Market sizing case (demonstration and commentary)
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- เผยแพร่เมื่อ 2 พ.ค. 2024
- Market sizing case with commentary from Consulting Confidant.
To see more live case demonstrations, check out our Practical Case Interview course at consultingconfidant.com/practi...
Consulting case interviews are not about getting the right answer. Those of you who said this case was easy focused on the mathematical mechanics of getting the right answer. It was about how you approach the case, how you communicate, how you connect with the interviewer that will reflect whether you have the potential to become a successful consultant.
woah man these guys only have 4 videos yet they are the best out there
very calm and collected! Great job! Thanks for the video!
I wonder if it would have been okay to assume that the high market is willing to pay more for cheese and therefore use a higher unit price for this group?
This was so well done and thoroughly explained. Thank you.
Thanks for this video.
Thanks for the video. This is how I did the case. I was wondering if you could give me a feedback.
1- 300 M population (90% consume cheese), (10% tolerant)= 270 M people consume cheese
2- 270 M people makes total 90M families ( assuming that 3 people per family)
3- $ 10/week for cheese consumption per family. $40 per month/family. $500 year/family
4- 90 M families x $ 500= 45 B per year in the US
This is not wrong, but I believe (correct me if I am wrong) that consuming cheese is something that is done individually by a person. So they need to be considered as separate entities to get better variations. So, if it was something like the number of cars present in United States, then the household groupings would be a better approach because a car is not something just owned by an individual. It is the property of a household and ownership shared, but the cheese consumed by a person is not shared.
Hope it was of some help:)
Households can work here. Individuals is slightly better but households can work especially if you apply an average and make sure to mention that 1 person household will be different than 4 person household. Reason households can work is that for a family of 3, the mom might be doing all the shopping and the household in a way is consuming the cheese as a "unit" that can be tracked on a weekly/monthly/yearly basis.
Lovely! Thank you!
was a beneficial market sizing example
I wonder if the price of cheese can be can higher for high market like 10 dollars per unit, for middle market 5$ per unit
great video
Why did Consulting Confidant stop posting new videos? These are really great.
Thanks Yin. Stay tuned for more videos!
how do i know whether 75B high or low for the cheese revenue in USA, but what if the question was for an industry i was never heard of or never was a part of the consumer to begin with? For example, i won't know what to expect in the fishing industry, or tuxedo or tie....
Great question. The key here is triangulation. Here are some ideas to help you:
First, you should know the size of some basic things like: GDP in your country & the revenue of a couple well known companies, especially large companies. For example, if you end up with a market size of a relatively obscure good being, 1/5 the GDP in that country, you know that's a bit crazy.
Second, you can always use a very quick back of the envelop check. A good quick spot check especially for consumer goods is assuming $100 per year for everybody in the US (~300M people), which gives you ~$30B per year. This allows you to compare whatever number it is to the assumption that everybody pays $100 per year. So whether it's fishing or tuxedos, you can always ask yourself how consumption of that product compares to everybody paying $100 per year (about $2 per week), giving you $30B. So in the cheese case, everybody paying more 2x this $100 per person rate doesn't seem too crazy since $2 per week is pretty low for many Americans who eat cheese.
It's a matter of taking numbers you do feel good about and then comparing them. Good luck!
That was very helpful, If I may, I also want to ask what percentage of revenue or profit increase is worth pursuing for companies? I've seen ppl commenting on a 10% increase being substantial, as well as 150% increase substantial. What do you recommend to look up depends on the industry so i can grasp whether such growth is attractive ?
Thank you in advance!!
I don't think there are any standard answers here, but I'm guessing that a good way to determine if 10 or 50% is required to pursue something is to ask what the risks and opportunity costs are. If a zero risk project will earn a 10% growth off the bat with zero downsides and there are no other opportunities with a higher reward/risk ratio then it makes no sense to not pursue the project and just leave the money in a bank earning 1 or 2% in interest.
+hurf_durf good point. Thanks
volume is low, information is great..
Its hard to know how much I eat tbh how do I solve if I dont know how to quantify?
Are any of those numbers based on the research or it's just pure guessing?
Guessing lol
Can you include restaurants, pizzarias, deli's, caterers, fast food chains, school, college, company cafeterias supermarkets, groceries, and cheese varieties?
He did by considering their customers.
😊👍🏻
I am lactose intolerant but I can eat cheese (and I love it!)
Hey, great vid. Thanks.
Why did he multiply by 50 and not 52??
Easier to calculate. So assume 50 instead of 52
"so whats the market size?" - "hmm, let me pull some numbers out of my ass"
So that's not how being lactose intolerant works....
Quite some errors in this one. The only takeaway is to visualize the entire equation and present it to the interviewer.
500gm cheese per week ? No wonder obesity is sky high in US!
the percentages are wrong:
20% of a 250 million population = 50 million
75% of a 250 million population = 187.5 million(not 200 million)
lullabai It is rounded off for ease of calculation. The cost of computing an accurate result outweighs any benefit from this added accuracy. Use 80/20 rule.
He failed to size the market for WOMEN who eat cheese in the United States as requested in the initial prompt.