Saudi Arabia has become one of the most attractive destinations globally for new ventures. Driven by Vision 2030, regulatory reform, large-scale public and private investment and strong domestic demand, the Kingdom offers significant opportunities across sectors such as retail, agribusiness, food and beverages, hospitality, logistics and technology.
However, opportunity alone does not guarantee success. Many ventures fail not because the market lacks potential, but because feasibility was assessed superficially or too late in the decision-making process. In Saudi Arabia, where regulatory, cultural and economic dynamics are distinct, conducting a rigorous feasibility study is not optional; it is foundational.
This article outlines the best approach to conducting a feasibility study for a new venture in Saudi Arabia and explains how a structured, data-driven methodology enables confident investment and sustainable growth.
Why Feasibility Studies Are Critical in the Saudi Context
Saudi Arabia’s business environment is evolving rapidly. Regulatory frameworks are modernising, new sectors are opening and consumer behaviour is changing at pace. While this creates opportunity, it also introduces uncertainty.
A feasibility study helps decision-makers:
- Validate real market demand
- Understand regulatory and operational constraints
- Assess financial viability and risk
- Determine optimal entry and operating models
- Avoid capital misallocation
In Saudi Arabia, feasibility is particularly critical due to:
- Sector-specific licensing requirements
- Saudisation and local employment policies
- Regional demand variations across cities
- Infrastructure and logistics considerations
- Cultural and behavioural nuances affecting adoption
A well-structured feasibility study converts ambition into evidence-based decision-making.
What a Feasibility Study Is and What It Is Not
A common misconception is that a feasibility study is simply a financial model or high-level market overview. In reality, an effective feasibility study is a multi-dimensional strategic assessment.
A robust feasibility study:
- Integrates market, operational, financial and strategic analysis
- Tests assumptions rigorously
- Highlights risks and mitigation strategies
- Provides clear go / no-go recommendations
- Informs subsequent strategy and execution
Without this depth, feasibility becomes a formality rather than a decision tool.
A Structured Approach to Feasibility Studies in Saudi Arabia
The most effective feasibility studies follow a clear, phased methodology, tailored to Saudi Arabia’s market realities.
Phase 1: Market and Demand Assessment
The starting point of any feasibility study is understanding whether sufficient, sustainable demand exists.
Key components include:
- Market sizing and growth projections
- Demand drivers and consumption trends
- Customer segmentation and behaviour
- Competitive landscape and market saturation
- Pricing benchmarks and affordability thresholds
In Saudi Arabia, this analysis must account for:
- Regional demand differences (e.g., Riyadh vs Jeddah vs secondary cities)
- Government-led demand in certain sectors
- Demographic shifts and lifestyle changes
- The influence of national transformation initiatives
This phase answers a fundamental question: Is the opportunity real and at what scale?
Phase 2: Competitive and Benchmarking Analysis
Understanding competition in Saudi Arabia requires more than identifying existing players. It involves assessing how the market is structured and where differentiation is possible.
A comprehensive competitive analysis evaluates:
- Direct and indirect competitors
- Business models and value propositions
- Pricing strategies
- Distribution and access channels
- Strengths, weaknesses and gaps
Benchmarking against local, regional and international players provides insight into performance expectations and best practices, helping investors avoid unrealistic assumptions.
Phase 3: Regulatory and Operating Environment Assessment
Saudi Arabia’s regulatory landscape has improved significantly, but remains sector-specific and evolving.
This phase assesses:
- Licensing and approval requirements
- Ownership and legal structures
- Saudisation and workforce regulations
- Taxation and Zakat considerations
- Sector-specific compliance requirements
In parallel, the operating environment is evaluated, including:
- Supply chain and sourcing feasibility
- Infrastructure availability
- Location and real estate considerations
- Technology and systems requirements
This ensures that the business model is operationally viable, not just theoretically attractive.
Phase 4: Operating Model and Strategic Fit
A feasibility study must assess how the venture will operate in practice, not just whether the market exists.
Key questions include:
- What is the optimal operating model?
- Build, partner, or outsource?
- Centralised vs decentralised operations?
- Local vs regional hub strategy?
In Saudi Arabia, strategic fit also includes alignment with:
- Vision 2030 objectives
- Local value creation priorities
- Employment and capability development goals
This phase ensures that the venture aligns with both commercial logic and national priorities, increasing long-term sustainability.
Phase 5: Financial Feasibility and Scenario Modelling
Financial analysis is the most visible component of a feasibility study, but it should be informed by the previous phases, not built in isolation.
A robust financial feasibility assessment includes:
- Capital expenditure requirements
- Operating cost structures
- Financial forecasting and analysis
- Revenue and margin projections
- Cash flow and funding requirements
- Break-even and return metrics
Crucially, scenario analysis is conducted to test:
- Best-case, base-case and downside scenarios
- Sensitivity to pricing, demand and cost assumptions
- Regulatory or timeline delays
This allows decision-makers to understand risk exposure, not just upside potential.
Phase 6: Risk Assessment and Mitigation Planning
No venture is risk-free, particularly in emerging or transforming markets.
A feasibility study must explicitly identify and evaluate:
- Market risks
- Regulatory risks
- Operational risks
- Financial risks
- Execution risks
Each risk should be accompanied by practical mitigation strategies, enabling informed decision-making rather than risk avoidance.
Common Feasibility Study Mistakes in Saudi Arabia
Across projects, several recurring issues undermine feasibility outcomes:
- Overreliance on secondary or outdated data
- Underestimating regulatory complexity
- Treating Saudi Arabia as a monolithic market
- Over-optimistic financial assumptions
- Disconnect between performance expectations
Avoiding these pitfalls requires methodological discipline and local insight.
How Ollen Group Approaches Feasibility Studies in Saudi Arabia
Ollen Group conducts feasibility studies through a structured, consulting-led methodology that integrates research, strategy and financial analysis.
Key elements of Ollen Group’s approach include:
- In-depth market and competitive analysis
- Saudi-specific regulatory and operating assessment
- Strategic operating model design
- Detailed financial forecasting and scenario testing
- Clear, decision-oriented outputs
Feasibility studies are positioned not as standalone reports, but as strategic decision tools that inform go-to-market strategy, investment planning and execution sequencing.
Feasibility as the Foundation for Strategic Execution
A strong feasibility study does not end with a recommendation, it provides the foundation for what comes next.
When conducted effectively, feasibility studies enable:
- Confident capital allocation
- Clear market entry or expansion strategies
- Strategic planning
- Realistic performance expectations
- Smoother execution and stakeholder alignment
In Saudi Arabia’s fast-moving environment, this clarity is a significant competitive advantage.
Final Thoughts: From Opportunity to Informed Decision
Saudi Arabia offers extraordinary opportunities for new ventures, but opportunity without feasibility is speculation.
The best approach to conducting a feasibility study in Saudi Arabia is one that is rigorous, contextual and decision-focused. By integrating market insight, regulatory understanding, operational realism and financial discipline, businesses move forward with confidence or choose not to proceed with equal clarity.
Ollen Group’s feasibility study approach ensures that ambition is matched with evidence, enabling sustainable growth in one of the region’s most important markets.
