Dear Community,
Could you please guide me on this case offered on Bain website, here is the link
from the minute 4-10 they talk about the statistics to calculate what would be the market size...
my Q is exactly here. we have 600k restaurant in the US, 5% of them are willing to buy the e-menu and they buy in average 30 devices + we need the # of resto that replace their devices which is 50% according to the interviewer
the math for me is 600k *2% = 30k restaurant - new customer
30k* 50% = 15k existing customer who replace --> the whole market = 45k restaurant then 45k*30 devices = 1mil350K devices
BUT the interviewee did not not consider 30k new restaurants and just calculated the 15k who replace the devices to calculate the market size in $
at the end, the interviewer evaluated that the candidate calculation is accurate..... How?! WHY?
thank you for your justification
@joe thank you for the reply. in fact, my Q is still there... why the interviewee didnot calculate the new customers and just considered the growth rate (the restaurant who want to change their device)?!!
If we want to arque this is the first year they launch the product, still the interviewee need to calculate new customers who switch from current menu to e-menu not the growth rate... for me it is still absurd