Hi coaches and fellow aspiring consultants, how would you go about approaching this market sizing question which I got in my first round case?
How much would you pay for a license (one time - assume valid for perpetuity) to sell rayban sunglasses in Saudi Arabia? No other information provided, make your own assumptions.
Hi there,
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?
Hint: This is a bottom-up market sizing (think about how much you could make in a year, then do an NPV)
Market Sizing WITH SOLUTION - Coffee Shop Revenue | PrepLounge.com
Market Sizing WITH SOLUTION - Number of Internet Users | PrepLounge.com
Market Sizing WITH SOLUTION - Number of Taxis | PrepLounge.com
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:
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
The other way to think of this question is - what is the expected P&L of a Ray Ban franchise in Saudi Arabia. In terms of steps
Feel free to provide a suggested answer and I'm happy to give feedback on it.
Otherwise, you're likely to get as much value from this Q&A as you would by reading the answer to this market sizing question from a case book.
Best,
Cristian
Please provide your approach - coaches are unlikely to provide full answers on Q&A (it's a ton of work to write the whole thing).
Hi! Can you tell your approach and which office is this? Dubai or Riyadh?
(edited)
Sure, book a session :)
Hi there,
Please provide your approach so we can comment on it and give you the best possible feedback.
Best,
Alberto
Hi,
sounds like you already tried this case in your interview. So this is water under the bridge for you personally really. But if you want feedback aside from what the interviewer has given you, why don't you share the approach you took?
Best
