Hi Gee,

You'll learn a lot more from this by trying it out yourself first! Why don't you post your approach here and we can provide commentary?

How to approach market sizing

It's very simple: Do the approach the is the easiest for you given the question.

Are they asking you to estimate something where you don't even know where to begin from the top (maybe you have 0 clue as to the market size of the industry, the GDP of that country, etc. etc.)? Then do bottom-up!

Alternatively, does it seem impossible to do a realistic from-the-ground-up estimation of something (perhaps it requires just far too many steps and assumptions)? Then do top-down!

Fundamentally, you need to take the approach that just makes the most sense in that circumstance. Quickly think about the key assumptions / numbers required and whether you 1) Know them or 2) Can reasonably estimate them. If you can, go ahead!

An Example

He's a Q&A for a great market sizing question here asking to estimate # of electric charging stations in a city in 10 years:

https://www.preplounge.com/en/consulting-forum/how-would-you-solve-this-market-sizing-question-from-roland-berger-7631

This one could be answered top-down (as I did) by estimating population of the city, # of drivers/ cars, etc. etc.

OR, it could be answered bottom-up by estimating # of stations you see per block (or # of gas/petrol tanks), % increase this might be over time (or # of EV stations that would be needed per gas tank given EV stations take 10 times as long), and # of blocks you'd estimate the city to have.

Take a look here for additional practice! https://www.preplounge.com/en/management-consulting-cases/brain-teaser/intermediate/taxis-in-manhattan-market-sizing-229

Hi Gee,

Lots of useful answers below already, so just wanted to add another resource to help you understand different structuring methodologies:

• Free Guide: Mastering Structuring & Brainstorming

Best,
Cristian

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Hi Gbenga,

suggest you give it a try and post your proposed approach - will make it a bit easier for coaches to give you concrete feedback.

Generally speaking, this type of question will require a demand-sided market sizing approach, where you should segment the UK market (user base) into different customer groups and gauge their resp. appetite to buy.

If you'd like to learn how to do sizings both on the supply and demand side, don't hesitate to reach out to me or other coaches. 

Hope this helps.

Regards, Andi

Hi Gee,

There are different ways of breaking this down, but I would do roughly something like this:

• Start with the UK population
• Estimate # of car owners (some factors you might want to consider include family size, age, income here)
• Estimate how many of them are going to be buying a car each year

If you try to lay out your approach to this question, we can offer some feedback!