At first glance, market sizing questions are often the most intimidating questions that people come across during the interview process. After all, most interviewees have come across the types of business problems in the news or in class, but no one really thinks about wacky questions like ‘how many pancakes were eaten in New York last week?’ Even on the more ‘normal’ side – market sizing questions within normal case questions – interviewees often freeze up at the thought of tackling this ambiguous estimation question.

The 3 Steps

You have probably heard that there is ‘no right answer’ to these questions, and that’s probably right. But there’s definitely a right way to approach these problems, which is with structure.

1) Take a minute and structure your answer

After interviewing a lot of juniors going through the case interview process for the first time, I realized something peculiar: almost everyone took a minute to structure the problem before a ‘normal’ case, but almost no one took the time to structure the problem when a case question came up (either one within a normal case question or a standalone question).

This minute is critical in helping you break down the variables and refine the process, the next steps in helping you get the final answer.

2) Break down the variables

It may be helpful to review the purpose of the market sizing question, which is to see whether or not you can break down and explain a seemingly complex concept in a simple way. You know your end goal (the case question), so you want to work backwards and use a straightforward approach to break down the relevant variables, which will be a mix of assumptions/commonly known assumptions and variables that you have to calculate from these assumptions.

Pancake Example

Blue is a number you assume/know, green is a number you calculate

Goal: You want to figure out the number of pancakes eaten in New York last week

Number of pancakes eaten last week = Number of pancakes eaten per day x Days per week (7)

Number of pancakes eaten per day = Number of people who eat pancakes x Pancakes per person (3)

Number of people who eat pancakes = Number of people who eat breakfast x % of people who eat pancakes (0.20)

Number of people who eat breakfast = % of people who eat breakfast (0.80) x # of people in New York (10 million)

As you see, working backwards in a methodical way can lead you to a set of straightforward calculations. Throughout the process, you will be using a mix of variables you estimate/know and variables that you calculate from the step before. Obviously you want to present the structure in the ‘forward’ manner, as shown below.

Sample dialogue:

So our goal is to figure out to the total number of pancakes eaten last week, and here’s how I’m going to break it down: first we’ll start with the population of New York, then we’ll figure out the number of people who eat pancakes, and then after considering how many they eat a day and the 7 days per week, we’ll be able to get the final answer. How does that sound?

3) Refine the process

In part 2, you have the basic foundation to get you through the market sizing question. To really stand out, you want to refine the process by segmenting variables. This step both allows you to get more accurate estimations as well as to show off your creativity. This step is more of an art than science, since it depends a lot on the category of your case question.

Pancake Example

Number of pancakes eaten last week = Number of pancakes eaten per day x Days per week (7)

Refined-> Have a separate calculation for weekdays and weekends (brunch heavy days)

Number of people who eat pancakes = Number of people who eat breakfast x % of people who eat pancakes (0.20)

Refined-> Have separate calculations for different types of people, such as kids, adults (eat the least amount of pancakes by %), and elderly (eat the most by %).

Why do I think structure is so important? During one of my Bain interviews, I laid out my structure, did one of the initial calculations, and then my interviewer stopped me and said I was done. He saw what he needed – a structured approach, and the ability to do basic calculations. Obviously, we can’t help you with the latter

case interview frameworks · consulting interview frameworks · crack the case · market size estimation · Market Sizing · market sizing question

Note: By frameworks we mean memorized ways of addressing specific business scenarios.

Many casebooks will often include a ton of frameworks to memorize for the case interview, whether it’s “Top 12 Business Scenarios,” the 7 Q’s, the 5 D’s, etc. I think that these frameworks might be useful to read (especially if you have no business experience whatsoever), but at the end of the day, trying to do crack the case by memorizing a set of frameworks is wrong for several reasons:

1)     It may misguide you

When you memorize a lot of frameworks, it is easy to become myopic and even overconfident. (more…)

case interview frameworks · consulting frameworks · consulting interview frameworks · management consulting frameworks · porter's five forces