Why is 90% market penetration used in the revenue calculation? Doesn't that mean 90% of customers already own a camera and are unlikely to buy a new one? Shouldn't the focus be on the remaining 10% who haven’t purchased yet?
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Hi there,
I would be happy to share my thoughts on your question:
- First of all, you are right that the expression is ambiguous. Market penetration shows who is already a customer, even if they may be customers again in the future.
- Moreover, I would advise you to clarify any unclear assumptions during the case interview, although this is unfortunately impossible with such case studies.
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Best,
Hagen
Hi there,
It does seem a little ambiguous considering that this is not a recurrent purchase and we’re talking about the percentage of the addressable market that will buy during that year in order to calculate revenues.
Good question. Always make sure to bring up your POV when your logic is different from the interviewers one, sometimes cases can be interpreted in more than one way.
Best,
Mari
Hi there,
Market penetration refers to customers buying a camera that year. Penetration growing slower year or year means revenues grow slower as well.
Best,
Alberto
Hi there,
I see you already received clarifying answers on your question, so I'm only adding here a resource that you might find useful for casing:
Best,
Cristian
