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Vlad

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5

Market Sizing: Strollers

During an interview, I received the questions to estimate the market of strollers in the US.

I structured as follows:

1. Number of babies born every year as 300M inhabitants / 80 years lifespan x 1% growth = 3,8M

2. On average 2 children so 50% are first child and 50% are second, third... child

3. I assumed that 80% of first children receive a new stroller while only 10% of second, third children receive a new stroller (90% inherit the stroller from the previous child) resulting in 1,7M strollers a year

4. Average price of 200$ so total market of 340M$

Does this sound like a good approach to you as unfortunately I didn't receive an offer to come back and I wanted to know if it might have had to do with my solution to the case.

Thomas

During an interview, I received the questions to estimate the market of strollers in the US.

I structured as follows:

1. Number of babies born every year as 300M inhabitants / 80 years lifespan x 1% growth = 3,8M

2. On average 2 children so 50% are first child and 50% are second, third... child

3. I assumed that 80% of first children receive a new stroller while only 10% of second, third children receive a new stroller (90% inherit the stroller from the previous child) resulting in 1,7M strollers a year

4. Average price of 200$ so total market of 340M$

Does this sound like a good approach to you as unfortunately I didn't receive an offer to come back and I wanted to know if it might have had to do with my solution to the case.

Thomas

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Hi,

I agree with your initial approach and don't agree with Luca. Basically, you are making a reasonable assumption about the Birth Rate. If you apply growth - just make sure that the population is growing (although the number is small anyway)

Best

Hi,

I agree with your initial approach and don't agree with Luca. Basically, you are making a reasonable assumption about the Birth Rate. If you apply growth - just make sure that the population is growing (although the number is small anyway)

Best

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Hi Thomas,

the most important thing to do during a market sizing is to make reasonable hypotesis, easy steps and detail the steps as much as you can (make them deep) while maintaining an overall execution time within 10/20 mins max.

Said this, looking at your approach I find that your first assumption may be a bit hursh... you are basically saying that all the population in 1 yr bucket will have a child every year... so like saying people within 34 and 35 will have a child... All of them will have a child and nobody else will have. Unless I misunderstood your calculation

Maybe the number is also correct (idk), but for sure the hypotesis is not clear to me... I would have procced dividing the population into buckets (10 years span per bucket) and then defining some drivers as: Children yes/no (for example below 15 and over 70 I sould say no), then Likelyhood ( from 20 to 30 maybe 20%, from 30 to 40 maybe 30%, from 40 to 50 maybe 20% ...) thenyou can add your filter (1st/ 2nd child)... and so on

But I would have been much more granular while making the hypotesis and explaining them to the interviewer. Remember the number is important, but is nothing without a clear, reasonbable and understandable explanation

Hope this can help

Hi Thomas,

the most important thing to do during a market sizing is to make reasonable hypotesis, easy steps and detail the steps as much as you can (make them deep) while maintaining an overall execution time within 10/20 mins max.

Said this, looking at your approach I find that your first assumption may be a bit hursh... you are basically saying that all the population in 1 yr bucket will have a child every year... so like saying people within 34 and 35 will have a child... All of them will have a child and nobody else will have. Unless I misunderstood your calculation

Maybe the number is also correct (idk), but for sure the hypotesis is not clear to me... I would have procced dividing the population into buckets (10 years span per bucket) and then defining some drivers as: Children yes/no (for example below 15 and over 70 I sould say no), then Likelyhood ( from 20 to 30 maybe 20%, from 30 to 40 maybe 30%, from 40 to 50 maybe 20% ...) thenyou can add your filter (1st/ 2nd child)... and so on

But I would have been much more granular while making the hypotesis and explaining them to the interviewer. Remember the number is important, but is nothing without a clear, reasonbable and understandable explanation

Hope this can help

I don't think that you interpret this calculation correctly. I guess with population/ avg lifespan you calculate how many people are in a "1 year lifespan bucket" assuming a unform distrubution. Thus it is okay in my opinion to say that there is one new "1 year bucket" every year which - in other words - must be the number of new babies born. — Klaus on Jan 29, 2019

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I like your approach! It is pragmatic, easy to follow, and allows for a clear discussion of the different underlying drivers.

Cheers, Sidi

I like your approach! It is pragmatic, easy to follow, and allows for a clear discussion of the different underlying drivers.

Cheers, Sidi

(edited)

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Clara

Clara

(edited)

Somethings to be considered, just sharing, thanks:

1. should be strollers for new babies, and for existing babies' replacement (can add this at the end with a %)

2. % use strollers, % not use

3. 1st baby can buy new & second hand, 2nd baby can also buy new & second hand

4. the babies are from low income, middle income and rich families, so the average price can be segmented further

Somethings to be considered, just sharing, thanks:

1. should be strollers for new babies, and for existing babies' replacement (can add this at the end with a %)

2. % use strollers, % not use

3. 1st baby can buy new & second hand, 2nd baby can also buy new & second hand

4. the babies are from low income, middle income and rich families, so the average price can be segmented further

. — Eva on Feb 05, 2019 (edited)

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MeGrain is a co-operative of 5000 farmers in the central part of India. As a co-operative, the farmers came together to sell the grains to retailers and wholesalers. They are the 3rd largest grain sellers in India and sell 10million quintals of grains annually. They have operations in 4 regions in ... Open whole case