We are a profitable American provider of fire and water remediation services. We are generally hired by insurance companies to provide cleaning services in the wake of burning and flooding damages. We we would like your counsel on whether to enter the growing USA traditional residential cleaning market or not. Traditional housecleaning usually takes place 2-3 times per month.
The case is designed to be presented to the candidate by an interviewer, who plays the role of a representative of an American provider of fire and water remediation services.
The firm should enter the US household cleaning market.
The interviewee should perform a back-of-envelope calculation which answers two key questions:
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If asked about competition, provide the following information to the candidate:
If asked about customers, provide the following information to the candidate:
If asked about profitability, provide the following information to the candidate:
Provide the following information, if requested
The market is large and looks attractive; the client also has transferable skills and contacts.
We can do a preliminary margin analysis:
[$60 price] - [4 hours * $10 hourly labor costs] - [$5 cleaning materials costs] = $15
Profit margin = 15/60 or 25% profit margin
Important things to do before entering the market:
The size of the US household cleaning market is $50 billion; it is large and attractive (25% margin). Therefore the client should enter the market.
If the interviewee solves the case very quickly, you can come up with more challenging questions.
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Dear Anonymous, Congratulations on your final assessment step!. The structure of your presentation should be similar to the structure you would present in a case interview(remember, there is no cor... (more)
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Market Sizing Cases are used to test your quantitative and reasoning skills. The interviewer evaluates your structure, numbers-handling and business sense.
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