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
expert
Expert with best answer

Udayan

100% Recommendation Rate

71 Meetings

1,373 Q&A Upvotes

USD 189 / Coaching

2

How important is the rule that You cannot be off the answer for more than 20%?

Dear Team,

I've solved the case about petrol stations in Paris on my own and got a completely different answer. Out of my curiosity, I have verified the real number of petrol stations in Paris (French government shares the list of petrol stations in each municipality) and the real number of stations in all municipalities Metropole Grand Paris is 408. That is far less then specified in case solution, so we are definitely out of the principle "Don't be more then 20% off if you wanna be in the right ballpark". Could you please explain the importance of that principle?

Dear Team,

I've solved the case about petrol stations in Paris on my own and got a completely different answer. Out of my curiosity, I have verified the real number of petrol stations in Paris (French government shares the list of petrol stations in each municipality) and the real number of stations in all municipalities Metropole Grand Paris is 408. That is far less then specified in case solution, so we are definitely out of the principle "Don't be more then 20% off if you wanna be in the right ballpark". Could you please explain the importance of that principle?

2 answers

  • Upvotes
  • Date ascending
  • Date descending
Best Answer
Book a coaching with Udayan

100% Recommendation Rate

71 Meetings

1,373 Q&A Upvotes

USD 189 / Coaching

A lot of times when questions like this are asked, the interviewer does not know the answer themself. The aim of market sizing questions is to test your ability to break down ambiguous problems such as number of petrol stations into more concrete elements such as ratio of petrol stations to cars. Once you outline an approach and follow it to it's logical conclusion, you should arrive at what is a reasonable answer

The final step in this is 'sense-checking' to see if the answer makes sense. For example if you find that there are 100 petrol stations in all of France or 10,000,000 those are not reasonable answers. If you realize this you go back to your approach/assumptions and tweak what may have gotten the random numbers. It is less relevant how far off you are (10%, 20%, 50%) vs how logically sound your approach is and whether you manged to pick up on the fact that your answer is far off.

A lot of times when questions like this are asked, the interviewer does not know the answer themself. The aim of market sizing questions is to test your ability to break down ambiguous problems such as number of petrol stations into more concrete elements such as ratio of petrol stations to cars. Once you outline an approach and follow it to it's logical conclusion, you should arrive at what is a reasonable answer

The final step in this is 'sense-checking' to see if the answer makes sense. For example if you find that there are 100 petrol stations in all of France or 10,000,000 those are not reasonable answers. If you realize this you go back to your approach/assumptions and tweak what may have gotten the random numbers. It is less relevant how far off you are (10%, 20%, 50%) vs how logically sound your approach is and whether you manged to pick up on the fact that your answer is far off.

(edited)

Book a coaching with Vlad

97% Recommendation Rate

389 Meetings

8,090 Q&A Upvotes

USD 239 / Coaching

Hi,

That's the first time I hear about that principle, so I can assure you it's not important.

What's more important is that the numbers should make sense. Eg if you are calculating the luggage carts at the airport terminal and you get let's say 10.000 - looks like the numbers don't make any sense and most probably you've done a mistake

Best

Hi,

That's the first time I hear about that principle, so I can assure you it's not important.

What's more important is that the numbers should make sense. Eg if you are calculating the luggage carts at the airport terminal and you get let's say 10.000 - looks like the numbers don't make any sense and most probably you've done a mistake

Best

Related BootCamp article(s)

Important Facts

It's essential to know some key figures regarding geographies, population, economies for your case interviews. We summarized them for you here.

1 Q&A

Market Sizing

Market Sizing Questions are used to test your quantitative & reasoning skills. Learn more on how interviewers evaluate your given answer!

2 Q&As

Related case(s)

Oliver Wyman case: Full Electrons Ahead

Solved 84.7k 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 5862
| 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 56.9k times
Bain Case: Old Winery You have inherited the “Old Winery” from your grandfather, a winery which 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 the conventional way, i.e. they are not organically farmed and certified. The vine stocks are in a good condition regarding age and care. Overall, 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 wine making, but find the idea of owning a winery exciting. Your plan is to give the winery some fresh impetus.
4.4 5 1497
| Rating: (4.4 / 5.0)

You have inherited the “Old Winery” from your grandfather, a winery which 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 the conventional way, i.e. ... Open whole case

Roland Berger Case: Onlinestar

Solved 38.4k 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, 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 5 807
| 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

TKMC Case: Elevators

Solved 18.3k times
TKMC Case: Elevators Your customer is the market leader in the North American elevator service business. This is divided into the areas of elevator construction, elevator modernization and service. The customer has a particularly strong branch network in medium-sized cities and would now like to expand its business in bigger city centers. His next target is Manhattan and he wonders how big the potential is.
4.2 5 1290
| Rating: (4.2 / 5.0)

Your customer is the market leader in the North American elevator service business. This is divided into the areas of elevator construction, elevator modernization and service. The customer has a particularly strong branch network in medium-sized cities and would now like to expand its business in ... Open whole case

DB MC Case: Einstieg in das internationale Fernbusgeschäft

Solved 5.7k times
DB MC Case: Einstieg in das internationale Fernbusgeschäft Für Unternehmen ergeben sich durch die Digitalisierung neue Chancen und Risiken. Neue Märkte mit großem Potenzial können erschlossen werden – gleichzeitig erhöhen Wettbewerber den Konkurrenzdruck. KMUs, Start-ups und Konzerne bringen unterschiedliche Kompetenzen und finanzielle Möglichkeiten mit. Erst vor wenigen Jahren ist ein Start-up mit Know-how im Online-Vertrieb nach der Änderung des Personenbeförderungsgesetzes in den deutschen Fernbusmarkt eingetreten, welches schnell ein großes Netzwerk an Subunternehmen aufgebaut und damit große Marktanteile gewonnen hat. Dies hatte erheblichen Einfluss auf das Kerngeschäft der Deutschen Bahn. Mit dem Ziel Synergien zu nutzen und die Bedürfnisse des Kunden ganzheitlich zu erfüllen, konzentriert sich die Deutsche Bahn nicht allein auf ihre bisherigen Geschäftsmodelle, sondern kooperiert mit anderen „Mobility-Unternehmen“. Von Ihrem Kunden aus dem Topmanagement wurden Sie als Consultant von DB Management Consulting beauftragt, einen Business Case zu bewerten und zu prüfen, ob die Deutsche Bahn ihr bisheriges Geschäftsmodell öffnen sollte, um durch die Kooperation mit einem etablierten mittelständischen Busunternehmen in das internationale Fernbusgeschäft einzusteigen. Die Deutsche Bahn bietet bereits wenige internationale Verbindungen der Marke „IC Bus“ an, jedoch hat die DB-Tochter in der Vergangenheit große Marktanteile verloren. Im Rahmen der Einführung soll dem Kunden zunächst die Verbindung Hamburg – Lund (Schweden) ohne Zwischenstopp in 7 Stunden angeboten werden. Die Distanz zwischen Lund und Hamburg liegt bei 385 km. Bei erfolgreichem Start ist ein schnelles Roll-out auf andere internationale sowie deutschlandweite Strecken geplant. Im Fokus stehen die Erhöhung des Marktanteils, die Bewertung der Nachfrage des Kunden, der Kosten und Erlöse sowie das prognostizierbare Wachstum im Fernbusmarkt.
4.3 5 127
| Rating: (4.3 / 5.0)

Für Unternehmen ergeben sich durch die Digitalisierung neue Chancen und Risiken. Neue Märkte mit großem Potenzial können erschlossen werden – gleichzeitig erhöhen Wettbewerber den Konkurrenzdruck. KMUs, Start-ups und Konzerne bringen unterschiedliche Kompetenzen und finanzielle Möglichkeiten mit. Er ... Open whole case