Hello! I am regularly struggling to determine whether a market is attractive enough or not (say for example, for a market entry case). I don't have problems fetting the information on market size and growth rate, competition etc. But how do I determine whether the market is actually large enough or whether the growth is fast enough? Is this the kind of business judgement I need to get from reading articles etc.? Or are there general rules?
Get Active in Our Amazing Community of Over 446,000 Peers!
Judging market attractivity
Overview of answers
-
Upvotes
-
Date ascending
-
Date descending
Hi Anonymous,
there are no fixed rules regarding which size or growth rate makes a market "attractive". However, there are rigorous criteria that need to be met. This is what I call "thinking from first principles"!
Here is what I mean: "large enough" or "fast enough" are attributes that can only be defined against the prevalent objective. The actual question is:
- "Is the market size or growth rate sufficient to reach the objective?"
This objective can either be defined as a clear target value (e.g., "break even within 3 years", or "reach EUR 100 millions in sales by 2022"), or in terms of exceeding opportunity costs (e.g., "we have expanded our production capacity and will expand to a new market if the expected additional profits there exceed the additional profits we would expect if we just pump additional volumes into our existing market").
So in summary, you always need to start your thinking from the objective, and then assess whether the market preferences will allow you to meet this objective in a better way than any other available strategic alternative.
Cheers, Sidi
Related Products
Premium Membership (1 week)
- ALL the resources you need for your case interview preparation
- Unlimited meetings with peers
- Access to #number-of-cases# cases, video tutorials, and 220+ case interview exercises
Break Into Consulting - Strategy Consulting Firm's All-In-One by Alexandre
- Created by 2 BCG consultants
- Covers most strategy consulting firms
- Get you to the backstage of the strategy world
Break Into Consulting - Industry Overviews by Alexandre
- Created by 2 BCG consultants
- 15+ industries covered
- Practical tips to master any industry
Break Into Consulting - Frameworks I wish I knew by Alexandre
- Created by 2 BCG consultants
- Covers most interview cases
- Practical tips to crack the case
Integrated FIT Guide for MBB by Clara
- Combines key concepts review and a hands-on methodology
- Contains printable worksheets to prepare your stories
- Includes 20+ real examples and 50+ practice questions
Premium Membership (6 weeks )
- ALL the resources you need for your case interview preparation
- Unlimited meetings with peers
- Access to #number-of-cases# cases, video tutorials, and 220+ case interview exercises
Related Articles
Case Interview 2024
EY-Parthenon Case Guide
Bain Case Interview
Strategy& Case Interview Guide
PowerPoint for Consultants
Free Guide to LEK Consulting Case Interviews
Charts and Data in Consulting Case Interviews
Interviewing in the Middle East
Oliver Wyman Consulting Case Interview Guide
How to Stay Confident in Case Interviews
Dos and Don'ts in a Case Interview
Why Consulting?
Unstructured Case Interviews
Candidate-Led Cases: What to Expect With Example Cases
The Typical Terms in Case Study Interviews for Consulting Firms
Related Cases
Related Case Interview Basics article(s)
Market Entry
Market Entry may be a great solution to apply in your Case Interview if your client is searching for growth alternatives. Learn how to work a Market Entry Case
GROW Model
Discover the secrets to Goal setting, Reality checking, Options exploring, and Way forward planning that will redefine your path to success.
How to Start The Case Interview Preparation
Learn the basics of a real consulting case interview and repeatedly train the skills you need to ace your real case interview at MBB or the Big Four.