Market Sizing
Estimate a number nobody has. Pick a path, state assumptions the interviewer can check, and sanity-check the answer.
Practise a market sizing case40 cases in the library
Market size
- Demand side: who would buy?
- Start from population
- Narrow to those who need it and can afford it
- Supply side: how much can be made or served?
- Start from capacity
- Hours, throughput, utilisation
Market size
Demand side: who would buy?
Start from population
Narrow to those who need it and can afford it
Supply side: how much can be made or served?
Start from capacity
Hours, throughput, utilisation
Watch out: Use supply when capacity is the limit: one restaurant cannot sell more than its kitchen makes.
On a case
How many washing machines are sold in India in a year?
Washing machines sold a year
- Households that could own one
- Population, about 140 crore
- People per household
- Urban or rural
- Income groups that can afford one
- Share of those buying this year
- First-time buyers
- Replacements, every 8 to 10 years
Washing machines sold a year
Households that could own one
Population, about 140 crore
People per household
Urban or rural
Income groups that can afford one
Share of those buying this year
First-time buyers
Replacements, every 8 to 10 years
Go deeper
How it is lost
Failing to Segment
Instead: Narrow by time, geography, product or segment before hunting for causes. An average hides the thing you are looking for.
Magnitude Blindness
Instead: Size decides relevance. Check how large a driver is before treating it as the explanation.