Market sizing question: Tennis ball market size in US (M$)

Market sizing
New answer on Dec 31, 2021
5 Answers
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Anonymous A asked on Jan 11, 2020

Any expert suggestions on how to tackle this kind of question?

Thanks,

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Clara
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replied on Jan 13, 2020
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

I would calculate how many balls are purchased per year by two segments: (1) individual players and (2) academies/centers.

  1. Calculate # of players and # of academies (estimation: X% of the people play tennis, there is X academies every Y people)
  2. Calculate, on average, how many matches they play monthly/yearly (estimation)
  3. Calculate how much a ball lasts (estimation)

Cheers,

Clara

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Antonello
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replied on Jan 11, 2020
McKinsey | MBA professor for consulting interviews

Hi,
I consider great the approach of the other candidate below. To facilitate the calculation I would find the hours played in total (starting from the people and the frequency) and then estimate the balls needed every year.
To add the aspects related to tennis academies and professionals I would simply add a percentage at the end.

Best,
Antonello

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Anonymous B updated the answer on Jan 11, 2020

US Population --> number of potential tennis players (e.g. age 10-70) --> rate of people that actually play tennis --> divide those people into categories (rarely play, occasionally play, frequent players) --> assume how many balls they need per month/per year --> multiply this number by price per ball

That's the easy way. If you want to complicate things you could add tennis academies, schools and professionals as well.

(edited)

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Ian
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replied on Dec 31, 2021
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Hi there,

Providing some market sizing thinking for anyone revisiting this Q&A:

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.

Some tips:

  1. Just like in a case, make sure you understand the question - what are you really being asked to calculate
  2. Decide whether a top-down or bottom-up approach is best
  3. Figure out what you know you know, and what you know you don't know, but could estimate
    1. This helps you determine how to split out buckets
  4. Stay flexible - you can start with a "high-level" market sizing, but gauge your interviewers reaction....if it looks like they want you to do more...then go along level deeper in terms of your splits
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Luca
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replied on Jan 13, 2020
BCG |NASA | SDA Bocconi & Cattolica partner | GMAT expert 780/800 score | 200+ students coached

Hello,

I would suggest the same approach to calculate the number of hours played. Then you have to calculate the number of games playes:

  • Estimate the duration of a game
  • Calulate the average of players per game (between 2 and 4)
  • Games played = Total hours played / (# players per game * Hours per game)

After this you have just to estimate the number of balls per game and how many game you can play with the same ball.

Tennis balls needed = Games played * # balls per game / # games per ball

Hope it helps,
Luca

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Clara gave the best answer

Clara

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McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut
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