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How to capitalise untapped market?

Market analysis market estimation market size
New answer on Jul 17, 2020
3 Answers
1.2 k Views
Anonymous A asked on Jul 14, 2020

Hi there,

I had a case interview in which the interviewer asked about the untapped market for a sports aparel company. The company counted 180 stores and there was data available about our current revenues and growth rates, but no information about competitors. The question was how we could estimate which part of the untapped market we could reach based on available information. and how we could tap that market.

How would you answer this question?

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Axel
Expert
Content Creator
replied on Jul 15, 2020
Bain Consultant | Interviewer for 3 years at Bain |Passionate about coaching |I will make you a case interview Rockstar

Hi,

In order to answer this question you would need to have a better understanding of the segmentation of the market:

- Are there product categories that are untapped and attractive?

- Are there customer segments that the company is not targeting?

- Are there geographies where the company is not present in?

This analysis could then be strengthened by understanding the growth, profitability, and competitive intensity in the various sub-segments and geographies.

-A

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

Hello!

Could you first clarify if this was an interview for MBB, and whether it was "normal" or written case?

Even when data is not available from the beggining, it´s fundamental to ask for the key pieces. In this case, for instance, doing a market penetration/estimation of market share without knowing competition and fragmentation is impossible.

Did you ask, then got told there is no data? It just seems very bizarre to me.

Best,

Clara

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Ian
Expert
Content Creator
replied on Jul 17, 2020
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate

Hi there,

That's a tough question!

Fundamentally, we can't even begin to think about it without first asking some clarifying questions.

That being said, I think what we could fundamentally look at is our existing customers.

1) Let's look at the 180 stores and see differences in shopping demographics. If we can identify while stores are doing well, and see where their demographics drop off, we could understand who we're missing out on.

2) In addition to this, we should know the types of neighborhoods we're in. If stores in young, affluent areas are doing very well, but stores in older, poorer areas aren't, then we have some insights into our customers.

3) Furthermore, where do we not have stores where our demographics fit/suit? I.e. are there a bunch of young/affluent areas where we should be?

4) Are there any demographics that we haven't tested out. I.e. do we not have stores with lots of x type of customers? Should we trial it.

5) How do we tailor our stores to different customer bases?

^This actually isn't the most structured response, but it should be good food for thought :)

As (almost) always, casing/consulting is about identifying differences.

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