The case interviews at top consulting firms like McKinsey, BCG, or Bain can be daunting, especially when confronted with market sizing questions that test your analytical skills. These questions often require you to make educated estimates about various markets, from takeaway coffee to the value of wedding services in the UK, with no direct data at your disposal. Understanding these two primary types of market sizing questions—estimating market value and calculating potential consumer numbers—will not only sharpen your problem-solving abilities but also prepare you well for the challenges ahead in your consulting journey.
Market Sizing Case Interview
If you’re preparing for a case interview at McKinsey, BCG, Bain, or another top consulting firm, you can expect to face a market sizing question.
This could be something like “What’s the market size for take-away coffee in this country?” or “How many bottles of wine are sold in the U.S. every year?” Market sizing questions are typically asked at the beginning of consulting case interviews. They require you to perform rough calculations in order to estimate the size of a particular market without having any data available.
There are two types of market sizing questions:
- Most commonly, you’ll be asked to estimate the value of a market – that is, to calculate its annual revenue.
- The market could be anything, from soft drinks to ping pong balls, and you’ll need to give an estimate of its annual worth.
Examples of market sizing questions include:
- Estimate the market size for sofas in the UK.
- How many bottles of wine are sold in the US every year?
- Estimate the size of the European shoe market.
- What is the market size for cars in the USA?
- How big is the golf club market in New York?
For market sizing:
- Calculate the market size for weddings in the UK: Segment population and estimate % of each that will marry in a given year, thus finding the total people getting married in the UK.
- Estimate cost per wedding by estimating host spend and guest spend and adding them together.
- Multiply total spend per wedding by the total number of weddings to find the market size.
- Total number of weddings in the UK each year: 750K weddings per year in a population of 70 million.
Market sizing is the process of estimating the annual spending of a particular category of product. It represents the maximum revenue a product could generate if it captured 100% market share. It is a type of estimation or guesstimate question. For business, market sizing is a critical step in strategic planning to enable businesses to make informed decisions on product development, pricing, marketing strategies, and resource allocation.
In consulting interviews, market sizing questions assess several key skills and qualities, including:
- Analytical thinking: Market sizing questions require candidates to break down complex problems into manageable components and use logical reasoning to arrive at a solution.
- Problem solving.
- Quantitative skills.
There are five steps to solve any market sizing or estimation question:
- Ask clarifying questions. When given a market sizing question, make sure you fully understand what you are being asked to calculate or estimate.
- Develop a market sizing approach or framework. This will help you avoid making unnecessary calculations and prevent math calculation mistakes.
- There are two market sizing approaches:
- Top-down approach: Start with a large number and then refine and break down the number.
- Bottom-up approach: Start with a small number and then build up and increase the number.
- Once you have your market sizing approach or framework, the rest of the market sizing case is simple arithmetic.
- It is almost always better to use simple, round numbers in your market sizing calculations, than to use numbers that are too precise and complicated.
Example market size calculation: Let’s say you have 500,000 target customers. That means: 500,000 (number of target users) x 4 (purchases expected over 12 months) = 2 million a year. This means your market volume is 2 million a year.
When sizing a market, what should be the first question asked? #1: Clarify The Unit Of Measurement (Volume Or Value). First, check with your interviewer if the measure to be estimated is defined as a market volume (for instance, the number of units sold in a year) or as a market value (for instance, the market size in US dollars).
Market Sizing questions are common inside of McKinsey cases; you’ll rarely see this as a standalone case, but many longer cases will include a market sizing question as one component.
BCG Case Interview Techniques
Case interviews are a key step in the interview process for client-facing roles, simulating real-world client problems. The BCG case interview is a test to evaluate applicants’ problem-solving and communication skills. The interview simulates a situation with a client asking you to address a particular issue they have. During this conversation, you must:
- Structure an approach to solve the client’s problem.
- Ask questions to gather data and information.
- Derive insights from charts.
- Answer quantitative questions.
- Generate ideas or hypotheses.
- Communicate your thoughts in a clear, professional, and concise manner.
Interviewers assess your ability to identify all the relevant components of a problem, to organize these components in a MECE way, and to explain clearly how each of these components helps solve the overall problem. They also assess your ability to prioritize the issues to analyze, demonstrating your 80/20 thinking, and your ability to transform data into insights.
In contrast to McKinsey case interviews, the BCG case interview requires you to independently drive the case and move through the various layers of analysis. This means you are in the driver’s seat. Before landing a full-time offer, you must pass four to six case interviews. Each case interview is eliminatory and can lead to a 2-year ban.
Preparing for a BCG case interview can be a daunting task. You can find a comprehensive preparation plan with three mandatory phases:
- Discovery: Understanding the landscape and the rules of the game.
- Practice: Practice case interviews and turn your knowledge into skills.
- Mastery: Get feedback to fine-tune your skills.
Start early, ditch the memorized frameworks, develop consistent routines, build your business sense, seek qualitative feedback, and practice with those who’ve been in your shoes. Preparing for a case interview isn’t something you can cram into a week; it’s a marathon, not a sprint.
Learning frameworks by heart stifles your creativity and limits your adaptability. Real-world cases are complex and varied; a one-size-fits-all approach won’t cut it. Memorized frameworks can actually hurt your chances of success by making you seem robotic and unoriginal.
Demystify case interviews with our prep quizzes and top BCG tips to succeed. This is the complete guide to boosting your BCG case interview prep in 2023. You can prepare for your BCG interviews by running mock interviews and answering typical interview questions for the role you are applying for. Familiarize yourself with case interview techniques and practice solving business cases under time constraints.
Developing the BCG case interview framework is one of the most important parts of the BCG case. By providing a strong framework, you show the interviewer that you can take a problem, identify the key areas that may be relevant, and suggest potential solutions.
Case Interview Preparation Strategies
Case interviews are a common way for employers to assess your problem-solving, analytical, and communication skills. They involve presenting you with a realistic business scenario and asking you to propose a solution based on your logic, creativity, and data. Acing a case interview can be challenging, but not impossible.
Here are some top strategies to help you prepare and perform well:
- Thorough preparation: Understanding the company’s business model, culture, and industry trends can significantly enhance your performance. Research is crucial as it helps you tailor your approach to company-specific challenges and opportunities.
- Deep dive into the company: Explore the company’s website, recent press releases, and news articles to understand its goals, challenges, and industry position.
- Study industry trends: Familiarize yourself with the latest industry trends and benchmarks, which will help you make more informed suggestions during your case solutions.
- Practice: Practicing is fundamental when learning how to prepare for a case study interview. It hones your analytical skills and refines your problem-solving process.
- Start with sample cases: Begin by tackling sample case studies that reflect the types of problems you might face in your interview. Many consulting firms and business schools provide these on their websites.
- Simulate real conditions: Time yourself to get used to the pressure of thinking and responding quickly, helping you manage time effectively during the actual interview.
Developing various problem-solving frameworks provides clear methodologies for analyzing business situations so you can systematically cover all necessary aspects of the problem. Some of these frameworks include:
- SWOT analysis
- Porter’s Five Forces
- 4Ps of marketing
Utilizing these frameworks will help you assess the strategic position and business problems effectively.
Integrating tools like ClickUp significantly assists you in streamlining your research process for case study interviews. With ClickUp Docs, you can enhance how to prepare for a case study interview by organizing your notes, frameworks, and insights in one centralized location. You can also create dedicated docs for each company and industry you’re studying and use templates to maintain a consistent structure for easy reference.
Effective case interview preparation strategies include:
- Knowing the types of cases (e.g., profitability, market entry, pricing, growth, mergers and acquisitions).
- Practicing with peers or mentors.
- Structuring your thinking and communication.
- Being flexible and creative.
- Showing your personality and enthusiasm.
- Practicing active listening during the interview.
- Asking for feedback from others.
- Recording yourself to identify areas for improvement.
- Timing your answers to demonstrate speed and accuracy.
Start preparing early. Mastering case interviews takes time, and consistent practice and review are essential. Learn the right strategies the first time; it is much more effective than having to relearn or correct bad habits later.
Practice with high-quality cases. After learning the right strategies, practicing case interviews with high-quality cases ensures that you are exposed to realistic scenarios and can develop your problem-solving skills effectively.
A comprehensive case interview guide will break down everything you need to know about the case interview process, outlining exactly what you need to do to prepare effectively and ace the case. This includes essential strategies, frameworks, problem-solving techniques, and tips. For more information, check out this guide.
