Are there any recommended resource that consolidates market sizing questions and detailed sample answers? I am currently using case books and preplounge as practice source but I want to specifically enhance my market sizing approach. Thanks in advance!
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Resources to practice market sizing
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Hi,
It's less about the quantity, but rather about the tools that you use:
1) First of all, there are 2 ways to structure market sizing:
- Formula - basically a math formula to come up with a solution. The problem with the formula is that it is easy to forget something or get lost.
- Tree - same as with regular cases you build a tree. A very simple example: you need to calculate the number of dogs on manhattan. A number of dogs = share of households having a dog * # of households. # of households = population / average household size. In the end, you'll have a pyramid where you have to fill the numbers on the base of the pyramid. This approach is much easier and help you track all the numbers
2) You should learn the key market sizing techniques:
- Making assumptions based on personal experiences (Use the example of your house where out of 100 apt-s 10 have dogs)
- Adjusting numbers (NY is a busy city thus fewer people have dogs)
- Sanity check - try to apply your calculations to the real environment
- etc.
3) You should learn the key tools:
- Using age even age split (suppose life expectancy is 80 years. Assuming even age split we have 4 mln people in US of each age)
- Using 80/20 split (suppose 20% people earn 80% wealth and the average salary is xx...)
- Using approximations (Length of NY-SF flight and plane speed to calculate US length)
- etc.
4) Learn key numbers: populations, gas price, gas consumption, Boeing speed and nmber of seats, average salary, # of gates in the airport, GDP growth rate, inflation, etc.
5) Practice 10-15 cases and you'll be fine. Almost all casebooks have good market sizing examples and the solutions
Feel free to PM for clarifications
Good Luck!
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If useful I attached some good solutions of common market sizings:
- https://www.preplounge.com/en/consulting-forum/how-much-would-you-charge-to-clean-all-the-windows-in-seattle-4965
- https://www.preplounge.com/en/consulting-forum/market-sizing-milk-consumption-5087
- https://www.preplounge.com/en/consulting-forum/how-would-you-calculate-the-value-of-a-cow-4982
- https://www.preplounge.com/en/consulting-forum/estimate-number-of-traffic-lights-in-a-london-5692
Best,
Antonello
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Hi,
It is super easy to find a market sizing exercise. Just look at things around you in your life. E.g. if you go exercise, what is the market size of your sports shoes? If you order food delivery, how would you calculate the market size of food delivery? If you pass a building on the road, what is the total glasses sold to for building purpose every year?
You can practice anytime anywhere, on as many topics as you want. After you think them through thoroughly, check your thoughts with some of your peers/friends or occasional a coach to get feedback for improvement. Practice and iterate is the best way to improve.
Best,
Emily
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Hello,
You can find a lot of examples even in this forum, with experts giving their advice in the answers.
Feel free to text me if you want some examples coming from real interviews.
Best,
Luca
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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:
- Just like in a case, make sure you understand the question - what are you really being asked to calculate
- Decide whether a top-down or bottom-up approach is best
- Figure out what you know you know, and what you know you don't know, but could estimate
- This helps you determine how to split out buckets
- 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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Dear A,
You can find many expamles of cases in a Case Library here on Preplounge, or in every case book has a dedicated chapter. Just practice 1-15 cases.
I aslo have some material to practice with my mentee, if you are interested, just feel free to drop me a line.
Best,
André
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Hello!
Market sizing are normally part of cases, that emcompass also other topics such as structuring, mathematical agility and calculations, etc.
Best way to practice is to (1) do these kind of cases -in which you are also practicing hollistically- and (2) practice directly market-sizing brain teasers -to focus specifically in this-. You can find endless pages in Google with those, and they are fun to practice even among friends (e.g., you don´t need a consulting-specific setup, which can be sometimes difficult to have).
Hope it helps!
Cheers,
Clara
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