'Sense check' at the end of a market sizing

Case Interview Market sizing
New answer on Jan 09, 2021
6 Answers
1.0 k Views
Anonymous A asked on Jan 03, 2021

Hi,

I'm struggling to make an insightful sense/reality check once I get to my final number in market sizing problems. At the moment, I tend to just say whether my number 'feels' large or not, but was wondering whether there are tangible things to compare it to (e.g. spend per person in that country, etc.)

Thanks!

(edited)

Overview of answers

Upvotes
  • Upvotes
  • Date ascending
  • Date descending
Best answer
Vlad
Expert
Content Creator
replied on Jan 04, 2021
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi,

First of all, a sanity check is not mandatory. Thus, no sanity check is better than a bad check.

Now, if you want to do a sanity check, you should find a comparable number that is either available or can be easily calculated (E.g. cross-checking supply approach with demand and visa versa is not a sanity check since it'll take to much time. It's just another method of approaching the case).

  1. Start with an objective - what is the exact number that you want to prove is big or small (note that if the market was calculated in dollars, you still might want to do the sanity check for units)
  2. Look for similar geographies, locations, etc. that you can use as a set up
  3. Try to find the comps that will help you look from a different angle / take a different perspective

Best

Was this answer helpful?
Ian
Expert
Content Creator
replied on Jan 04, 2021
MBB | 100% personal interview success rate (8/8) and 95% candidate success rate | Personalized interview prep

Hi there,

Great question!

My best recommendation is that you start reading more. The Financial Times, The Economist, etc. The more you read, the more you'll get a sense for numbers.

In terms of helping you ASAP, however, I highly recommend you lookup references. Some key examples I can think of include:

  • Country populations
  • Household incomes across rich, middle income, and poor countries (and segments of society)
  • Demographic details
  • Size of major industries (in your home country)
  • "Random" facts, such as:
    • Annual per capita spend on clothes
    • Annual consumption per capita of x food item
    • Etc.

I have a market sizing presentation + supporting materials. Shoot me a message and I'm happy to take you through this! (Includes a thorough breakdown of some of the key numbers to learn)

Was this answer helpful?
Clara
Expert
Content Creator
replied on Jan 04, 2021
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

Indeed, sanity checks and so-whats are key components of a good market sizing.

Even when you have no idea -most of the cases, actually-, you can try to problem-solve it iwth the interviewer (e.g., do we have any benchmark from a similar industry/geography? etc.)

Best regards,

Clara

Was this answer helpful?
Gaurav
Expert
Content Creator
replied on Jan 04, 2021
Ex-Mckinsey|Certified Career Coach |Placed 500+ candidates at MBB & other consultancies

Hi there,

As it has been said already, the best way to get accustomed to the numbers is to go look for them, trying to compare them to other ones, ex the % of wealthy people to the whole population, the % of people living in big cities etc, as well as random number facts.

Cheers,

GB

Was this answer helpful?
Antonello
Expert
Content Creator
replied on Jan 04, 2021
McKinsey | MBA professor for consulting interviews

Hi,

Thanks a lot for the very interesting question.

I think the other coaches gave you great tips already.

I want to add another one that is especially useful for market sizing. The tip is: propose the interviewer a different approach (also quick and dirty) that will allow you to get to the solution and therefore check whether that is correct.

Hope this helps.

Best,

Antonello

Was this answer helpful?
Anonymous replied on Jan 09, 2021

Hi,

I would use this as an opportunity to have a discussion with the interviewer. In the case you don't know or not familiar with the data, try to present the comparison that you will use and discuss with the interviewer if he / she has the data that can help you. Most likely they won't have the data but at least you showed a comprehensive thinking and initiative.

Best,
Iman

Was this answer helpful?
0
Vlad gave the best answer

Vlad

Content Creator
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School
426
Meetings
11,815
Q&A Upvotes
127
Awards
4.9
186 Reviews