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Ian

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3

How to estimate the # of business in china?

Hello everyone!

What do you think of this approach?

  • To estimate the # of business that buy firewors I would find # people of working age on China that work on firms / Average # people per firm.
  • To estimate the number of people of working age in China I would start by Chinese population x % in working age that work in firms.
  • For that I would start segmenting 1b population into population on working age 52.5% (Population between 18-60 years) = 525 m. Then I would segment this by % Employed ( 90%) and % Unemployed (10%), then I would segment the %Employed into % Working by firms (80%) and % Self employed (10%), this would give me a 380m.
  • To estimate the Average # people per business I would do the following segmentation: - 20 employes for 90% of firms - 50 employes for 9% of firms - 200 employes for 1% of firms This gives me 18. So I get 21.1 m

Thank you everyone.

Hello everyone!

What do you think of this approach?

  • To estimate the # of business that buy firewors I would find # people of working age on China that work on firms / Average # people per firm.
  • To estimate the number of people of working age in China I would start by Chinese population x % in working age that work in firms.
  • For that I would start segmenting 1b population into population on working age 52.5% (Population between 18-60 years) = 525 m. Then I would segment this by % Employed ( 90%) and % Unemployed (10%), then I would segment the %Employed into % Working by firms (80%) and % Self employed (10%), this would give me a 380m.
  • To estimate the Average # people per business I would do the following segmentation: - 20 employes for 90% of firms - 50 employes for 9% of firms - 200 employes for 1% of firms This gives me 18. So I get 21.1 m

Thank you everyone.

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Hey Floyd!

First, thanks for being so active on the Q&A!

Now, I can't help but note that this is like your 10th Market Sizing post.

Furthermore, your approach is always not quite right. You do all kinds of assumptions/step that really just beat around the bush, then you jump to a random estimation. For example, points 1-3 above do nothing for you! Point 4 is the entire point of the case...and you just put a finger in the air and guess. THIS is where you have to start the market sizing (i.e. break things down to figure out what this number could be).

You're really missing the point of market sizing...I highly high advise a coaching session to run home how you need to think about/approach market sizing.

Hey Floyd!

First, thanks for being so active on the Q&A!

Now, I can't help but note that this is like your 10th Market Sizing post.

Furthermore, your approach is always not quite right. You do all kinds of assumptions/step that really just beat around the bush, then you jump to a random estimation. For example, points 1-3 above do nothing for you! Point 4 is the entire point of the case...and you just put a finger in the air and guess. THIS is where you have to start the market sizing (i.e. break things down to figure out what this number could be).

You're really missing the point of market sizing...I highly high advise a coaching session to run home how you need to think about/approach market sizing.

Hello Ian, Thank you for your answer. I'm wondering, should I segment even more to get the # of business that sells fireworks? — Floyd on Mar 06, 2021

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Hello Floyd!

Love that you are so active here with your market estimations :)

For this particular example: I would actually advise the more "conventional" ones. This, without further gudance, is more complicated than what you would usually find in an MBB interview.

Hope it helps!

Cheers,

Clara

Hello Floyd!

Love that you are so active here with your market estimations :)

For this particular example: I would actually advise the more "conventional" ones. This, without further gudance, is more complicated than what you would usually find in an MBB interview.

Hope it helps!

Cheers,

Clara

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