Schedule mock interviews on the Meeting Board, join the latest community discussions in our Consulting Q&A and find like-minded Interview Partners to connect and practice with!
Back to overview

Judging market attractivity

Hello! I am regularly struggling to determine whether a market is attractive enough or not (say for example, for a market entry case). I don't have problems fetting the information on market size and growth rate, competition etc. But how do I determine whether the market is actually large enough or whether the growth is fast enough? Is this the kind of business judgement I need to get from reading articles etc.? Or are there general rules?

1
3.3k
10
Be the first to answer!
Nobody has responded to this question yet.
Top answer
Sidi
Coach
on Jan 04, 2019
McKinsey Senior EM & BCG Consultant | Interviewer at McK & BCG for 7 years | Coached 400+ candidates secure MBB offers

Hi Anonymous,

there are no fixed rules regarding which size or growth rate makes a market "attractive". However, there are rigorous criteria that need to be met. This is what I call "thinking from first principles"!

Here is what I mean: "large enough" or "fast enough" are attributes that can only be defined against the prevalent objective. The actual question is:

  • "Is the market size or growth rate sufficient to reach the objective?"

This objective can either be defined as a clear target value (e.g., "break even within 3 years", or "reach EUR 100 millions in sales by 2022"), or in terms of exceeding opportunity costs (e.g., "we have expanded our production capacity and will expand to a new market if the expected additional profits there exceed the additional profits we would expect if we just pump additional volumes into our existing market").

So in summary, you always need to start your thinking from the objective, and then assess whether the market preferences will allow you to meet this objective in a better way than any other available strategic alternative.

Cheers, Sidi

Similar Questions
Consulting
Steve Jobs Critics about Consulting
on Jul 09, 2024
Global
3
2.4k
Top answer by
Florian
Coach
1400 5-star reviews across platforms | 600+ offers | Highest-rated case book on Amazon | Uni lecturer in US, Asia, EU
56
3 Answers
2.4k Views
+1
Consulting
Trading public stocks prohibited in McKinsey?
on Oct 08, 2024
Global
5
2.3k
Top answer by
Laura
Coach
Ex-Bain Consultant // DM me to book a complimentary coaching session
50
5 Answers
2.3k Views
+2
Consulting
MBB vs Other Firms
on Mar 29, 2025
Global
8
600+
Top answer by
Evelina
Coach
EY-Parthenon (7 years) l BCG offer holder l 97% success rate l 30% off first session l free 15' intro call l LBS
19
8 Answers
600+ Views
+5