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Vlad

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6

Is it MECE

MBB

Hello community - If I am building a structure and The problem requires market sizing ... market size could be used as an indicator for multiple things: to find out market share compared to competitors, determine the attractiveness of the market and sometimes is used in a certain financial analysis. This is often seen in growth/market entry cases.

Let's say we are assessing wether the client selling CPG should enter location X and there is a revenue target:

where do you suggest the market sizing portion should fall: under:

1- the revenues lever as Revenues = Volume x Price

OR

2-maybe under consumers because the volume of goods sold depends on demand that in turn is a % share of the market size ?

OR

3- Overall market size under consumer and then under revenues we talk about the company's market share in specific ? (But often whenever the market size calculation is done the market share of the client is often factored in)

actually the same applies for pricing ... benchmark pricing against competitors and using pricing to calculate revenues ... so one would ask where do I mention pricing under competition landscape or under revenues ?

Thanks

Hello community - If I am building a structure and The problem requires market sizing ... market size could be used as an indicator for multiple things: to find out market share compared to competitors, determine the attractiveness of the market and sometimes is used in a certain financial analysis. This is often seen in growth/market entry cases.

Let's say we are assessing wether the client selling CPG should enter location X and there is a revenue target:

where do you suggest the market sizing portion should fall: under:

1- the revenues lever as Revenues = Volume x Price

OR

2-maybe under consumers because the volume of goods sold depends on demand that in turn is a % share of the market size ?

OR

3- Overall market size under consumer and then under revenues we talk about the company's market share in specific ? (But often whenever the market size calculation is done the market share of the client is often factored in)

actually the same applies for pricing ... benchmark pricing against competitors and using pricing to calculate revenues ... so one would ask where do I mention pricing under competition landscape or under revenues ?

Thanks

(edited)

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Book a coaching with Vlad

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Hi,

  1. Not all structures can and should be MECE. In fact, only mathematical structures can be 100% MECE
  2. How do you know that the problem requires market sizing even before you've started solving the case? In many cases, the market is given as a number
  3. What is your overall structure? You've mentioned revenues, consumers, etc, but this does not give us an idea of the whole structure.

In general, when you are analyzing the markets to enter, you'll have a bucket called Market. In this bucket, you'll ask for the size of the market and growth rate. If the size is not given, the interviewer might ask to calculate it in certain cases.

Best

Hi,

  1. Not all structures can and should be MECE. In fact, only mathematical structures can be 100% MECE
  2. How do you know that the problem requires market sizing even before you've started solving the case? In many cases, the market is given as a number
  3. What is your overall structure? You've mentioned revenues, consumers, etc, but this does not give us an idea of the whole structure.

In general, when you are analyzing the markets to enter, you'll have a bucket called Market. In this bucket, you'll ask for the size of the market and growth rate. If the size is not given, the interviewer might ask to calculate it in certain cases.

Best

(edited)

I am talking in general. and I think this is the right answer " In general, when you are analyzing the markets to enter, you'll have a bucket called Market. In this bucket, you'll ask for the size of the market and growth rate. If the size is not given, the interviewer might ask to calculate it in certain cases." — Kass on Feb 09, 2021

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It's hard to comment on whether something is MECE or not without knowing what you are trying to structure. Assuming you are attempting some sort of market entry/M&A question, the financial analysis feels like a random "others" bucket to do a bunch of numerical computations and the market bucket also just has random drivers that may or may not be relevant to the problem. Structuring in a MECE way is about actually breaking down a problem into 3-5 discrete and prioritised drivers as opposed to a laundry list of all the things that could be considered.

It's hard to comment on whether something is MECE or not without knowing what you are trying to structure. Assuming you are attempting some sort of market entry/M&A question, the financial analysis feels like a random "others" bucket to do a bunch of numerical computations and the market bucket also just has random drivers that may or may not be relevant to the problem. Structuring in a MECE way is about actually breaking down a problem into 3-5 discrete and prioritised drivers as opposed to a laundry list of all the things that could be considered.

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Hi, I confirm not to overthink about being MECE. Especially in more qualitative questions you are not supposed to be 100% MECE

Best,
Antonello

Hi, I confirm not to overthink about being MECE. Especially in more qualitative questions you are not supposed to be 100% MECE

Best,
Antonello

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Oh boy. You have a lot going on in your head right now!

All of your thoughts/questions are totally reasonable/normal. MECE is a very tough concept to learn. A few things to help:

  1. Please book 1 session with a coach. This stuff cannot be taught just by typing/reading. If you really want to work this question out, spend 1 hour with a top coach. There's just too much nuance here...
  2. Remember that MECE is a guide not a mandate. Normally, items can be put in a range of buckets/categories. What's more important is how you articulate them within that bucket.

One example I can give you is with prices/margins. If we're deciding whether we should enter a market, prices/margins can go under market AND company AND execution/deal logistics. Think about it:

  1. Is our market attractive? Is it large, growing, and are there generally good MARGINS/high PRICES for the products in it?
  2. If our company enters this market, what PRICE do we think we can achieve? Will we be able to keep healthy MARGINS based on our costs and what we think we can charge?
  3. When analyzing the entry logistics/execution, what will entry COST us? If we want to buy a firm to enter, what PRICE are they looking for?

Oh boy. You have a lot going on in your head right now!

All of your thoughts/questions are totally reasonable/normal. MECE is a very tough concept to learn. A few things to help:

  1. Please book 1 session with a coach. This stuff cannot be taught just by typing/reading. If you really want to work this question out, spend 1 hour with a top coach. There's just too much nuance here...
  2. Remember that MECE is a guide not a mandate. Normally, items can be put in a range of buckets/categories. What's more important is how you articulate them within that bucket.

One example I can give you is with prices/margins. If we're deciding whether we should enter a market, prices/margins can go under market AND company AND execution/deal logistics. Think about it:

  1. Is our market attractive? Is it large, growing, and are there generally good MARGINS/high PRICES for the products in it?
  2. If our company enters this market, what PRICE do we think we can achieve? Will we be able to keep healthy MARGINS based on our costs and what we think we can charge?
  3. When analyzing the entry logistics/execution, what will entry COST us? If we want to buy a firm to enter, what PRICE are they looking for?

(edited)

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Hi there,

please don't overthink it with MECE. There are also other ways to approach structures!

I think you could really use some coaching sessions - somebody who could guide you and give proper feedback.

Feel free to hit me up with any other questions!

GB

Hi there,

please don't overthink it with MECE. There are also other ways to approach structures!

I think you could really use some coaching sessions - somebody who could guide you and give proper feedback.

Feel free to hit me up with any other questions!

GB

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Hello!

I agree with Antonello on this one.

When solving quant problems -for instance, market sizings- don´t obssess over MECE. It won´t help and probably would just get you focus on the wrong thing -like here-.

Cheers,

Clara

Hello!

I agree with Antonello on this one.

When solving quant problems -for instance, market sizings- don´t obssess over MECE. It won´t help and probably would just get you focus on the wrong thing -like here-.

Cheers,

Clara

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