Market sizing: Steel demand for wind turbines in Europe 2030 

Hi there,

You'll get the best out of this exercise if you try it yourself and post here for feedback.

Here's a hint: How many turbines do you think are currently built per year? How much will that increase (based on what you know about climate pledges + Ukraine war impact)? And how much steel does 1 wind turbine need?

How to think about 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!

Remember that there's rarely a "best" answer with market sizing. What's important is that you break down the problem the way it makes sense to you. Importantly, break it down so that the assumptions you make are the ones you're most comfortable in.

For example, do you know all the major brands? Great go with that. Do you understand all the segments of that country's population (either age or wealth or job breakdown)? Go with that. Do you know the total market size of the tourism (or hotel) industry? Then break it down that way.

Some tips:

1. Just like in a case, make sure you understand the question - what are you really being asked to calculate
2. Decide whether a top-down or bottom-up approach is best
3. Figure out what you know you know, and what you know you don't know, but could estimate
   1. This helps you determine how to split out buckets
4. Stay flexible - you can start with a "high-level" market sizing, but gauge your interviewers reaction....if it looks like they want you to do more...then go along level deeper in terms of your splits

An Example

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

And here's a practice Q&A:

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.

Agree with Ian that you really need to at least try to answer it yourself.

Another way to think about it is as follows

• Current electricity demand
  • Amount generated through coal/non renewables
  • Amount generated through renewables that are not wind (e.g., nuclear, solar etc.)
  • Amount generated through wind
  • Amount of turbines it takes to generate that demand (typically interviewer will help with this)
  • Amount of steel used in one turbine (again typically interviewer will help with this)
• Expected change in total electricity demand and expected change in demand for steel if you keep current demand static as a percentage or
• OR expected change in total electricity demand and expected change in demand for steel if you increase it based on some reasonable assumptions

Best,

Udayan

(editiert)

Hi 

From my personal experience when I was practicing for case interviews, such market sizing cases always seem daunting at first glance esp. when you have no idea of the industry/context that is being talked about. But if you try and solve it with first principles thinking, the logic for most remains the same (quite a lot of good content on preplounge library). Happy to provide you a solution (which might not be the only way of solving it btw) but i would advise you to try and crack it first on your own so you can start developing the thinking process (cues - top down energy requirements in UK, wind share, energy per windmill…).

I also have a lot of other market sizing questions if you want to have dedicated sessions. 

Good luck anyway!