume consumer markets (such as Egypt and Algeria) to high purchasing-power economies (such as GCC countries).

  • Evolving regulations: Frequent updates to commercial and investment laws require continuously updated legal analysis.

  • Emerging opportunities: Strong momentum in renewable energy, fintech, food security, and digital transformation sectors.

2. Scientific Methodology for Market Sizing

Credible market analysis relies on understanding the TAM / SAM / SOM framework, the global standard trusted by investors:

  1. TAM – Total Addressable Market
    The total demand for the product or service across the entire country or region.

  2. SAM – Serviceable Addressable Market
    The portion of the market you can realistically serve based on geographic reach and logistics.

  3. SOM – Serviceable Obtainable Market
    The realistic market share you expect to capture after accounting for competition.

SEO Insight:
When searching for a ready-made feasibility study, remember: accurate and defensible market figures are what differentiate a project in bank financing and investment committees.

3. Financial Modeling: The Language Investors Understand

The objective of financial feasibility is to prove profitability using key performance indicators (KPIs):

  • Net Present Value (NPV): If NPV is greater than zero, the project creates value for investors.

  • Internal Rate of Return (IRR): Enables comparison with alternative investments such as real estate or fixed deposits.

  • Break-even Point: The point at which revenues equal costs and the project begins generating profit.

NPV=t=1∑n​(1+i)tRt​​−Cost

4. Technical and Operational Feasibility (From Concept to Execution)

This section answers a key question: How will the product be manufactured or the service delivered?

  • Location: Selecting a strategic site (near ports, industrial zones, or population centers).

  • Supply chains: Securing raw material sources and alternatives in case of global disruptions.

  • Technology: Choosing equipment and software that balance capital expenditure (CapEx) with operating expenditure (OpEx).

5. Risk Analysis and Sensitivity Testing

A sophisticated investor always asks: What if?

A robust feasibility study must include sensitivity analysis to test resilience against:

  • A 10 – 20% increase in raw material costs.

  • Sudden demand contraction.

  • Exchange rate fluctuations, especially in inflation-prone economies.

6. Efficiency Levers: Accelerating Feasibility Study Preparation

To deliver high-quality feasibility studies in less time, modern tools are essential:

  • Automation: Programmed financial models that reduce human error.

  • Big Data: Leveraging national statistics offices and international organizations (e.g., World Bank).

  • Flexible templates: Sector-adaptable models (commercial, industrial, service-based).

7. Trusted Data Sources for Arab Investors (2020–2026)

Avoid outdated information. The most reliable current sources include:

  1. National statistics offices
    (e.g., CAPMAS in Egypt, General Authority for Statistics in Saudi Arabia).

  2. Central banks: For interest rates and inflation data.

  3. UN Comtrade: For import/export and trade flow analysis.

  4. Economic intelligence platforms: Such as Statista and Trading Economics.

Case Study: Recycling Plant in an Industrial Zone

Challenge: Volatile energy prices and transportation costs.

Solution: A financial model linking production costs to global energy prices, supported by an alternative plan using solar energy to reduce long-term operating costs.

Result: The Internal Rate of Return (IRR) increased from 12% to 19% after optimizing technical efficiency.

Feasibility Study Checklist

  1. SWOT analysis: Identify strengths, weaknesses, opportunities, and threats.

  2. Competitive landscape: Who are the top five players in your market?

  3. Organizational structure: Define required human resources and their costs.

  4. Legal requirements: Ensure all licenses and permits are secured.

  5. Cash flows: Prepare financial projections for at least five years.

  6. Marketing plan: How will you acquire your first customer?

  7. Timeline: When will actual operations begin? (Gantt Chart)

Common Feasibility Study Mistakes  and How to Avoid Them

  • Ignoring working capital: Many projects fail due to insufficient liquidity during the first six months.

  • Personal bias: Overestimating sales due to emotional attachment to the idea.

  • Overlooking hidden costs: Such as annual licensing fees or equipment maintenance.

Key Takeaways

  1. A feasibility study is a decision-making tool, not a formality.

  2. Realistic market sizing is the backbone of sustainable ventures.

  3. Strong financial models must be flexible and regularly updated.

  4. Reliable data distinguishes professional consultants from amateurs.

  5. Success in Arab markets requires deep understanding of local consumer behavior.

7-Step Action Plan (Start Now)

  1. Clarify the idea: Write a precise description of your offering.

  2. Initial research: Spend at least 10 hours reviewing sector reports.

  3. Field interviews: Collect direct feedback from potential customers.

  4. Calculate fixed costs: Rent, equipment, licenses.

  5. Calculate variable costs: Raw materials, labor, marketing.

  6. Build the financial model: Use Excel to calculate NPV and IRR.

  7. Review and validate: Present your draft to a financial or legal expert.

References

  • World Bank reports on Doing Business (2024–2025).

  • UNIDO – Guide to Feasibility Study Preparation.

  • Annual economic bulletins of Arab chambers of commerce.