@@Aggarwal0709 0.5 *0.4 explanation: 0.4 is the 40% representing the penetration share of middle-class families in Tier II cities. ie. assumption is that only 40% of middle-class families in Tier-II would use a washing machine. 0.5 is the 50% representing the percent of middle class families in Tier-II cities. So, when we multiply the 0.5 with 0.4, what we mean is that of the 50% population in Tier-II (which is the middle class), only 40% use a washing machine, i.e. 0.5*0.4= 0.2; i.e. total 20% in Tier-II use washing machine. This is just the middle class part. You should add the rich class too, which is 10% of Tier-II with 100% penetration (so we know all 10% rich class in Tier-II use washing machine). So we add 0.1 to 0.2 or 10% to earlier 20%. So total washing machine penetration in Tier-II is 30% I hope I made some sense. I suck at explaining things to others.
To demonstrate the MECE principle, always ask the interviewer all the exhaustive list of questions. Here I would also ask whether we are looking at fully automatics, semi-automatic, or simple washing machines. There dynamics of these three will be very different. In guesstimate questions MECE principle is most important followed by structured thinking
Hello, great video. However, I have two comments 1) Why not to approach from supply side - a) We would have to estimate the number of suppliers - True and valid. b) manufacturers making different type of washing machines - this is not valid, we care about the total in the end. c) Channels of sale - Again, not valid directly. Only (a) is a relevant point here in my view 2) Market share calculation - Market share by only considering the number of units is incomplete. Market share is revenue of one player/size of that industry. Therefore, we need both units sold and price per unit.
For number of washing machines in India, we can also check with interviewer whether we should include or exclude the unsold inventory present in manufacturing plants, warehouses, retail outlets, etc.
This was the exact question grail research, gurgaon asked me in 2010 during job interview & I started with india's population, divided it into segments, took 4 people in each household but still I was not selected 😒
Hey Unnati! Would you like to share your interview experience and the questions they asked you? It'd be super helpful for peeps like me preparing for interviews!
10:00 the market share of existing dominating brands was not taken into account , out of 47 lac washing machines selling every year majority of machines are sold by big players which will eventually reduce the market share of the new manufacturer trying to enter the market.
Question, should all guestimate questions have these two to three level approach? For example would it be seen poorly if from the household data, I went straight and said 60% of households are rich and middle class and have 1 washing machine, vs dividing it by cities and then by classes and then by penetration?
Hi, thanks for the great video. The approach was very insightful. Can you put up an example of a problem getting solved using the supply side approach?
Hey Anubhav, please refer to the video on the following link for an example of how to solve a problem from supply side. Link: th-cam.com/video/gh_fIUCGWAY/w-d-xo.html
Hi, I felt like it was unnecessary complex to segment into cities and then into income groups. Isn't it quicker and more comprehensive to segment according to income tiers from the get-go? That was my approach and I got a similar final answer. Although answers don't matter, the thought process does.
Hello, requesting to recheck the growth element. It can not be 5% of 4.7 Cr. It should of 5% of what is sold in each year i.e. 47 lakhs. Answer should be 51,70,000 Another way to verify is that wihout growth element demand per year is 47 Lakhs.. Can demand increase by 50% each year?
Percentage of people in said classes to own a Washing machine. Ex- not all middle class families own a washing machines, so we’re assuming half of them own one. Hence penetration is 50%
hi thanks for this video but i didnt understand that calculation involving washing machine sold each year, the last part of it....5% of 4.7 crore is not 2.3 ...pls explain
Since the calculation is made via population, it is incorrect to use the economic growth rate. We should be using the population growth rate for that i.e. 1%. Am I missing something? Also, shouldn't it be 5% of the annual sales and not the total market share?
I think using population growth as a proxy might be problematic because sectoral growth rarely track population changes practically. Factors affecting such growth are usually economic. Hence, economic growth rate might be safer. Not sure. There is no right answer here. Also, annual sales are what we are trying to compute coz we only have the current market size. So we are assuming a growth of 5% every year based on current market size.
I think it's , how many families buy a new one after there old one gets damaged, they took assumption of 10 years that's why 10% of total washing machine getting replaced every year.
In replacement= current market size/ Avg. Life = 4.7/10 = 0.47 but you guys write 4.7 directly. How can total no. of washing machines at household smaller than no. of washing machines sold in a year. Please make it correct. Overall the content is very good and knowlegable.
No , that would give the increase in no of washing machines sold per year compared to the the previous year . Here the goal is to find the total no of washing machines sold due to the increase in growth rate of the economy.
I think vishaal last ans was wrong, how could you add 4 .7+ 2.3 =7 Current market size is 4.7. Then to correct ans should be 4.7/10= 0.47. Washing machine sold will be equal to 0.47+ 2.3= 2.77 cr
@UCrq83R9MiXbuChoqGqGpIWQ why would the penetration be different in middle class in different areas? Is it because the urban middle class is more well off than rural middle class or is there a demand/supply problem in rural areas which lowers the penetration?
Yeah he took approx 8-10 minutes that too without doing calculations and using the pre calculated values ,this approach would take atleast 15-20 minutes in real time interview 😂
The guesstimate is not completely exhaustive. Washing machines would be used by commercial establishments also like hotels,hospitals , guest houses etc. So if you have assumed population only as the criteria is wrong.
Not every family in india can afford a washing machine. Especially BPL families. I think it’s an important assumption to consider while talking about India.
what Vishal did well was "memorize the entire answer" :D
🤣🤣
exaaccccttly🤣🤣🤣🤣
🙊😂
😂
😂😂😂
I finally understood how to solve these type of problems.Thank you so much for uploading this.It will be useful for the job interview.
Hi can u explain me how they calculate the machine penetration? Like why they multiply 0.5 and 0.4?
@@Aggarwal0709 0.5 *0.4 explanation: 0.4 is the 40% representing the penetration share of middle-class families in Tier II cities. ie. assumption is that only 40% of middle-class families in Tier-II would use a washing machine.
0.5 is the 50% representing the percent of middle class families in Tier-II cities. So, when we multiply the 0.5 with 0.4, what we mean is that of the 50% population in Tier-II (which is the middle class), only 40% use a washing machine, i.e. 0.5*0.4= 0.2; i.e. total 20% in Tier-II use washing machine. This is just the middle class part. You should add the rich class too, which is 10% of Tier-II with 100% penetration (so we know all 10% rich class in Tier-II use washing machine). So we add 0.1 to 0.2 or 10% to earlier 20%. So total washing machine penetration in Tier-II is 30%
I hope I made some sense. I suck at explaining things to others.
To demonstrate the MECE principle, always ask the interviewer all the exhaustive list of questions. Here I would also ask whether we are looking at fully automatics, semi-automatic, or simple washing machines. There dynamics of these three will be very different. In guesstimate questions MECE principle is most important followed by structured thinking
Exactly this is very important, if you don't ask these questions the whole assumptions falls flat
no if you're calculating the number of washing machines
Not required to calculate total washing machines sold
Hello, great video.
However, I have two comments
1) Why not to approach from supply side - a) We would have to estimate the number of suppliers - True and valid. b) manufacturers making different type of washing machines - this is not valid, we care about the total in the end. c) Channels of sale - Again, not valid directly.
Only (a) is a relevant point here in my view
2) Market share calculation - Market share by only considering the number of units is incomplete. Market share is revenue of one player/size of that industry. Therefore, we need both units sold and price per unit.
can you please tell me how would the tree flow look like while solving from the side of the suppliers
Excellent effort.Would love to see more videos like these.
A good way to learn guesstimates. Do upload more such videos.
This channel is pure gold
For number of washing machines in India, we can also check with interviewer whether we should include or exclude the unsold inventory present in manufacturing plants, warehouses, retail outlets, etc.
We need more of these videos :)
This was the exact question grail research, gurgaon asked me in 2010 during job interview & I started with india's population, divided it into segments, took 4 people in each household but still I was not selected 😒
Kismat ☹️
Hey Unnati! Would you like to share your interview experience and the questions they asked you? It'd be super helpful for peeps like me preparing for interviews!
250000th viewer.......Thanx from NIT Raipur for this material
This is great! waiting for more!
Thanks a lot for the video, please share more videos.
The best guestimate explanation so far Thanks and keep doing this. once again Thanks
Thank you, this was very helpful! Learned a lot!
10:00 the market share of existing dominating brands was not taken into account , out of 47 lac washing machines selling every year majority of machines are sold by big players which will eventually reduce the market share of the new manufacturer trying to enter the market.
Question, should all guestimate questions have these two to three level approach? For example would it be seen poorly if from the household data, I went straight and said 60% of households are rich and middle class and have 1 washing machine, vs dividing it by cities and then by classes and then by penetration?
Great approach…very much organised and straight to the point
Excellent Initiative!
Great Approach
Hey..
Could you please share the guesstimate of volume of copies of a particular novel sold by flipkart across India.
Hi, thanks for the great video. The approach was very insightful.
Can you put up an example of a problem getting solved using the supply side approach?
Hey Anubhav, please refer to the video on the following link for an example of how to solve a problem from supply side.
Link: th-cam.com/video/gh_fIUCGWAY/w-d-xo.html
@@theconsultingstrategyclubi7074 Thanks a lot, much appreciated.
Hi, I felt like it was unnecessary complex to segment into cities and then into income groups. Isn't it quicker and more comprehensive to segment according to income tiers from the get-go? That was my approach and I got a similar final answer. Although answers don't matter, the thought process does.
By how much percent you split based on income @Aarushi Joshi
I was thinking same. They made this more complicated as it would become difficult to compute?
@@destinydost5054 yah i just divided the households to rich, middle class and poor in 10:60:30 ratio and got exactly 70L ans.
Can you please share your approach?
Vishal took 5℅ CAGR as 50℅ so over estimated the the number of washing machines sold in a year by 2.07 Mn.
This was a really insightful video.
Can you please provide a solution to the same problem when approaching from the supply side.
Very useful session! Thanks a lot.
Hello, requesting to recheck the growth element. It can not be 5% of 4.7 Cr. It should of 5% of what is sold in each year i.e. 47 lakhs. Answer should be 51,70,000
Another way to verify is that wihout growth element demand per year is 47 Lakhs.. Can demand increase by 50% each year?
Yes, you're right.
It will be 47 lakh + ( 5% of 47 lakh Sold WM per year ) = Round upto 50 Lakh
hi, I didn't understand the washing machine penetration maths, could u please help me with that
+1
Percentage of people in said classes to own a Washing machine.
Ex- not all middle class families own a washing machines, so we’re assuming half of them own one. Hence penetration is 50%
This was very helpful. thanks. It helped me a lot in preparation for interview
Pls keep up the good work and keep'em coming! #PGP29001
Why has he not devided replacement year to 4.7……?
What is the total length of Railway track 🛤 in India?
Can you please help out with this guesstimate
Great work guys thanks
why are they dividing the market size by the avg life ?
Thank you so much, really helpful, ♥️
hi thanks for this video but i didnt understand that calculation involving washing machine sold each year, the last part of it....5% of 4.7 crore is not 2.3 ...pls explain
Since the calculation is made via population, it is incorrect to use the economic growth rate. We should be using the population growth rate for that i.e. 1%. Am I missing something?
Also, shouldn't it be 5% of the annual sales and not the total market share?
I think using population growth as a proxy might be problematic because sectoral growth rarely track population changes practically. Factors affecting such growth are usually economic. Hence, economic growth rate might be safer. Not sure. There is no right answer here.
Also, annual sales are what we are trying to compute coz we only have the current market size. So we are assuming a growth of 5% every year based on current market size.
What exactly are we getting in "Replacement" section, where you've written (Current Market Size)/Life? Time Stamp: 09:54
I think it's , how many families buy a new one after there old one gets damaged, they took assumption of 10 years that's why 10% of total washing machine getting replaced every year.
@@NishantDhingraffgg Thanks!
In replacement= current market size/ Avg. Life = 4.7/10 = 0.47 but you guys write 4.7 directly. How can total no. of washing machines at household smaller than no. of washing machines sold in a year. Please make it correct. Overall the content is very good and knowlegable.
They have converted 4.7 crores to 4.7 millions while scaling it down.
@@hitish5417 Oh yeah Thanks for pointing this out.
But why they converted crore into millions as total no of machines were 4.7 crore
I didn't understand washing machine penetration calculation. Can anyone breakdown that for me ? thank you!
We can crunch more on rural and urban
hello, you've considered the houses, what if we consider those small lodges, hotels etc.?
Thanks a lot for this wonderful vedio. Very much helpful to me. 😁
There is a static sound in the video.
Great approach
Um if the growth rate is 5% a year shouldn't we take 5% of no of washing wachines sold per year instead off of total washing machines in india?
No , that would give the increase in no of washing machines sold per year compared to the the previous year . Here the goal is to find the total no of washing machines sold due to the increase in growth rate of the economy.
Why should we not consider laundromats and hotels which use washing machines too?
I think vishaal last ans was wrong, how could you add 4 .7+ 2.3 =7
Current market size is 4.7.
Then to correct ans should be 4.7/10= 0.47.
Washing machine sold will be equal to 0.47+ 2.3= 2.77 cr
Excellent
very helpful
How washing machine penetration row calculated
Thank you for the approach :)
@UCrq83R9MiXbuChoqGqGpIWQ why would the penetration be different in middle class in different areas? Is it because the urban middle class is more well off than rural middle class or is there a demand/supply problem in rural areas which lowers the penetration?
Great video, also the number 7 Mn to which you arrived is very close to the actual figure.
Great🙌
Good approach. However, i believe hotels, hostels etc too use washing machines that was not considered in above guesstimate.
they mentioned domestic type only so these options i guess should not be considered.... This is my guess, you might correct too
The one at hostel comes under the commercial one
That could be one of a scoping problem
Can you do a guesstimate of how many iphones are sold in India
Great
Audio Quality is very poor........Pls Improve.....Thanks for Guesstimate......
thank you!!!!
Thank you
I need help with Gartner business associate interview. Can someone help me where to study for it
Yeah he took approx 8-10 minutes that too without doing calculations and using the pre calculated values ,this approach would take atleast 15-20 minutes in real time interview 😂
that +5 % growth at the end that leads to 2.3 million seems wrong , it should be 5 % of 4.7million isnt it??
yup, it's wrong.
Hey, could you please make videos on how to solve case studies.
Someone here, please tell me, what is penetration meant by?? Please
the % of people who have washing machine in the specified class. :)
The guesstimate is not completely exhaustive. Washing machines would be used by commercial establishments also like hotels,hospitals , guest houses etc.
So if you have assumed population only as the criteria is wrong.
Watch video again
video to dekh le gyan dene se pehle
Approach is good but assumptions are poor
4.5 cr + 2.3m
so how can be 7m
Crores and millions are not same.
Way of delivery was not pleasing.. makes it boring for the listner
👌🏻
Look at the interviewer 😂
how do you just switch from crores to millions? stick with one metric. crores to lacs
Why waste time dividing the 3 city types in Poor, Middle and Rich when you didn't use those anyway?
The tier breakdown was not necessary
Per capita income based approach would be much better. Rich, poor, and middle class are bros terms.
Broad*
8:00 and 9:45
Villages have a negligible middle class..the rich and poor are more.
Check out fermiproblems.in for a collection of great guesstimates
Nice joke.... Villagers being poor.... It's said jitna tum kamate utna ki hum dawai udata 😂😂
Not every family in india can afford a washing machine. Especially BPL families. I think it’s an important assumption to consider while talking about India.
Well that 'tttaa' sound with every 't' spoken was not very pleasing to hear!..LoL
Guesstimate ttttt
Thank you