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# Market Sizing Question help (edited)

Case Interview market market size Market sizing
New answer on Jun 12, 2022
1.1 k Views

Hi,

Can someone help me in estimating the annual market size of speed cameras in Sweden?

My approach:

a. Current installed base of cameras / b. Lifetime of camera

a. Installed base of cameras in Sweden= # of cars * Speed cameras per # of cars

b. 10 years (assumed)

Calculation of # of cars= # of HH* # cars per HH

→  # of HH = Population of Sweden / No. of people per HH

=10m/4 people per HH

=2.5m HH

→ 1.5 cars per HH (assumed)

# of cars= 2.5m HH * 1.5 cars/HH = 3.75m cars

→ Speed cameras per # of cars are assumed to be different in urban and rural areas. 70% of cars in urban region with 1 camera per 50 cars and 30% of cars in rural region with 1 camera per 100 cars

→ 3.75m cars*70%*1/50+ 3.75m cars*30%*1/100

=60k cameras

Therefore, no. of speed cameras in SE= 60k cameras/ 10years (lifetime of a camera) = 6k cameras.

However, due to current trends and improving technologies only 1 out of every 2 camera would be replaced and this will lead to a deduction in the installed base over time

= 6k cameras-(0.5*6k)

=3k cameras in total

Could someone please validate the approach now?

(edited)

• Date ascending
• Date descending

Hi there,

A few notes here:

1. You should never be “guessing”. A fair few amount of your numbers feel like pure guessing. You should always be breaking things down in a way that lets you estimate
2. I don't love your approach. Why are we doing cameras per household? Rather, you should approach it from a regulatory/government perspective. Think about the # of roads and cameras installed and then include the # of cops (particularly traffic cops) and how many would be needed for each…the UK (high surveillance state) is going to be different to the Bahamas (low surveillance state)
3. You forgot to include the market size…i.e. multiply by price
4. Any # you have should be backed with reasoning (for example, why 10 years assumed?)

Hi there,

Generally speaking, coaches are here to provide feedback and not solve the problem for you.

That being said, an interesting question. Just make sure you're clear about the actual ask. Is it the annual sale of speed cameras in Sweden? If so, this would require a multi step process, whereby you calculate:

• Base #: Current # of cameras deployed in Sweden
• Target #:
• Fraction of cameras replaced annually to maintain base
• Growth i.e. new cameras deployed in addition to base (note: could also be shrinking by design due to different policies or alternative technologies e.g. radar guns)

Give it a shot so we can comment! Best of luck!

(edited)

First you have to think about what are the drivers of speed camera usage (e.g. number of cars, number of road kms, urban / metropolitan areas).

So you segment the market based on one of the drivers (e.g. urban vs. rural), and apply a ratio based on another one (e.g. on number of cars).

You can also segment based on type of cameras (fixed vs. portable)

Of course this is just one of the multiple possible approaches.

Hello!

I would always recommend you to give it a shot and then post it here, this would help you the most.

Given that market sizing cases were the topic of many questions in this Forum, I developped a market sizing case, that you can find for free in PrepL´s library

https://www.preplounge.com/en/management-consulting-cases/candidate-led-usual-style/intermediate/market-sizing-new-startup-launch-baby-strollers-in-the-us-244

Let me know if you have any doubts with it, it contains a detailed explanation and methodology about how to solve this specific example, but you can extrapolate to many other market sizings!

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