Market Sizing

Question

Hi all,

I've been practicing some MS questions, and came across the following one: estimate the revenue of a Starbucks store.

Most answers on PrepLounge regarding this qn and other consulting websites focuses on the bottleneck which is considered to be the number of cashiers (usually 2 cashiers) or in some cases the number of seats. My idea is focusing on the person who crafts the customer drink (barista and usually there is 1 barista per store) as the bottleneck. Would this approach be valid ?

thanks

Answer 1

Hi Anonymous,

Yes, I think this sounds like a pretty good approach and is well-tailored to the specifics of a Starbucks operation. Just remember to adjust somehow for the fact that the Barista would not be at 100% capacity during all of the opening hours.

-A

Answer 2

Yes absolutely. As long as you have a reasonable explanation for why this is the bottleneck (which it is) and how (e.g., 1 barista can make 1 order every x mins) then you will be fine.

Answer 3

Hi, in addition to the solutions proposed by the other coaches in the discussion, I would like to suggest similar cases in the platform to practice with:

https://www.preplounge.com/en/consulting-forum/how-much-would-you-charge-to-clean-all-the-windows-in-seattle-4965
https://www.preplounge.com/en/consulting-forum/market-sizing-milk-consumption-5087
https://www.preplounge.com/en/consulting-forum/how-would-you-calculate-the-value-of-a-cow-4982
https://www.preplounge.com/en/consulting-forum/estimate-number-of-traffic-lights-in-a-london-5692

Hope it helps,
Antonello

Answer 4

Hello,

This approach is also valid. As you mentioned, you need to define what the bottleneck is, i.e., in which point of the sales process the customers are queuing up. In this case, barista could be a better indicator than cashiers.

Best,

Deniz

Answer 5

Hello!

Both indeed are very similar approaches -from the logic that you follow point of view-, since they are focusing on a bottleneck.

Both indeed are totally correct, and which one is the right one for a specific store would depend on how many staff they have alocated to each position (cashier vs. barista).

Hope it helps!

Cheers,

Clara