Went for an interview and felt I did terribly for this case...Anyone could give me some clue?
The Company provide ESL (English as a Second Language) tuition for kids (age: 3-6) in China. Classes are in small size of 10 students per class, held twice per week, two hours per session. Full year course are 20000 RMB (~3000 USD). The Company wish to open a new branch at a large shopping mall in one central district of Beijing. How should the company estimate the size of the branch that they should plan for?
No data on market share;
No data on competitors;
The Company has 40 branches all over China, and 10 branches in Beijing;
For data not given or unknown, make assumptions or discuss based on various scenarios.
Felt it's a very complicated question, with little data.
I thought of starting from top down, using total no. of kids aged 3-6 in Beijing, then % of them in need of ELS education, % of them being able to afford a rather expensive small-class tuition, % of them interested in our company.
But I encounter a few obstacles:
1. the number I got still seems too large for a branch (perhaps due to point 2)
2. % interested in our company is hard to estimate without competitor/market share data
3. How do I take the self-cannibalisation into consideration? Seems hard to give a number although I know there's 10 branches already in the same city
4. Distance should matter - How do I quantify? Do I only count kids living within a certain radius of the shopping mall instead of all kids in Beijing? But it's not uncommon for people do travel for hours to go tuition.
5. How do I make use of the class length, class size and frequency data?
Some thoughts: From what I understand, tuition centers are not entirely same as retail stores where most of their target audience comes from mall visitors. It is not uncommon for them to advertise online/elsewhere and people will just purposely travel to visit the branch. Hence I didn't use mall traffic as a calculation basis