Market size difference by revenue vs by volume

BCG Case Interview BCG McKinsey and Bain Framework Market sizing
New answer on Jul 04, 2021
3 Answers
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Anonymous A asked on Jul 03, 2021

I cant grasp the meaning and the difference between the two when it comes in market sizing questions

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Henning
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replied on Jul 04, 2021
Bain | passed >15 MBB interviews as a candidate
  • Volume is the number of sold unit, for example the number of passenger cars sold in Europe in the year 2020
  • Revenue is the money all participants earned with selling the units, for example the revenue all call manufacturers earned with those cars

The factor that turns volume into revenue is of cource the price, which means you can dissect growth into volume and price growth and deduct interesting strategic questions around them.

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Francesco
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replied on Jul 04, 2021
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Hi there,

Let’s say they ask you to estimate the market size for tennis balls in the US.

  1. Volume: number of tennis balls sold in 1 year
  2. Revenues: $ amount of the tennis balls sold in 1 year

So 2 is simply the number in 1 times the average price of tennis balls.

Best,

Francesco

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Ian
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replied on Jul 04, 2021
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Hi there,

Volume = # of items

Revenue = $

So, volume = # of apples consumed per year and revenue = dollars of all apples sold

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Henning gave the best answer

Henning

Bain | passed >15 MBB interviews as a candidate
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