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Antonello

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4

World Market size of luxury stereo systems

Dear all,

How would you approach the question "what is the world market size of luxury stereo systems?"

What are relevant assumptions here?

Many thanks in advance!

Dear all,

How would you approach the question "what is the world market size of luxury stereo systems?"

What are relevant assumptions here?

Many thanks in advance!

(edited)

4 answers

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Hi, I would frame it dividing the problem into 2+ parts, after clarifying with the interviewer (e.g. home stereo systems, car stereo, ...). For instance, about the car stereo I would imagine to structure it like a penetration on the premium and luxury segment {e.g. estimate n. of cars, % of the premium (20%?) and its luxury stereo penetration (20%?), % of the luxury (3%?) and its luxury stereo penetration (80%?)}. What do you think?

I would like to suggest similar cases in the platform to practice with:

Hope it helps,
Antonello

Hi, I would frame it dividing the problem into 2+ parts, after clarifying with the interviewer (e.g. home stereo systems, car stereo, ...). For instance, about the car stereo I would imagine to structure it like a penetration on the premium and luxury segment {e.g. estimate n. of cars, % of the premium (20%?) and its luxury stereo penetration (20%?), % of the luxury (3%?) and its luxury stereo penetration (80%?)}. What do you think?

I would like to suggest similar cases in the platform to practice with:

Hope it helps,
Antonello

Hi! That makes totally sense for the car stereos, thanks a lot! But how would you go for home stereos as well as stereos in bars/restaurants/clubs considering the whole WORLD market. That is not clear to me. Many thanks! — Anonymous A on Apr 30, 2021

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Hi there,

I see from your comments in the prior answers that your main concern is regarding the "world" aspect of this sizing.

If you would like to take your previously provided response for a country, you can then extrapolate it! Here's what it looks like:

1) Answer from your country estimates (let's say the US) = x

2) Breakdown of world

  • Western Europe = x
  • Eastern Europe + Russia = .5x (about the same pop but less developed)
  • Central + S America = .5x (about the same pop but less developed)
  • India = x (much larger but much less developed)
  • China = 1.5x (much larger but less developed)
  • East Asia = 2x (same size and about as developed)
  • SE East = .5x (same size and less developed)
  • Africa = .5x (much larger but much less developed)

So, you can estimate your answer to be the # for the US times 7.5 :)

Hi there,

I see from your comments in the prior answers that your main concern is regarding the "world" aspect of this sizing.

If you would like to take your previously provided response for a country, you can then extrapolate it! Here's what it looks like:

1) Answer from your country estimates (let's say the US) = x

2) Breakdown of world

  • Western Europe = x
  • Eastern Europe + Russia = .5x (about the same pop but less developed)
  • Central + S America = .5x (about the same pop but less developed)
  • India = x (much larger but much less developed)
  • China = 1.5x (much larger but less developed)
  • East Asia = 2x (same size and about as developed)
  • SE East = .5x (same size and less developed)
  • Africa = .5x (much larger but much less developed)

So, you can estimate your answer to be the # for the US times 7.5 :)

(edited)

Thanks so much for the hint, very helpful! But what about the factor of stereo systems used by bars/restaurants/cafes/clubs? How would you approach the sizing here? Thanks so much for your help! — Anonymous A on Apr 30, 2021

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Hello!

I would always recommend you to give it a shot and then post it here, this would help you the most.

This is a very typical market sizing case, where the key steps are:

Calculate the total population

Calculate the % of population that could be interested in this product (this could be done by clustering -the classical ones are age groups, purchaching power, etc.-)

Calculate the % of the total adressable market that any firm in particular could have -in case it´s asked only-.

Hope it helps!

Cheers,

Clara

Hello!

I would always recommend you to give it a shot and then post it here, this would help you the most.

This is a very typical market sizing case, where the key steps are:

Calculate the total population

Calculate the % of population that could be interested in this product (this could be done by clustering -the classical ones are age groups, purchaching power, etc.-)

Calculate the % of the total adressable market that any firm in particular could have -in case it´s asked only-.

Hope it helps!

Cheers,

Clara

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Hi A!

Why don't you practice and present your approach? Than we can comment and make suggestions?

Hi A!

Why don't you practice and present your approach? Than we can comment and make suggestions?

I would love to, but I am a bit frustrated with this one as I really do not know how to approach this question. I would highly appreciate your help! — Anonymous A on Apr 30, 2021

Hi Henning, I thought of it in the following way: the drivers of the market in terms of value would be A) private customers and B) bars, restaurants, clubs using luxury stereo systems. I could make assumptions about the private users by dividing the population of a country into age buckets and allocating shares of having a stereo system. But I am not sure how to incorporate the WORLD market in this and do not know how I would make reasonable assumptions about the bars/restaurants/clubs having luxury stereo systems. Can you help with this please? — Anonymous on Apr 30, 2021 (edited)

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