Case Studies

The method, every time

• ▹Clarify the question. What is being sized (revenue, units, users), where (UK, US, global), and over what period. Get this wrong and the rest is wasted.
• ▹Pick an approach. Top-down starts from a big number and filters down (population, then penetration, then spend). Bottom-up builds from units (stores, customers, sales per day). State which you are using and why.
• ▹Build the equation out loud. Write it as a tree: Population, then % in the target group, then % who buy, then frequency, then price. Interviewers want to see the structure before any numbers.
• ▹Estimate each branch with an anchor. Use a round number you can defend (UK population is about 67 million, average household about 2.4 people). It is fine to be within 20%.
• ▹Sanity check at the end. Does the answer feel right? Compare it to a known benchmark (is the UK coffee market bigger than £5bn? it should be). State whether you think you are high or low and why.

Key facts worth memorising

• ▹UK population is roughly 67 million, US about 335 million, EU around 450 million, world about 8 billion.
• ▹Average UK household is about 2.4 people, US about 2.5. Useful for consumer-market sizing.
• ▹UK median full-time salary is around £33,000, US around $60,000. Good anchors for discretionary spend.
• ▹A standard replacement cycle: phones 2 to 3 years, cars 8 to 12 years, laptops 4 to 5 years. Check the case assumptions.
• ▹Working-age share is roughly 60% of the population. Retired about 20%. Under-18 about 20%.

Common mistakes

• ▹Going straight to numbers with no structure. The framework is half the marks.
• ▹Using too many decimal places. Round to one significant figure and keep the maths clean.
• ▹Forgetting the sanity check. An answer 100x too big with no comment looks worse than a slightly off one you flagged.
• ▹Not stating assumptions. Say 'I am assuming 40% of households own a coffee machine' so the interviewer can correct you.

Worked example: size the UK coffee shop market

• ▹Population 67m. Adults who drink coffee out of home: say 50% = 33.5m.
• ▹Frequency: average 2 visits a week = 104 visits a year per person.
• ▹Total visits: 33.5m x 104 = about 3.5 billion visits a year.
• ▹Spend per visit: average £4. Total market about £14 billion.
• ▹Sanity check: that feels plausible for a country that loves coffee. The real figure is in that ballpark, so the method held up.