Alle Fragen zum Tag Market sizing - Consulting Q&A - PrepLounge.com

Hi, I would frame it dividing the problem into 2+ parts, after clarifying with the interviewer (e.g. home stereo systems, car stereo, ...). For instance, about the car stereo I would imagine to structure it like a penetration on the premium and luxury segment {e.g. estimate n. of cars, % of the premium (20%?) and its luxury stereo penetration (20%?), % of the luxury (3%?) and its luxury stereo penetration (80%?)}. What do you think?

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

Hi there,

You'll really get the best out of this exercise if you try it yourself. Why don't you post what you're thinking and we can help?

Hint: Do you think this makes more sense top-down or bottom up?

General Tips

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 a similar industry? Then break it down that way.

Hi there,

You'll really get the best out of this exercise if you try it yourself. Why don't you post what you're thinking and we can help?

Hint: Do you think this makes more sense top-down or bottom up?

General Tips

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 a similar industry? Then break it down that way.

So while this sounds like a classic market sizing, knowing a bit about the reality, they clearly fail in this case. There is no one wall, but many different parts, partly connected, partly not, made with different technologies, mud walls, wodden pallisades, bricks, etc...with hundreds of years in between construction, supervised by different cultures, using different technologies.

But in order to be helpful here, you'd want to estimte length, widths, height, maybe split the lengths into parts that are built on different terrain (e.g. 300 km from Tianjin to the border of inner mongolia with 50% hilly terrain, x km through dessert & grassland, etc. and assume different building speeds. That would get you to a number of person-years of building time.

Then you can assume number of available workers, estimate and come up wiht a rough estimation of how long it took them to build the wall.

I think your approach is okay for people based in Dubai or Abu Dhabi, but you are missing out on a significant other portion that is relevant: 1) Visitors and 2) Travellers who are transiting in one of the two cities

Please reach out via DM if you want to discuss this case and/or other market sizing cases in more detail. It is important to get the general thinking right when you are dealing with market sizing cases and I think you have improvement potential here!

Hi there,

You'll really get the best out of this exercise if you try it yourself. Why don't you post what you're thinking and we can help?

Hint: Do you think this makes more sense top-down or bottom up?

General Tips

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 a similar industry? Then break it down that way.

Hi there,

You'll really get the best out of this exercise if you try it yourself. Why don't you post what you're thinking and we can help?

Hint: Do you think this makes more sense top-down or bottom up?

General Tips

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 a similar industry? Then break it down that way.

Hi there,

I think you're confusing a few things here.

Growth rate is the result of our calculations over multiple years.

As such, if, next year, the replacement rate increases, or if more people buy new guns, we'll have growth in the market size/demand.

Growth is not used to calculate market size. The change in market size year on year equals growth...

Hi,

I think you answer the question yourself already. My rule of thumb is: If growth is expected to be significant, you should consider it. If you wouldn't assume major growth (well above inflation, etc.), you don't need to include it, but should mention that you neglect growth. With this strategy, you show that you are aware that growth may be important in specific situations, but also you show that you are able to make pragmatic simplifications.

Being aware of complexity and being able to reduce complexity are to essential skills that you can demonstrate when you apply this strategy.

Hope this helps! Let me know if you need further help on market sizing cases or if you have any other questions that I can help you with.

Cheers, Florian

Hello!

Overall, it looks good.

I agree that some of the sub-questions (e.g., asset mangement firms, how many?) are not what so ever straightforward. In an interview, you would have the chance to ask and get guidance data for those.

Hope it helps!

Cheers,

Clara

Hey there!

What's your approach here? Would you like to tell us your ideas so we can help you to shape them in a better way if needed?

To learn more about market sizing you can check out the following article: https://www.preplounge.com/en/bootcamp.php/case-cracking-toolbox/identify-your-case-type/market-sizing

Hope it helps,

GB

Hi there,

I presume you mean "How MANY restaurants?"

This is a classic market sizing :)

Top Down

1. Population of Paris
2. Breakdown by Age and/or Income Segments
3. Estimate frequency of lunch/dinner outings per week per group (I would clarify that we don't need breakfast places as these are cafes not restaurants)
4. Estimate occupancy + throughput of an average restaurant (obviously during lunch/dinner hours)
5. Multiple 2 with 3. Divide those by #4

And voila, as they say :)

Bottom Up

1. State how many restaurants you see in a given road/strip in Paris
2. Extrapolate out to estimate how many would be in a given arrondisement (either estimate this point-blank if you've lived in one OR estimate how many blocks/roads there are).
3. Figure out if your given arrondisement is an average (i.e. some are more commercial, others more financial, etc.)
4. Multiply by 20 (there are 20 arrondisements)

And voila :)

Of course, for the above, confirm what we mean by Paris. Paris proper = the 20 arrondisements. But, of course, Paris extends far further than just the arrondisements!

General Market Sizing Tips

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.

Hi there,

Great Q - you need to take it into account if we're market sizing outside of one year. That's why it's important to ask clarifying questions before jumping into the market sizing.

Figure out if it's an annual market size or all total possible sales. More likely than not, it will just be annual :)

There are many similar questions with useful answers on preplounge already, like below:

• https://www.preplounge.com/en/consulting-forum/how-would-you-go-about-calculating-how-many-solar-panels-are-used-in-a-country-9320
• https://www.preplounge.com/en/consulting-forum/how-would-you-estimate-the-market-size-for-vegan-shampoos-in-the-uk-9150
• https://www.preplounge.com/en/consulting-forum/b2b-market-sizing-no-b2c-8982
• https://www.preplounge.com/en/consulting-forum/how-to-market-size-the-opportunity-for-stripe-9290
• https://www.preplounge.com/en/consulting-forum/how-many-wealthy-people-are-in-the-uk-8819

Fundamentally the structure and approach will be equivalent in all these cases and in the example you have stated above.

Hey Floyd!

First, thanks for being so active on the Q&A!

Now, I can't help but note that this is like your 10th Market Sizing post.

Furthermore, your approach is always not quite right. You do all kinds of assumptions/step that really just beat around the bush, then you jump to a random estimation. For example, points 1-3 above do nothing for you! Point 4 is the entire point of the case...and you just put a finger in the air and guess. THIS is where you have to start the market sizing (i.e. break things down to figure out what this number could be).

You're really missing the point of market sizing...I highly high advise a coaching session to run home how you need to think about/approach market sizing.

Hey Floyd!

First, thanks for being so active on the Q&A!

Now, I can't help but note that this is like your 10th Market Sizing post.

Furthermore, your approach is always not quite right. You do all kinds of assumptions/step that really just beat around the bush, then you jump to a random estimation. For example, points 1-4 above do nothing for you! Point 5 is the entire point of the case...and you just put a finger in the air and guess. THIS is where you have to start the market sizing (i.e. break things down to figure out what this number could be).

"I assume the % that buys fireworks is 0.1% so 21 K" - THIS is the entire thing you're being asked to estimate! You can't just get a random big number here...it's exactly the same as saying "I think x % of China buys fireworks, therefore x % times China population = my number". This is too simple/made up!

You're really missing the point of market sizing...I highly high advise a coaching session to run home how you need to think about/approach market sizing.

Hello!

Highly uncommon.

Market sizings are included in an overall exercise -most times-.

Hope it helps!

Cheers,

Clara

Hello!

This is a very typical market sizing case, where the key steps are:

• Calculate the total population
• Calculate the % of population that could be interested in this product (this could be done by clustering -the classical ones are age groups, purchaching power, etc.-)
• Calculate the % of the total adressable market that any firm in particular could have -in case it´s asked only-.

For that cited market share, consider how many restaurants need to be open.

I see you only take into consideration rush hour and accomodation during it, but what about take out? It´s huge, and growing.

I would then rather estimate the # of shops considering kitchen outocme capacity during rush hour.

Hope it helps!

Cheers,

Clara