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Market sizing question - sheep

Market sizing
New answer on Feb 14, 2023
5 Answers
493 Views
Alnur asked on Feb 14, 2023

Could you please help solving this case? What kind of structure to use?

Case: What is the quantity of sheeps in the US? (units)

 

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Ian
Expert
Content Creator
replied on Feb 14, 2023
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate

Hi Alnur,

You'll learn a lot more from this by trying it out yourself first! Why don't you post your approach here and we can provide commentary?

How to approach market sizing

It's very simple: Do the approach the is the easiest for you given the question.

Are they asking you to estimate something where you don't even know where to begin from the top (maybe you have 0 clue as to the market size of the industry, the GDP of that country, etc. etc.)? Then do bottom-up!

Alternatively, does it seem impossible to do a realistic from-the-ground-up estimation of something (perhaps it requires just far too many steps and assumptions)? Then do top-down!

Fundamentally, you need to take the approach that just makes the most sense in that circumstance. Quickly think about the key assumptions / numbers required and whether you 1) Know them or 2) Can reasonably estimate them. If you can, go ahead!

An Example

He's a Q&A for a great market sizing question here asking to estimate # of electric charging stations in a city in 10 years:

https://www.preplounge.com/en/consulting-forum/how-would-you-solve-this-market-sizing-question-from-roland-berger-7631

This one could be answered top-down (as I did) by estimating population of the city, # of drivers/ cars, etc. etc.

OR, it could be answered bottom-up by estimating # of stations you see per block (or # of gas/petrol tanks), % increase this might be over time (or # of EV stations that would be needed per gas tank given EV stations take 10 times as long), and # of blocks you'd estimate the city to have.

Take a look here for additional practice! https://www.preplounge.com/en/management-consulting-cases/brain-teaser/intermediate/taxis-in-manhattan-market-sizing-229

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Hagen
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replied on Feb 14, 2023
#1 Bain coach | >95% success rate | interviewer for 8+ years | mentor and coach for 7+ years

Hi Alnur,

I would be happy to share my thoughts on it:

  • First of all, I would not say this is a case study but rather a brain teaser/market size estimation. Proper case studies are fictional business situations with more complexity. As such, I would also advise you to focus on solving these instead of brain teasers/market size estimations, given they are seldom used.
  • Generally speaking, with brain teasers/market size estimations, I would advise you to first understand whether you want to approach the question top-down or bottom-up. Then, you should think of a meaningful granularity of your structure. And then, you should start laying out the structure in the form of a tree. The actual calculation will be done later, together with the interviewer who will verify the assumptions you make.

If you would like a more detailed discussion on how to address your specific situation, please don't hesitate to contact me directly.

Best,

Hagen

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Benjamin
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replied on Feb 14, 2023
Ex-BCG Principal | 8+ years consulting experience in SEA | BCG top interviewer & top performer

Hi Alnur,

I'd probably start with a top-down approach on this question starting with total land area and breaking that down further. But as Cristian suggested, it would be more useful for you to write down your answer and get feedback. 

This helps you to practice, and try and might help you to reflect on where you went right/wrong/different based on the feedback we coaches can give you.

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Anonymous replied on Feb 14, 2023

In such questions you can use either top down or bottom up approach. Generally speaking, a good method is to brainstorm on all the factors. For example in this case - Number of farms in the US, % of animal split in farms, sheeps in a herd etc.

You may need to factor alternate scenario. For example - Sheeps not on farms, domesticated animals, sheeps on zoo etc.

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Cristian
Expert
Content Creator
replied on Feb 14, 2023
#1 rated MBB & McKinsey Coach

Hi Alnur, 

That's a rather funny market sizing question. 

You'll get more out of this exercise if you provide your suggested answer for us to provide feedback on, rather than asking directly for the approach others have. 

Best,
Cristian

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