Good evening everybody,
Happy New Year,
I encountred a case study, where the interviewee needed to estimate the number of planes (globally). The correction is not very detailed, I just know that the interviewee had to size the number of planes... I cannot figure out a relevant methodology to estimate that number: should I start by the number of airports ? Or passengers? etc.
Many thanks for your help,
Have a lovely evening
Hi there and happy new year!
Remember that there's rarely a "best" answer with market sizing. What's important is that you break down the problem the way it makes sense to you. Importantly, break it down so that the assumptions you make are the ones you're most comfortable in.
For example, do you know all the major brands? Great go with that. Do you understand all the segments of that country's population (either age or wealth or job breakdown)? Go with that. Do you know the total market size of the tourism (or hotel) industry? Then break it down that way.
In terms of this case specifically:
You need to start with that which you can reasonably estimate. You need to break this problem down into components that you're comfortable with. This could look like any of the following:
Hello,
Happy new year to you too!
As the other coaches mentioned, there are multiple ways to tackle this market sizing exercise.
Something to clarify before starting to think how to approach this, would be to clarify whether the number of planes that are currently operational should take into account commercial planes AND cargo planes.
Assuming that it does not and it focuses only on commercial planes:
One quick way to approach this exercise is by starting with the number of airlines globally. The first step here would be to assume an average number of airlines per country. Then, the second assumption would be around the average number of aircrafts that each airline operates. Multiplying these two assumptions would give you the total number of planes globally.
Another way to approach it would be by starting with the number of passengers. First, you would have to assume active passengers around the world. Then, you would have to assume the average number of passengers that a plane can transport per flight which will give you the number of planes you need to accomodate the active passengers, assuming they only travel once.
Hope the above is helpful!
Thank you in advance!
Nikos
Hello!
Happy new year to you too :)
There are always plenty of ways to solve market sizing questions.
In this case, that is btw a quite complex one, I would try to do an 80-20 with airports.
Hence, I would calculate total capacity of the main airports (e.g., Atlanta, Heathrow, etc.) and from then extrapolate.
Hope it helps!
Cheers,
Clara
Hi there!
Happy New Year to you, too!
I agree with the experts that there are different ways to approach it.
In addition to what's been said, here is a great article about market sizing questions
https://www.preplounge.com/en/bootcamp.php/case-cracking-toolbox/identify-your-case-type/market-sizing
Hope it helps you, too.
GB
Hi,
There is no wrong or right answer in a question like this. Your logic structure is the thing that is being evaluated.
One approach is to think of it as a set of drivers that will determine the number of plane in the world. E.g. Number of plane is driven by # of passenger, # of passenger is driven by how many people in the world travel overseas and so on.
Remember to always communicated your approach and assumption so it is easy to understand by the interviewer.
Best,
Iman
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