Could someone please explain the math behind the calculation for the additional revenue through market share increase? Why wouldn't be enough just doing 33% * 4,3 which is the market size? Thanks in advance!
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Additional revenue through market share increase
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Hagen
am 14. Aug. 2023
Coach
Globally top-ranked MBB coach | >95% success rate | 9+ years consulting, interviewing and coaching experience
Hi there,
I would be happy to provide the solution:
- Given that BabyformulaCo will be provided more shelf space, their market share increases from 30% to 33%. However, out of those 5.16m additional cans of baby formula, they sell 3.00m cans via the WIC.
- As such, in order to avoid double counting, you need to subtract the WIC cans from the total additional cans sold to arrive at the additional cans through market share increase (see also here).
Best,
Hagen
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Andi
am 15. Aug. 2023
Coach
BCG 1st & Final Round interviewer | Personalized prep with >95% success rate | 7yrs coaching | Experienced Hires
Hi there,
that's because you'd be double-counting the WIC sales. Need to subtract those 3m that from the total additional cans sold.
Regards, Andi
Cristian
am 18. Aug. 2023
Coach
Top MBB Coach | Most Awarded ex-McKinsey Coach on the platform
Hi there!
With your current approach you'd be double counting the WIC sales.
You need to remove those and you'll get the same answer as in the interviewer notes.
Sharing with you a few more cases based on recent real MBB interviews. They contain detailed interviewer notes so they should come in handy:
Best,
Cristian
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