Beginner Market Sizing Example With Walkthrough
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- Опубліковано 23 лип 2024
- If you want to learn how to solve any market sizing, estimation, or guesstimate case like a top 1% candidate, check out our FREE course, Case Interview Fundamentals at www.craftingcases.com/freecourse. Module 2 is all about Estimations and Market Sizings, and I'll teach you a step-by-step method to solve any estimation case.
You'll also find three FREE cases for high-quality practice, with in-depth answers and comprehensive explanations of the thought process behind these answers.
In this video, you will watch me, Julio, an ex-Bainee, interviewing Bruno, ex-McKinsey, with a beginner-level market sizing case. Bruno can get solve this case elegantly, and he would definitely get an offer based on this case. Would you?
I also took the chance to pause the video in several moments to help you read between the lines and understand what's going on in this case. I'd say this video is a react to my own interview, which is kind of funny.
If you're looking to understand what a market sizing case is like and what's expected from you, you're in the right place.
If you want to move on to the next level and learn how to solve any market sizing and estimation case for your management consulting interviews, then I've also got a great deal for you.
As I said above, that's exactly what I teach in our free course, Case Interview Fundamentals. Just click this link www.craftingcases.com/freecourse and join now to learn how to solve any estimation course in a repeatable way that will impress any interviewer.
00:00 - Introduction and how to learn market sizings
01:10 - Case question
04:04 - Structuring: how Bruno will get to the answer
07:07 - Choosing assumptions: what numbers Bruno will use
19:03 - Calculating: Bruno actually gets to his final answer
21:44 - Reality checking: figuring out if this numbers makes sense
26:07 - Follow-up question and Bruno's answer
28:19 - How realistic is this case?
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Hope the best for your case interview preparation and I'll see you on the next video :)
Julio - Навчання та стиль
This is one of the best videos I have ever seen on market sizing case studies. Brilliant!
This guy is a genius, learning from his thought process has helped me so much!
Brilliant video, really helped get through the entire case thoroughly.
Amazing video. Helped me a lot preparing for my interviews. Thank you so much !!!
Just came here again to say that this and the other video are hands down the best video on market sizing that exist on UA-cam. You helped me through the interview! Thanks a lot
Excellent work btw, guys!
Love these videos. I work in strategy at a Canadian insurer and it’s so important to continually reality check (aka “sniff test”) our figures
Glad you enjoyed them, Julian. I also use these tests all the time - and without them I might have made some huge strategic mistakes.
Good stuff. Would definitely watch more videos like this one.
Good to know, Peter! I'm glad you enjoyed the video.
Really Loved this! Amazing content
Thanks Rajat!
Great material! Thank you so much!
Glad you like it, Gabriel!
Thank you! I only used your resources and practice with case partners and got offeres from all major consuulting firms including all three of the MBB.
Congratulations @Vio! Which one did you choose in the end?
Good luck on the new job!!
The landscape technique helped me so much. Its like it opened a third eye 😂 thanks guys
Thanks for this insightful video! I've been binging your content and was excited to see you guys back with a new video.
In the last 'reality check' segment of this video, I was wondering why Bruno used $40 per car per year on brake pads and not $80? If I was following the case right, we assumed 2 axles per car per year is replaced, which would be $80. I am quite confused here and would appreciate if you could help clarify this point :)
Hey Julia, nice point.
I think it really should be $80/car/y instead of $40. It's 2 axles every 2 years at $80 per axle, so $80 per year per car would be the right number.
hello, thank you for the amazing video! could have we directly used the average miles as 50 k miles as it is in between 30k and 70k?
Love your content. I was wondering about how to get from being a business analyst to MBB consulting?
Excellent video
I'm glad you like it, Nicole!
Splendid! 1 quick question: why don't you consider the growth rate of the market for break pads? What about break pads for the new cars? So, I think growth in the # of households, population, # of cars per households can increase the cars in use, and so the # of break pads.
Very good content
Glad you like it, Cintya! There's more coming your way.
For the follow-up question portion, can you please explain why we multiplied $16B by 2 and then divided by 3 to find the difference between being replaced ever 2 years vs every 3 years?
se llama escalamiento, si quieres llevar 1/2 a 1/3 haces (1/2)*(2)/(3) = 1/3, y esas son las partes replazadas por año y la cantidad vendida es proporcional
thanks!!!!!!!!!!!
Great content 👍
Thanks Akshay!!
@@CraftingCases Just FYI, I registered twice for the free course but never received any email with the course link.
@@jusugh Did you check the spam folder? If you find it there remember to move the email to the main inbox
Don't we need to account for brake pads in new cars sold?
Thanks for this nice video which is a nice add-on to your course!
I have a question regarding the scope of the case: Don't you need to consider the brake pads installed in new cars as well as an additional contribution to this market?
Thanks a lot in advance!
That's a good point, and any interviewer would appreciate that question. I this case we both assumed replacement market only, thinking that selling new brakepads to new cars is a whole different business.
One interesting point here: if I wanted Bruno to consider that market as well, I would know right away that he was going to leave it out, so we could discuss this separately right as he started his structuring.
This goes to show, once more: one should always make top-down structures, and clearly separate structuring from choosing assumptions.
Thanks, Ephraim!
@@CraftingCases If it were the other way around and they told me why I didn't consider that, I would say: that the number of new cars sold in the year is equal to the number of cars that are never repaired, therefore both are canceled.
Great content! I have one question, since cars are also durable goods, shouldn't we consider the replacement time of cars to calculate the number of cars in a year? That way the number of cars might be lower and hence the brake pads as well
Just something I noticed:
The interviewer did not explicitly mentioned that he was talking about the aftermarket/replacement brake pad market size, right? The candidate also did not ask that as a calrifying question.
How would you calculate for the B2B suppliers that sell brake pads for the auto makers?
Awesome video. However, why did we only consider the replaced brake pads on active cars? There are also break pads bought by automakers and installed on new cars, i.e. straight from the factory. Shouldn’t we have considered those too?
I was thinking the same thing. I would say that asking this as a clarifying question is the way to go.
It's been a while guys
We've been here all this time :)
What about newly bought cars?
MBA required for these companies?
I have one problem with the "Times replaced per year" calculations. If you decide to segment the users based on being commuters/non-cummuters, I would argue that taking a blanket 360 days a year is not valid. Commuters typically work 270 days per year - vacation days. Thus I would say that for the other 95 days, these commuters would be non-commuters.
boa! nice one
Glad you like it, Daniel!
I didn't got the logic of multiplying 21.6 k miles by 2 to reach at 42k, could you please clarify again! Thanks
I think he multiplied by 2 to get somewhere near the middle of the range of 30k-70k miles. (But he also acknowledges it should be higher than 2 since the true midpoint is 50k).
Since it takes 2 years to replace the axle on average, he can say he only needs to replace 0.5x a year.
Hi, why do we use 80$ for our reality check?
If we assume every household has 2 cars on average while replacing 1 axle per car on average (in a year), wouldn't we take 160$ dollars as our expense, 80$ for each car?
Would be helpful to gain some insight here!
Yes, I think it should be a mistake, actually the yearly espenses per each car is 80$
Could u please provide some discount on your market sizing course
Sorry Yash, but in respect to our students who joined at full price, we don't give away discounts. It would be unfair with them.
Hi Julio and Bruno!
I firstly want to thank you both for your excellent resources!
I am a 4th year engineering student at Oxford, and recently decided to shift into a management consulting direction as I am quite a lot more interested in applying structured problem solving to business rather than purely technical questions. I have been fortunate enough to receive a 1st round interview at Bain (London office) which is scheduled for next monday (the 14th) and have had a panic frenzy the past week as I realised I have so much ground to cover which most candidates have probably been practicing and honing for months at least!! Your free course outlining not only how to structure frameworks but more importantly how to think and approach questions has helped me immeasurably and has saved me a lot of time. I by no means feel remotely ready but I do feel distinctly better than a week ago!
I have been reading your helpful emails and generally scouring through case study resources, trying to apply some of the methods I have developed using your resources in tandem with the victor cheng book and my general analysis style - it has been hard work though as I am yet to get to a stage where I feel comfortably in my own ability to analyse. I feel like a danger as well is to just snowball with case after case. When you go through the solutions it seems so obvious and easy, and you feel like the next time you'd be able to get that, but in reality the whole skill is being able to ask simple questions in a rigorous, structured, and blanced way to bring clarity to vague open-ended questions, something which I don't believe you can gain by just doing 1 million cases - and I hope this is true as I don't have the time to do so!!
My dad is a CEO, and watching him effortlessly analyse these case studies having never done one before can be quite annoying! Despite not having the formal structured issue tree, his analysis hits every box and then some, and I just know that if he was doing this interview he would pass with flying colours with 0 prep. It has however highlighted to me that the skill on display is truly your ability to think 'like a consultant/CEO' which of course an undergraduate is not expected to do to the degree that a professional consultant will be able to, but it is still a good indicator of whether or not you are suited to this profession.
I find my intuition is good, I am a thoughtful analytic person. Where I am frustrated with my progress is in my ability to structure my brainstorming into MECE categories. Furthermore I tend to overcomplicate situations - examples being with case study math where I sometimes approach it like a market sizing question with penetration rates etc. I am solid at the actual maths, but often leap right into something convoluted unnecessarily. Finally and most importantly, I just don't have the confidence that comes with experience. I haven't gone through the internship interview process last year like most candidates, and have had roughly 1 week of case study prep from scratch. I believe in my abilities but there isn't always a substitute for time and experience.
I would greatly appreciate any advice you would have to someone in my situation. I have been, and am more than willing to put in as much work as physically possible, however working hard is never as effective as working hard with a clear direction. If you have any coaching sessions by the way I would be very interested!
I feel like opportunities like this don't come around too often. I am at an important junction in my career, and I really believe this to be a strong career step for me. I am not desperate to be a Bain consultant by any means - my long term goal is to surpass my dad and leave a mark on the corporate world as a top CEO, and I am fully aware that there are so many paths that lead to this, not just this one career and company. I do however feel like this is a strong fit for me, is in line with my long term goals, and is something I can see myself being very good at!
Once again thank you so much for your support to candidates like myself. I know I speak for the others when I say that your resources are very well thought through, logical, and easy to follow, with a clear focus on helping us go from memorisation merchants, to properly thinking through these case studies in a way that would actually be applicable in a business setting!!
Best Regards,
Rahul
Hey Rahul, a lot to unpack here!
If you already know that your weakness is on MECE brainstormings, definitely focus on that! You can use the techniques in our free course and on the "5 Ways to be MECE" article and practice with your own drills, that you can either find in casebooks or Structuring Drills. Just remember to be strict with the techniques when practicing.
You can also use your dad as a sounding board, he will definitely be able to tell you whether you're BSsing or getting to helpful answers in your practice. If you really want the help of a coach shoot me an email and I'll refer you to someone I trust.
Finally, just some (admittedly unprompted) personal advice. I think it can be healthy to compete with your father as it can give you some motivation boost, but make sure you know, deep down, that everyone follows their own personal and professional path, and don't let that competition stand in the way of being happy and fulfilled with yourself and youw own accomplishments :)
Good luck in your practice, Rahul!
@@CraftingCases Thank you so much for your advice and comments, it means a lot!
I am definitely going to keep practicing brainstorming, I think i am able to think of the right things, but I need to be able to follow those thoughts through to coherent and structured points, which I believe is a mixture of practice and diligence - I will give it my absolute best shot!
Thank you for the offer to help with finding me a trusted coach - I might actually take you up on that offer based on how the next couple of days go prep wise if that is still an option? I think a big thing that I lack is confidence, and if anything an external coach critiquing me could be a massive confidence boost and help me have a bit more conviction.
I really appreciate your advice regarding balancing my competitiveness and ambition with an understanding that external benchmarks are useful in healthy doses - I know this but sometimes struggle to always follow this!!
Once again thank you for your guidance and resources you have offered for us, it has not only helped me a lot, but made this entire prepping process far more enjoyable! I can see this as a way of thinking and operating that I would fit well with and enjoy developing, which I don't think would have been the case with just the random panic of looking at every resource which tells you a strict way of how to do things to pass the interview.
Best Regards
-Rahul
Heyy@@rahuliyengar6908 how did your interview go?
First
How did we get $6/month?
$80/year divided by 12 months
2 hours a day with an average 50mph is a long commute-- without traffic the time makes sense, but average MPH needs to be cut in half. Also, the assumptions on how many cars per household and people don't think about the cost of pads as it is nominal shows the bias of being middle + class.
This is definitely not a beginner market sizing example
Bruno has aged.
The ’simplification’ to $/axle was completely unnecessary, and I wouldve been embarassed by that as the interviewer (just use 20$ for pad, ffs) Also estimating miles driven in a year per car was way too complicated. You should do this in a much more simple way. Assumption for size of household was imo too much in the wrong, you can absolutely just use decimal numbers here. Also active cars/household seems too high on average, JUST USE DECIMALS, its simple multiplication. In addition, it seems the ’consumer vehicles only’ was pretty much forgotten throughout the interview. I would not be impressed by this candidate in all honesty.