Estimation Questions

estimation marketsizing
New answer on Aug 26, 2019
2 Answers
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Anonymous A asked on Aug 26, 2019

Hi,

If we make a good structure in the estimation cases, very solid & meaningful structure, however the assumptions we take, say too high or too low, so that we miss the estimation with one zero less or one zero more, quite a significant difference.

Does this mean that the end of the case (&interview) or they test your thinking structure so the actual number doesn't matter that much?

Thanks

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John
Expert
replied on Aug 26, 2019
Ex Bain Case Team Leader I Focus on Private Equity I +80 interviews conducted at Bain I All cases based on real life cases

Hi,

it really depends. If your assumptions are a little of on each step of the estimations you can get quickly to 5-10X the true market size. I think you would only fail if you made completely unlogical/ unrealistic assumptions and would not revise them when the interviewer asks. E.g. when estimating the size of the app market in a developing country, assuming that 50% of people have an iPhone.

Tough to say without a concrete example. But I always recommend to learn some of the key figures for your market e.g. number of inhabitants, number of households, average income, age distribution, etc. to be on the safe side.

Best,

John

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Anonymous A on Aug 26, 2019

Thanks! Newspaper readers in India for example...20% or 30%, 10% gap makes 130M people difference

Vlad
Expert
Content Creator
replied on Aug 26, 2019
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi,

In general, they mostly care about your approach and how you justify your assumptions and the actual number do not matter. Moreover, if the assumptions are unrealistic - the interviewer will mention that. So don't worry

Best

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John gave the best answer

John

Ex Bain Case Team Leader I Focus on Private Equity I +80 interviews conducted at Bain I All cases based on real life ca
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