How much time can I take to prepare an approach for a pure market sizing case?

Question

Hi everyone:

I have been practicing market sizing cases lately and was wondering how much time is perceived as adequate for coming up with a market sizing approach?

Some of them are really complex and take a couple of minutes to come up with.

What would you say is the maximum?

Thanks!

Maxim

Answer 1

Dear Maxim,

I think there are 2 major examples of market sizing cases: (1) doing a small market sizing inside a bigger case and (2) doing a case interview solely on market sizing alone. The second case is a small fraction of cases but certainly a possibility (between major firms Oliver Wyman is the most known to do it).

Let's start with example number 1 - since this is just a small step inside the case it's usually something that you can have a grasp pretty quickly - I would so between 30 to 60 seconds is definitely within reason; If it's something really challenging and you are not getting there, sharing your doubts with the interviewer and talking through the problem would give you some time.

The second example is something a little more challenging if a case revolves around just a complex market sizing problem. I would say the ideal time is similar to the time you would take to do a full structure at the beginning of a case which I believe shouldn't go over 2 minutes. I've given full market sizing problems from real interviews and the interviewee took 3 minutes to come up with a strategy to solve the problem and it really felt like a long time in full silence looking to a person thinking about out to approach a problem.

my 2cents, hope it helps!

Answer 2

Hi Maxim,

1m30s should be fine as a threshold for a standard market sizing; 2 minutes could also work if the market sizing is very complex (for example, with multiple estimation layers required). Sometimes, in particular if you have to work on the structure for 2 minutes, the interviewer may try to put pressure, with the standard “Are you ready?” question; most of the time, this is done only to see how you react, and not as a sign you should have taken less time. In this case, you can simply answer with “Sure, just few seconds and will complete it” and complete your structure.

To sum up, I would try not to spend more than 1m30s for standard and 2 minutes for complex market sizing questions.

Best,

Francesco

Answer 3

Hi there,

Providing some market sizing thinking for anyone revisiting this Q&A:

Remember that there's rarely a "best" answer with market sizing. What's important is that you break down the problem the way it makes sense to you. Importantly, break it down so that the assumptions you make are the ones you're most comfortable in.

For example, do you know all the major brands? Great go with that. Do you understand all the segments of that country's population (either age or wealth or job breakdown)? Go with that. Do you know the total market size of the tourism (or hotel) industry? Then break it down that way.

Some tips:

Just like in a case, make sure you understand the question - what are you really being asked to calculate
Decide whether a top-down or bottom-up approach is best
Figure out what you know you know, and what you know you don't know, but could estimate
1. This helps you determine how to split out buckets
Stay flexible - you can start with a "high-level" market sizing, but gauge your interviewers reaction....if it looks like they want you to do more...then go along level deeper in terms of your splits