Market sizing - is it ok to ask Revenues or Volume?

Market sizing
Recent activity on Feb 23, 2018
4 Answers
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Edoardo asked on Feb 23, 2018
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Hi,

During a case, when we do a market sizing:

On one hand I think we should ask the interviewer before, if they want a figure in Revenues, Volume, what unit and what time period. On the other hand the interviewer could challenge you, since if it's something new the client often doesn't know the price and in many cases you have to propose a pricing.

What is the best approach?

Thank you,

Edoardo

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Andrea
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replied on Feb 23, 2018
Former BCG Principal and decision round interviewer

Yes, no downside in asking. You might want to say "While I know that companies think in dollars, wanted to make sure that here we can do the exercise in units as an inital estimate"

Andrea

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Juan Pablo replied on Feb 23, 2018
I did my internship in consulting and now I am preparing actively for interviews

Hi Edoardo,

It is ok to ask information and it is ok to check if you assumptions sounds good for the interviewer. What they want to know is how you structure the process and what approaches do you use. Remember than most important than the final answer is to check if you have business sense and if your assumptions are not crazy.

In those terms, i would recommend you asking the clarifying questions that you need and even if you are talking about China, you could ask what is the total population or if its ok to take 1.3BN.

Best

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B
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updated an answer on Feb 23, 2018
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Hey Edoardo,

Market size can always be expressed in volume or value (total revenue), so there will be virtually no way for you to know without clarifying it - if not clearly defined by the interviewer, just ask (no issues with asking it)!

Hope this clarification helps

Best

Bruno

(edited)

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Vlad
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replied on Feb 23, 2018
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi,

  1. Units or $ - you should ask in the beginning of the case or before making a market-sizing structure. Usually to calculate the market in $ you don't use the price of the client but rather weighted average price or the price per particular tier. In the market-sizing case, either the interviewer will give you the average price or you'll have to come up with some assumptions
  2. Time frame - you can assume by default that it's a year unless the interviewer specifically tells you that it's per day or smth.

Best

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Andrea gave the best answer

Andrea

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Former BCG Principal and decision round interviewer
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