How do you go about working out the revenue of a Starbucks store, from coffee only?

Market sizing Market Sizing Beginner Level Revenue analysis
New answer on Feb 29, 2020
4 Answers
4.0 k Views
Anonymous A asked on Feb 14, 2020

Overview of answers

Upvotes
  • Upvotes
  • Date ascending
  • Date descending
Best answer
Luca
Expert
Content Creator
replied on Feb 29, 2020
BCG |NASA | SDA Bocconi & Cattolica partner | GMAT expert 780/800 score | 200+ students coached

Hello,

I would use the following approach:

  1. Identify the bottleneck of the service (e.g. number of seats or cashiers)
  2. Divide the day into different time slot
  3. Make an assumption of the occupancy for each time slot
  4. Calculate the volume of customers
  5. Revenues = Customers x average expenditure

Be careful to make clear the boundary conditions of the case (Are you talking of a standard working day or weekend?Which time of the year?Do we do any delivery service?)

Best,
Luca

Was this answer helpful?
Antonello
Expert
Content Creator
replied on Feb 16, 2020
McKinsey | MBA professor for consulting interviews

Hi,
1. calculate traffic per day in the store (use the bottleneck of seats or cashier)
2. percentage of customers that order coffee
3. average selling price per coffee

Best,
Antonello

Was this answer helpful?
Clara
Expert
Content Creator
replied on Feb 14, 2020
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

Classic market sizing question, all comes down to P x Q.

  • Q (i.e., quantity of cups sold):
    • Estimate number of hours in which the store is open
    • Calculate the traffic in each of the hours (doing it in groups, such as high, medium and low traffic).
  • P (i.e., average price): Given the classic 3 sizes, estimate in your currency an average price per coffee cup.

Hope it helps!

Cheers,

Clara

Was this answer helpful?
Vlad
Expert
Content Creator
replied on Feb 14, 2020
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi,

You should assume the traffic (av wait time in Starbucks) at different times of the day.

Make an assumption of how many of them drink coffee and how many cups

That's it

Best

Was this answer helpful?
Luca gave the best answer

Luca

Content Creator
BCG |NASA | SDA Bocconi & Cattolica partner | GMAT expert 780/800 score | 200+ students coached
59
Meetings
2,935
Q&A Upvotes
32
Awards
5.0
19 Reviews