expert
Expert with best answer

Ibrahim

100% Recommendation Rate

20 Meetings

8 Q&A Upvotes

USD 109 / Coaching

Market Sizing Help

Anonymous A asked on Oct 27, 2018

At the end of market sizing when you give the interviewer you estimate of (say) the UK buscuit market (for argument's sake let's say you said £6bn), and he/she says do you think that is high/low etc. What are the best ways to sense check your final answer?

I was thinking about comparing the number to the UK population - it doesn't seem unreasonable that 60 million people could spend £100 on biscuits in a year.

Thanks!

2 answers

  • Upvotes
  • Date ascending
  • Date descending
Best Answer
Ibrahim
Expert
replied on Oct 27, 2018
2+ years of consulting in Dubai - Harvard grad - here to help you achieve your goals
Book a coaching with Ibrahim

100% Recommendation Rate

20 Meetings

8 Q&A Upvotes

USD 109 / Coaching

Hello,

Great question. So, I think it's important to mention that you should make it a habit to sense-check your numbers as you solve the case. This not only helps you make sense of what you're doing and ideally helps you drive towards the correct answer, but it also shows the interviewer that you're on top of your work/estimates. So whenever you estimate a number, ask yourself if it makes sense by putting it in context. and test the interviewer's reaction for whether it makes sense.

Now in terms of the final answer, here's what I would recommend sense-checking:

  1. Your assumptions: this is the most basic and expected kind of sense-checking to do. If you change this assumption slightly, how will your final answer change? If you add a 0 to one of your assumptions. does it drastically change the final answer and no longer make sense? This is what the interviewer is ultimately looking for, especially if he asks whether it's too high or too low
  2. Against the population/number of households: this is what you mentioned and is a great step. But you still have to ask yourself, does 100GBP sound too high/low? Well that's slightly above 8GBP/month, which still seems reasonable. However, if your estimate is not necessarily household/population driven (which is kind of rare), this may not work best
  3. Against a company that operates in the industry: you might not have that information, but simply asking is a good indicator. If you realize that the largest player makes ~10B GBP/year from biscuit sales alone, you're way off, but if the largest player makes ~2.5B GBP and they should be, say 50% of the market, then at least you know your estimate is quite close
  4. Against an industry of similar characteristics: again, you might not have that information, but comparing it to the chocolate industry, or say potato chips or even sugar candy, might be insightful
  5. Against your knowledge: this is the least recommended for obvious reasons, given how some of the market sizing will be of random things you've probably rarely encountered or thought about, but you may have read something that could be relevant to the question (NOTE: it is extremely important to not let this knowledge impact the way you get to your final answer, unless the interviewer asks for it or pushes you in that direction, but in sense-checking, it should be fine so long as you make it clear)

There might be other ways to sense-check depending on context, but I would say the above are safe approaches.

Hope this helps and best of luck with your prep.

Best,

Ibrahim

Benjamin replied on Oct 29, 2018
ex-Manager - Natural and challenging teacher - Taylor case solving, no framework
Book a coaching with Benjamin

100% Recommendation Rate

50 Meetings

466 Q&A Upvotes

USD 319 / Coaching

Hi,

This type of comment is exaclty what we are looking for during case interview. It's good to have the calculation right, but what matters in the end is how you interpretate your results.

Regarding the question asked two dimensions should be discussed :

- How accurate is likely to be the number you provided ? Basically you should point what are the weak / strong hypothesis you took givent the info available you had that could impact the calculation.

- How do you qualify the current number you have in terms of market attractivness ? You need to trust your gut feeling here and consider the context. But to be concrete let's take two example. 1. If you're looking for a mass market with most likely intensen competition and low margins anything below 500 M€ could be considered as unsifficient. 2. If you're looking at a niche market with limited competition and most likely high margin, the same 500 M€ number could be consider as attractive. In the end we need to consider the market size in regard of the opportunity to capture revenue it creates.

Best
Benjamin

Related BootCamp article(s)

Case Studies

The case study is the most important element of the case interview, which you'll have to nail in order to get into strategic consulting. Here you can learn the specific skills and concepts necessary to solve them.

Interviewer-Led vs Candidate-Led cases

Case Interviews can be led by the candidate or by the interviewer: In Candidate-led cases the main challenge is the structure. In Interviewer-led cases the main challenge is to adapt quickly

Related case(s)

Bain case: Asian lubricants producer

Solved 91.7k times
4.7 5 27031
| Rating: (4.7 / 5.0)

LubricantsCo, a very successful Asian premium producer of lubricants in their native region, would like to further increase their revenue and profit. The product range ranges from lubricants in the automotive sector (e.g. motor and gear oil) to industrial applications (e.g. fats, heavy-duty oils). ... Open whole case

Bain Case: Old Winery

Solved 30.8k times
4.4 5 842
| Rating: (4.4 / 5.0)

You have inherited the “Old Winery” from your grandfather, a winery which has been family owned for five generations and can be dated back to the 16th century. Half of the eleven hectares are used to grow white grapes, the other half to grow red grapes. They are grown in the conventional way, i.e. ... Open whole case

McKinsey Questions

Solved 31.1k times
4.5 5 829
| Rating: (4.5 / 5.0) |
Difficulty: Intermediate | Style: Fit interview | Topics: Personal fit

Tell me of a situation where you had an opinion and no one seemed to agree with you. What was your goal when you decided to join university / work / clubs / a sports team? Did you have a goal that you were not able to reach? What did you do? What do you want to be remembered for and how are you a ... Open whole case

BCG Questions

Solved 20.8k times
4.5 5 177
| Rating: (4.5 / 5.0) |
Difficulty: Intermediate | Style: Fit interview | Topics: Personal fit

What arouses your interest when you are working / studying / doing another activity (from the CV)? Tell me of a time where you had no idea what you were doing. When did you use an uncommon approach to do something? Have you ever had responsibility for other people? Tell me of a situation where y ... Open whole case

Bain Questions

Solved 20.4k times
4.6 5 248
| Rating: (4.6 / 5.0) |
Difficulty: Intermediate | Style: Fit interview | Topics: Personal fit

Tell me about a difficult situation you had to cope with. Tell me of a task which you didn’t like doing and explain why you performed it nevertheless. Why do you do things? What do you like doing most / What is your favorite hobby? Walk me through a situation where you showed leadership skills. Open whole case