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Market Sizing

Market sizing
New answer on Aug 31, 2020
5 Answers
1.4 k Views
Anonymous A asked on Aug 27, 2020

Hi all,

I've been practicing some MS questions, and came across the following one: estimate the revenue of a Starbucks store.

Most answers on PrepLounge regarding this qn and other consulting websites focuses on the bottleneck which is considered to be the number of cashiers (usually 2 cashiers) or in some cases the number of seats. My idea is focusing on the person who crafts the customer drink (barista and usually there is 1 barista per store) as the bottleneck. Would this approach be valid ?

thanks

(edited)

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Axel
Expert
Content Creator
replied on Aug 28, 2020
Bain Consultant | Interviewer for 3 years at Bain |Passionate about coaching |I will make you a case interview Rockstar

Hi Anonymous,

Yes, I think this sounds like a pretty good approach and is well-tailored to the specifics of a Starbucks operation. Just remember to adjust somehow for the fact that the Barista would not be at 100% capacity during all of the opening hours.

-A

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Udayan
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updated an answer on Aug 28, 2020
Top rated Case & PEI coach/Multiple real offers/McKinsey EM in New York /12 years recruiting experience

Yes absolutely. As long as you have a reasonable explanation for why this is the bottleneck (which it is) and how (e.g., 1 barista can make 1 order every x mins) then you will be fine.

(edited)

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Antonello
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replied on Aug 31, 2020
McKinsey | NASA | top 10 FT MBA professor for consulting interviews | 6+ years of coaching

Hi, in addition to the solutions proposed by the other coaches in the discussion, I would like to suggest similar cases in the platform to practice with:

  • https://www.preplounge.com/en/consulting-forum/how-much-would-you-charge-to-clean-all-the-windows-in-seattle-4965
  • https://www.preplounge.com/en/consulting-forum/market-sizing-milk-consumption-5087
  • https://www.preplounge.com/en/consulting-forum/how-would-you-calculate-the-value-of-a-cow-4982
  • https://www.preplounge.com/en/consulting-forum/estimate-number-of-traffic-lights-in-a-london-5692

Hope it helps,
Antonello

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Clara
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replied on Aug 29, 2020
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

Both indeed are very similar approaches -from the logic that you follow point of view-, since they are focusing on a bottleneck.

Both indeed are totally correct, and which one is the right one for a specific store would depend on how many staff they have alocated to each position (cashier vs. barista).

Hope it helps!

Cheers,

Clara

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Deniz
Expert
Content Creator
replied on Aug 28, 2020
5+ Years at BCG & Kearney Dubai & Istanbul | 400+ Trainees | Free 15-min Consultation Call

Hello,

This approach is also valid. As you mentioned, you need to define what the bottleneck is, i.e., in which point of the sales process the customers are queuing up. In this case, barista could be a better indicator than cashiers.

Best,

Deniz

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