Market sizing case: How many blood-pressure monitors in the US?

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Neue Antwort am 24. Jun 2021
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Ironhan fragte am 23. Jun 2021

Hi, I was browsing some of the past market sizing questions and got stuck on this particular one.

Here's what I thought I could do.

1. No. blood-pressure monitor = (Owned by hospitals) + (Owned by households)

2. Owned by hospitals = (No. Hospitals) * 1 (Assume each hospital owns only one blood-pressure monitor)

3. No. Hospitals = (US population * % Getting sick * % Going to the hospital * No. of visits) / (Hospital Capacity)

Question: I guess the "household-owned blood-pressure monitors" part is pretty straightforward, as well as the number of people going to the hospital. Where I got stuck is "Hospital capacity/year + utilization %". Any help on this bit would be much appreciated!

Also, I'm wondering if this approach makes sense and whether there's a better way to calculate this. (Especially curious if there's any solid 'supply-side' approach)

Thanks in advance :)

(editiert)

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Antonello
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antwortete am 23. Jun 2021
McKinsey | MBA professor for consulting interviews

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:

Hope it helps,
Antonello

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Ian
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antwortete am 23. Jun 2021
BCG | 100% personal interview success rate (8/8) and 95% candidate success rate | Personalized interview prep

Hi there,

I'd recommend a slightly different approach. The main problem is that you're totally guessing on most numbers here. The entire point of market sizing breakdowns is to break down the problem into sections you can reasonably estimate.

Additionally, when making assumptions, they need to be within the realm of reason - there is a 0% chance that each hostpital only has 1 blood-pressure monitor!

Here's what I would do:

  1. Breakdown US into # of towns/counties, small cities, medium cities, and large cities
  2. Estimate # of hospitals per town/city AND # of clinics
  3. Estimate # of blood-pressure monitors in a given clinic (here you can say there are a handful) and in a given hospital (visualize how many rooms there might be. Safe to say there's around a 50% "blood-pressure monitor occupancy rate" per room
  4. Add these all up

Then, make your life easier by doing some % of this # to estimate how many monitors are owned by individuals and businesses.

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Ironhan am 23. Jun 2021
Hi Ian, thanks for your help. Yes, it definitely was a stretch to think 1 blood pressure monitor per clinic. Got a question on the 'hospitals per town', would it be reasonable to approach this with the population estimates? Eg. 50% of the population lives in large cities -> Large cities have 1 hospital/clinic per 30,000 people. So in the case of the US, it would be 300M * 50% / 30,000 = 5,000 hospitals in the large cities of the US. (Do the same of medium and small towns)

(editiert)

Ian am 24. Jun 2021
Hi Ironhan, yes, in general this works. But it's just weird to say 1 hospital/clinic per 30,000 people. You have no idea! You keep segmenting and making up numbers. Please don't do this. Rather, visualize a large city...how many hospitals does it typical have?
Henning
Experte
antwortete am 23. Jun 2021
Bain | passed >15 MBB interviews as a candidate

I think your approach makes sense, but would change it in two places:

  • No of Hospitals:
    • I'd try to make it more tangible. Guessing number of people that get sick and utilization will be tricky.
    • A better way might be to imagine your hometown: Roughly count the number of hospitals and take the population. Then you can scale that number by total population
    • If you want to make this more specific, you can assume different hospital densities for urban vs rural areas to add one more level of specificity
  • No of monitors per hospital
    • I struggle to see how every hospital would only have one monitor
    • Here you should ask for clarification what that monitor actually is. I assume it's something like a device that more or less every patient in ICU is hooked up to
    • Then you can break down the number of ICU beds and assume spare capacity in case one breaks (add e.g. 30%)

Hope this helps!

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Clara
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Content Creator
antwortete am 24. Jun 2021
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

Overall it´s good, however, I wouldn´t agree with the assumption that each hospital only has one monitor. Don´t you need at least one per each ICU bed, plus ORs, etc?

That would be one of the ocasions in which you would need to ask and work with the interviewer to understand better what they are referring to. 

Hope it helps!

Cheers, 

Clara

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Antonello gab die beste Antwort

Antonello

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McKinsey | MBA professor for consulting interviews
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