Cookie and Privacy Settings

This website uses cookies to enable essential functions like the user login and sessions. We also use cookies and third-party tools to improve your surfing experience on preplounge.com. You can choose to activate only essential cookies or all cookies. You can always change your preference in the cookie and privacy settings. This link can also be found in the footer of the site. If you need more information, please visit our privacy policy.

Data processing in the USA: By clicking on "I accept", you also consent, in accordance with article 49 paragraph 1 sentence 1 lit. GDPR, to your data being processed in the USA (by Google LLC, Facebook Inc., LinkedIn Inc., Stripe, Paypal).

Manage settings individually I accept
3

Estimate market size when you know growth per year

Q. The relative five-year survival rate for ovarian cancer is 50%, (50% of patients diagnosed in a particular year will die in 5 years). In 2012, it was estimated that ovarian cancer occurred in 239,000 women and resulted in 152,000 deaths worldwide. What is the market size in 2017?

This is from a real business situation that I was trying to solve for myself. I made some assumptions and arrived at ~2.1 million patients. How would you solve the problem, and what assumptions would you make?

Q. The relative five-year survival rate for ovarian cancer is 50%, (50% of patients diagnosed in a particular year will die in 5 years). In 2012, it was estimated that ovarian cancer occurred in 239,000 women and resulted in 152,000 deaths worldwide. What is the market size in 2017?

This is from a real business situation that I was trying to solve for myself. I made some assumptions and arrived at ~2.1 million patients. How would you solve the problem, and what assumptions would you make?

(edited)

3 answers

  • Upvotes
  • Date ascending
  • Date descending
Best Answer

No expert by any means but this seems like a "fun" problem.

I would solve it by doing:

1) If survival rate is 50% in 5 years I assume that per year there is a 10% ppl dying from it.

2) If in 2012 there were 152,000 deaths relate to it must mean the size market in 2011 was 152,000/10%= 1.52M ppl

3) If we assume 239,000 ppl are getting OC and 152,000 are dying there is an annual increase of 87,000 ppl in the original market. - Which means roughly a 6% per year increase.

4) So a simple why to do it is to compound the growth over the following years: 1.52M*(1+.06)^6 which is roughly 2.12M ppl

----

I would, however, add some "risks" and assumptions with this solution:

1) World pop. was roughly 7B is 2012 and in 2017 is 7.5B. That's more than 7% increase which will have an impact on results.

2) We are assuming the net between occurrence and deaths will remain the same which could be highly unlikely with medical and technical advances.

No expert by any means but this seems like a "fun" problem.

I would solve it by doing:

1) If survival rate is 50% in 5 years I assume that per year there is a 10% ppl dying from it.

2) If in 2012 there were 152,000 deaths relate to it must mean the size market in 2011 was 152,000/10%= 1.52M ppl

3) If we assume 239,000 ppl are getting OC and 152,000 are dying there is an annual increase of 87,000 ppl in the original market. - Which means roughly a 6% per year increase.

4) So a simple why to do it is to compound the growth over the following years: 1.52M*(1+.06)^6 which is roughly 2.12M ppl

----

I would, however, add some "risks" and assumptions with this solution:

1) World pop. was roughly 7B is 2012 and in 2017 is 7.5B. That's more than 7% increase which will have an impact on results.

2) We are assuming the net between occurrence and deaths will remain the same which could be highly unlikely with medical and technical advances.

(edited)

Hi, shouldn't this ( be raised to the power of 5 if calculating between 2012 - 2017? — Lily on Oct 06, 2018

Hi, shouldn't this ( be raised to the power of 5 if calculating between 2012 - 2017? — Lily on Oct 06, 2018

1.52M*(1+.06)^6 — Lily on Oct 06, 2018

1.52M*(1+.06)^6 — Lily on Oct 06, 2018

This is essentially a Present and Future value of an annuity disguised as a case problem. I won't be giving away the solution but you should read about the PV and FV formulaes and think about how to apply this here. Hint: the interest rate "i" for FV is essentially the growth rate you are assuming for the market.

This is essentially a Present and Future value of an annuity disguised as a case problem. I won't be giving away the solution but you should read about the PV and FV formulaes and think about how to apply this here. Hint: the interest rate "i" for FV is essentially the growth rate you are assuming for the market.

In 2007, 304,000 cases (152000*2) were diagnosed. in 2012 it declined to 239,000.

Average annual decline rate - (((239/304)^(1/5))-1)*100 = 5%

2013 - 239000*0.95 = 227,050 cases

2014 - 227050*0.95 = 215,698 cases

2015 - 215698*0.95 = 204,912 cases

2016 - 204912*0.95 = 194,667 cases

2017 - 194667*0.95 = 184,934 cases

Adding all cases from 2013 to 2017 estimates total ovearian cancer patients diagnosed at 1,027,260 cases .

Just my logic...

In 2007, 304,000 cases (152000*2) were diagnosed. in 2012 it declined to 239,000.

Average annual decline rate - (((239/304)^(1/5))-1)*100 = 5%

2013 - 239000*0.95 = 227,050 cases

2014 - 227050*0.95 = 215,698 cases

2015 - 215698*0.95 = 204,912 cases

2016 - 204912*0.95 = 194,667 cases

2017 - 194667*0.95 = 184,934 cases

Adding all cases from 2013 to 2017 estimates total ovearian cancer patients diagnosed at 1,027,260 cases .

Just my logic...

Related case(s)

Oliver Wyman case: Full Electrons Ahead

Solved 103.2k times
Oliver Wyman case: Full Electrons Ahead Your client, large automotive OEM WyCar, has developed its first fully electric vehicle (EV) and introduced it as a pilot on the Austrian market last year. However, sales have been far below the expected numbers. The management has engaged you to support them in understanding the reasons and advise them on how to adjust the product offering.
4.6 5 6562
| Rating: (4.6 / 5.0)

Your client, large automotive OEM WyCar, has developed its first fully electric vehicle (EV) and introduced it as a pilot on the Austrian market last year. However, sales have been far below the expected numbers. The management has engaged you to support them in understanding the reasons and advise ... Open whole case

Bain Case: Old Winery

Solved 71.6k times
Bain Case: Old Winery You have inherited the “Old Winery” from your grandfather, a winery that has been family-owned for five generations and can be dated back to the 16th century. Half of the eleven hectares are used to grow white grapes, the other half to grow red grapes. They are grown in a conventional way, i.e. they are not organically farmed and certified. The vine stocks are in a good condition regarding age and care. Overall, the only ¼ of the harvest is made into wine by the winery itself; the rest is sold. Your grandfather never wanted to change the image of the winery and left the managerial and administrative task to a young and energetic wine-maker. Due to the not so well-known brand, the demand for the “Old Winery” wine is currently rather low. You do not intent to run the winery operatively, given your limited knowledge of winemaking, but find the idea of owning a winery exciting. Your plan is to give the winery some fresh impetus.
4.4 5 1948
| Rating: (4.4 / 5.0)

You have inherited the “Old Winery” from your grandfather, a winery that has been family-owned for five generations and can be dated back to the 16th century. Half of the eleven hectares are used to grow white grapes, the other half to grow red grapes. They are grown in a conventional way, i.e. the ... Open whole case

Roland Berger Case: Onlinestar

Solved 50.9k times
Roland Berger Case: Onlinestar Onlinestar, an online retailer of furniture and garden products (core business), has grown significantly in recent years as a result of an expansion of its product portfolio. The company mainly imports goods from Chinese manufacturers but also operates its own production of cat lavatories (special business) in Eastern Europe. The company sells its goods via Amazon and eBay, and recently via an online shop on its website. Despite this development, the financial ratios have deteriorated in recent years. In particular, the gross profit margin decreased significantly. Combined with a significant increase in shipping costs, this led to a negative result for the first time in the recently ended fiscal year and a resulting strained financial situation. Against the background of expected stagnating sales for the current financial year, short-term action is required. The board of Onlinestar asks you for an analysis of the reasons for the negative result as well as a derived recommendation for action. As a consultant, you should bring in your knowledge in online trading and develop solutions. In addition, the management board would like to receive a sales and gross profit plan from you for the current financial year.
4.3 5 1061
| Rating: (4.3 / 5.0)

Onlinestar, an online retailer of furniture and garden products (core business), has grown significantly in recent years as a result of an expansion of its product portfolio. The company mainly imports goods from Chinese manufacturers but also operates its own production of cat lavatories (special b ... Open whole case

Nutripremium

Solved 70.9k times
Nutripremium Nutripremium is a very well-known premium nutrition food company in Europe (€1 billion revenue last year). It is based in Spain and has an excellent market share not only in its home country but also in Portugal, France, Italy and Germany.  Nutripremium has two main lines of products: Vitamin-supplements for pregnant women Concentrated dehydrated aliments and vitamin pills for sick patients (with Diabetes or Cancer). The CEO of Nutripremium thinks that the market in Europe is starting to get saturated and wants you to analyze the Chinese market. What are the key areas you would explore to determine whether this is a good idea?
4.5 5 2284
| Rating: (4.5 / 5.0) |

Nutripremium is a very well-known premium nutrition food company in Europe (€1 billion revenue last year). It is based in Spain and has an excellent market share not only in its home country but also in Portugal, France, Italy and Germany. Nutripremium has two main lines of products: Vitamin-su ... Open whole case

Children vaccine

Solved 63.0k times
Children vaccine Beyer, one of the biggest pharmaceutical companies in the world, just invented a very reliable vaccine against Chickenpox, a disease that affects children in the age from 2 to 16 years. Beyer came to you wondering what their potential sales in Europe in the first year would be if they launched this product next year. They are only interested in the overall sales revenue as they already know that the vaccine can be sold for a profit. This is more meant to show them how big the volume they have to supply is and what the revenue would be.
4.4 5 2292
| Rating: (4.4 / 5.0) |

Beyer, one of the biggest pharmaceutical companies in the world, just invented a very reliable vaccine against Chickenpox, a disease that affects children in the age from 2 to 16 years. Beyer came to you wondering what their potential sales in Europe in the first year would be if they launched this ... Open whole case