Data processing in the USA: By clicking on "I accept", you also consent, in accordance with article 49 paragraph 1 sentence 1 lit. GDPR, to your data being processed in the USA (by Google LLC, Facebook Inc., LinkedIn Inc., Stripe, Paypal).

expert

Emily

100% Recommendation Rate

69 Meetings

USD 189 / Coaching

3

# market sizing; # of members in a gym-chain and annual revenues for the chain

During my MBA program I remember we got this market sizing:

How many members are there in a certain gym during a day? And the followup question was; how much revenues does this chain of 50 gyms make annually?

I guess nr 2 will be ok if I could figure out how to solve nr 1, but I have no clue. My only solution is:

- x % of the population in the area goes to the gym

- They go on average 2 days a week

- Divide by 7 (days a week), and multiply by 2 in order to get how many that works out each day (alternatively divide by 3 for simplicity?)

This sounds way to simple and not precise.

How would you guys do it?

Kristian

During my MBA program I remember we got this market sizing:

How many members are there in a certain gym during a day? And the followup question was; how much revenues does this chain of 50 gyms make annually?

I guess nr 2 will be ok if I could figure out how to solve nr 1, but I have no clue. My only solution is:

- x % of the population in the area goes to the gym

- They go on average 2 days a week

- Divide by 7 (days a week), and multiply by 2 in order to get how many that works out each day (alternatively divide by 3 for simplicity?)

This sounds way to simple and not precise.

How would you guys do it?

Kristian

• Date ascending
• Date descending

Agree with the above answers that demand side approach might not be very suitable here. Remember that there could also be multiple chains out there and as such there needs to be an assumption on market share %.

Using the supply side approach, you could work out the sizing based on the following components, with some assumptions to be made

- Capacity of a gym at a given point of time e.g. X machines with 1 person for each machine at any time

- Avg opening hours of a gym in a day

- Avg spend of time of customer in the gym e.g. 1hr? 30mins?

- Typical occupancy rate of the gym

- Avg frequency of customer visiting the gym e.g. once a day? once every 2 days?

- Assumption on % of people who pay for the gym but don't show up

Hope this helps. :)

Agree with the above answers that demand side approach might not be very suitable here. Remember that there could also be multiple chains out there and as such there needs to be an assumption on market share %.

Using the supply side approach, you could work out the sizing based on the following components, with some assumptions to be made

- Capacity of a gym at a given point of time e.g. X machines with 1 person for each machine at any time

- Avg opening hours of a gym in a day

- Avg spend of time of customer in the gym e.g. 1hr? 30mins?

- Typical occupancy rate of the gym

- Avg frequency of customer visiting the gym e.g. once a day? once every 2 days?

- Assumption on % of people who pay for the gym but don't show up

Hope this helps. :)

Hi there,

Your approach is from the demand side. You can also use the supply side as a constraint and work from there. So how many people can actually be present in a gym, the percentage utilization for the peak and off peak hours, and peak and off peak seasons. You will get an average that you can work with.

As long as you can show the interviewer the logic and they can follow you, that's key.

Does this help?

Best, Aws

Hi there,

Your approach is from the demand side. You can also use the supply side as a constraint and work from there. So how many people can actually be present in a gym, the percentage utilization for the peak and off peak hours, and peak and off peak seasons. You will get an average that you can work with.

As long as you can show the interviewer the logic and they can follow you, that's key.

Does this help?

Best, Aws

Hi,

The population approach is flawed since there are many people coming from other districts who just work in that area

It's better to calculate the average occupancy of the Gym (Number of training machines, occupancy on different days / seasons + pool, etc)

Also, you should take into account that 30-50% people hold the memberships but go just a couple times per month

Best

Hi,

The population approach is flawed since there are many people coming from other districts who just work in that area

It's better to calculate the average occupancy of the Gym (Number of training machines, occupancy on different days / seasons + pool, etc)

Also, you should take into account that 30-50% people hold the memberships but go just a couple times per month

Best

## Related case(s)

### Oliver Wyman case: Full Electrons Ahead

Solved 101.5k times
Oliver Wyman case: Full Electrons Ahead Your client, large automotive OEM WyCar, has developed its first fully electric vehicle (EV) and introduced it as a pilot on the Austrian market last year. However, sales have been far below the expected numbers. The management has engaged you to support them in understanding the reasons and advise them on how to adjust the product offering.
| Rating: (4.6 / 5.0)

Your client, large automotive OEM WyCar, has developed its first fully electric vehicle (EV) and introduced it as a pilot on the Austrian market last year. However, sales have been far below the expected numbers. The management has engaged you to support them in understanding the reasons and advise ... Open whole case

### Bain Case: Old Winery

Solved 70.0k times
Bain Case: Old Winery You have inherited the “Old Winery” from your grandfather, a winery that 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 a conventional way, i.e. they are not organically farmed and certified. The vine stocks are in a good condition regarding age and care. Overall, the only ¼ of the harvest is made into wine by the winery itself; the rest is sold. Your grandfather never wanted to change the image of the winery and left the managerial and administrative task to a young and energetic wine-maker. Due to the not so well-known brand, the demand for the “Old Winery” wine is currently rather low. You do not intent to run the winery operatively, given your limited knowledge of winemaking, but find the idea of owning a winery exciting. Your plan is to give the winery some fresh impetus.
| Rating: (4.4 / 5.0)

You have inherited the “Old Winery” from your grandfather, a winery that 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 a conventional way, i.e. the ... Open whole case

### Roland Berger Case: Onlinestar

Solved 49.7k times
Roland Berger Case: Onlinestar Onlinestar, an online retailer of furniture and garden products (core business), has grown significantly in recent years as a result of an expansion of its product portfolio. The company mainly imports goods from Chinese manufacturers but also operates its own production of cat lavatories (special business) in Eastern Europe. The company sells its goods via Amazon and eBay, and recently via an online shop on its website. Despite this development, the financial ratios have deteriorated in recent years. In particular, the gross profit margin decreased significantly. Combined with a significant increase in shipping costs, this led to a negative result for the first time in the recently ended fiscal year and a resulting strained financial situation. Against the background of expected stagnating sales for the current financial year, short-term action is required. The board of Onlinestar asks you for an analysis of the reasons for the negative result as well as a derived recommendation for action. As a consultant, you should bring in your knowledge in online trading and develop solutions. In addition, the management board would like to receive a sales and gross profit plan from you for the current financial year.
| Rating: (4.3 / 5.0)

Onlinestar, an online retailer of furniture and garden products (core business), has grown significantly in recent years as a result of an expansion of its product portfolio. The company mainly imports goods from Chinese manufacturers but also operates its own production of cat lavatories (special b ... Open whole case

Solved 70.3k times
Nutripremium Nutripremium is a very well-known premium nutrition food company in Europe (€1 billion revenue last year). It is based in Spain and has an excellent market share not only in its home country but also in Portugal, France, Italy and Germany.  Nutripremium has two main lines of products: Vitamin-supplements for pregnant women Concentrated dehydrated aliments and vitamin pills for sick patients (with Diabetes or Cancer). The CEO of Nutripremium thinks that the market in Europe is starting to get saturated and wants you to analyze the Chinese market. What are the key areas you would explore to determine whether this is a good idea?
| Rating: (4.5 / 5.0) |

Nutripremium is a very well-known premium nutrition food company in Europe (€1 billion revenue last year). It is based in Spain and has an excellent market share not only in its home country but also in Portugal, France, Italy and Germany. Nutripremium has two main lines of products: Vitamin-su ... Open whole case

### Children vaccine

Solved 62.5k times
Children vaccine Beyer, one of the biggest pharmaceutical companies in the world, just invented a very reliable vaccine against Chickenpox, a disease that affects children in the age from 2 to 16 years. Beyer came to you wondering what their potential sales in Europe in the first year would be if they launched this product next year. They are only interested in the overall sales revenue as they already know that the vaccine can be sold for a profit. This is more meant to show them how big the volume they have to supply is and what the revenue would be.
| Rating: (4.4 / 5.0) |

Beyer, one of the biggest pharmaceutical companies in the world, just invented a very reliable vaccine against Chickenpox, a disease that affects children in the age from 2 to 16 years. Beyer came to you wondering what their potential sales in Europe in the first year would be if they launched this ... Open whole case