Market sizing is a popular type of case and serves as one of the most basic types of consulting case interviews. At its core, market sizing focuses on valuing and estimating, a foundational pillar of business.
Every product or service, whether it be a cup of coffee or a pharmaceutical drug has a market with a value. Determining this requires understanding the positioning of a given firm or market where the product or service would be delivered.
Approach to market sizing cases
In order to approach a market sizing case, you need to start with the fundamental numbers at play and the market you are serving. For example, if we were determining the market size of bagged coffee in the Netherlands, here is how we might think:
- Think of how much a typical grocery store bag of coffee would be (500 grams for example)
- Imagine how quickly a typical person would go through the bag (say 3 months)
- Consider the cost of that typical bag of coffee (example 5 euros per bag)
- Calculate the annual spend for a single person (5 euros x 4 bags a year = 20 euros)
- Estimate the total population of people whom would use coffee in the Netherlands (say 30% of the 18 million population = 5.4 million)
As you estimate numbers, try to round up or round down to whole numbers in your calculations. This way it makes it both simpler to calculate and more importantly also smoother to communicate to your interviewer, saving you precious interview time.
Once you have come up with your initial answer, walk back through it with the interviewer to make sure it makes sense. If something seems very off, you will then catch it at this point instead of presenting this as the final answer.
Summarize the problem
When you are ready to give your final conclusion, summarize the problem at hand that required the market sizing analysis in the first place, for example: “I was asked to look into the size of the Dutch coffee market in order to help our client, FreshyCoffee, and in conclusion….”.
With these basics in mind, repeated practice is key to becoming comfortable in solving market sizing cases.
About PrepareConsult:
PrepareConsult is a platform to practice the consulting case interview with AI and peers. PrepareConsult is founded by Milad Mohammadi and Sahhas Nathella.
Milad Mohammadi – 7+ years of experience in consulting and professional services with experience across North America and Europe.
Sahhas Nathella – 5+ years of experience in consulting and professional services with strong experience in complex digital transformations.
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