Is this a MECE approach?

Question

Hi everyone,

I just came across the following text (see below) from an e-book of Quartz strategy consultants. And I'm wondering if you can share your thoughts regarding the approach of market size.

1) Is it really a MECE approach? (Points 1 and 2 easily overlaps point 3, don't you think so?)

2) How would you do it?

The text is an extract of a real-case interview section of the ebook.

"Quartz: You mentioned that the market potential is important. What is your best estimate of the Danish market for paper-based calendars?

Candidate: In order to determine the market size I would split the market into three groups:

1. Student calendars 2. Calendars for business people 3. Calendars for households/private use

I would define the student group as people from 10 to 25-26 years of age. Hence, the group is approximately 20% of the population, assuming a fairly equal distribution of the population in different age groups from 0-80 years. That group amounts to about 1 million people. I'm disregarding that some students do not study past secondary school, but I will include this in the demand per person in this segment. Almost all students have at least one calendar, and many have two due to the free calendars or half-year calendars. So I would assume an annual demand of 1.2 calendars per person in this group. That's 1.2 million calendars for the student group.

The business group includes people in the work force. If we assume these are people between from 25 to 65 years of age that would be 50% of the population – 2.5 million people. Of this group, fewer people have work-related calendars, I believe. 20% coverage would give a demand of 0.5 million calendars per year in this segment. I don't think it is higher than this given the increased use of electronic calendars.

Finally, there are calendars for private use. As far as I remember, there are something like 2.3 million households in Denmark, and I would imagine that at least one person in every second household has a calendar for private use. This gives a demand of about 1.15 million calendars for private use.

This gives us 1.2 million calendars in the student segment, half a million in the business segment and 1.15 million in the household/private use segment. In total, it's a market of approximately 2.9 million calendars in Denmark.

Quartz: Thank you. I think we will stop the case here. "

Thanks in advance,
Best

Answer 1

Hello Gerard,

1. For me the answer is MECE. Students and business people calendars are totally different types and purposes than the one you'd fine in the middle of a kitchen.

2. I would have splitted the market into private and business.
Private : 1 every two households
Business : 1 for each household
Personnally, I don't like the age distribution approach as it implies too heavy assumptions.

Best regards,

Answer 2

Dear A,

in general a good structure can be evaluated by a certain depth and breadth. The “depth” should be at least 3-4 levels while the “breadth” should cover the entire solution space. You can cross-check this with the MECE principles (For details see respective article on Preplounge), but the CE (collectively exhaustive) part is basically defining your breadth.

Finally, make sure to check for inter-linkages in your structure and point them out.

Simon

Answer 3

Hi, here some tips and tricks as well as explanations of what the interviewer expects: 1. General Approach to Struc... (read entire answer)

Hi, here some tips and tricks as well as explanations of what the interviewer expects: 1. General Approach to Structuring a Problem Instead of relying on rigid structures, I e... (read entire answer)