Please kindly help to market sizing the revenue that a cinema earns in a week

Case Interview Market sizing
New answer on Jun 30, 2020
4 Answers
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Steffani asked on Feb 18, 2020

Hello everyone,

Please kindly help me to solve the market sizing case with the following information,

The number of town population is around 9.5 million and there are 108 shopping malls in the town. The tickets price are differs by days and class (such as regular, 3D, or premiere). The highest number of visitors is during weekends.

I am sorry for the lack of information.

Thank you in advance, everyone!

(edited)

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Emily
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Content Creator
replied on Jun 30, 2020
BCG Project Leader | 3+ years interview experience for BCG SEA recruiting | Kellogg MBA, NTU, Peking University

Hi,
This market sizing question is better solved with a supply approach.
So estimate based on the following components
- Share of this cinema chain in all the malls
- On avg how many halls this cinema has in a mall
- Number of movies per day in a hall (may need to differentiate by weekday and weekend)
- Avg capacity of each hall, i.e. seats
- Occupancy rate of each hall (need to make assumption for weekday and weekend separately; also clarify whether you need to adjust for Friday night or not)
- Ticket prices (weekday, weekend)
- Other revenue stream e.g. F&B (can be a simple % of the total ticket sales for simplicity)

Best,

Emily

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Antonello
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replied on Feb 29, 2020
McKinsey | MBA professor for consulting interviews

Estimate the number of rooms, the average occupancy, the average movies per day and the average price. Calculate it both form the weekend (higher prices, higher occupancy, longer shifts) and for weekdays.

Best,
Antonello

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Clara
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replied on Feb 19, 2020
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

Actually, this market sizing promp has more info than what normally you can expect ;)

My approach would be:

1. Estimate number of cinemas > you can calculate the ratio between population and shopping malls, and than extrapolate.

2. Estimate the number of visitors per day on average > leveraging your own knowledge about the topic + the information you got given of high affluence in the weekends

3. Estimate an average price per ticket > taking into consideration the differnt sessions that are layed out in the prompt.

With these 3 points, you have all solved for the classical P x Q.

Hope it helps!

Cheers,

Clara

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Vlad
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updated an answer on Feb 18, 2020
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi,

I believe you have more than needed information to solve the case.

  1. Assume the share of malls with cinemas
  2. Assume the number of cinema rooms, working hours, average size and occupancy during the week and the weekend, and the number of movies per day in each.
  3. Assume different ticket prices by segment

Best

(edited)

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