Dear all,
I kindly would like to learn your approach on how to solve “what is the size of the second hand car market in the US?” and the drivers for it.
Thank you.
Dear all,
I kindly would like to learn your approach on how to solve “what is the size of the second hand car market in the US?” and the drivers for it.
Thank you.
Define the market scope: Clarify whether you are referring to the entire second-hand car market or a specific segment, such as passenger cars or commercial vehicles.
Identify key variables:
Calculate the size of the second-hand car market:
Consider drivers and influencing factors:
Remember, market sizing is an estimation based on available data and assumptions. It's important to validate your estimates with industry reports, market research, and expert opinions to ensure reasonableness. Good luck with your analysis!
Hi there,
You'll learn a lot more from this by trying it out yourself first! Why don't you post your approach here and we can provide commentary?
How to approach market sizing
It's very simple: Do the approach the is the easiest for you given the question.
Are they asking you to estimate something where you don't even know where to begin from the top (maybe you have 0 clue as to the market size of the industry, the GDP of that country, etc. etc.)? Then do bottom-up!
Alternatively, does it seem impossible to do a realistic from-the-ground-up estimation of something (perhaps it requires just far too many steps and assumptions)? Then do top-down!
Fundamentally, you need to take the approach that just makes the most sense in that circumstance. Quickly think about the key assumptions / numbers required and whether you 1) Know them or 2) Can reasonably estimate them. If you can, go ahead!
An Example
He's a Q&A for a great market sizing question here asking to estimate # of electric charging stations in a city in 10 years:
This one could be answered top-down (as I did) by estimating population of the city, # of drivers/ cars, etc. etc.
OR, it could be answered bottom-up by estimating # of stations you see per block (or # of gas/petrol tanks), % increase this might be over time (or # of EV stations that would be needed per gas tank given EV stations take 10 times as long), and # of blocks you'd estimate the city to have.
Take a look here for additional practice! https://www.preplounge.com/en/management-consulting-cases/brain-teaser/intermediate/taxis-in-manhattan-market-sizing-229
Hello!
I would always recommend you to give it a shot and then post it here, this would help you the most.
Given that market sizing cases were the topic of many questions in this Forum, I developped a market sizing case, that you can find for free in PrepL´s library
https://www.preplounge.com/en/management-consulting-cases/candidate-led-usual-style/intermediate/market-sizing-new-startup-launch-baby-strollers-in-the-us-244
Furthermore, you can find a detailed market sizing (a complex one integrated into a case) in my latest case:
Swiss manufacturer market assessment, profitability and scenarios: https://www.preplounge.com/en/management-consulting-cases/candidate-led-usual-style/advanced/swiss-coffins-the-death-business-245
Let me know if you have any doubts with it, it contains a detailed explanation and methodology about how to solve this specific example, but you can extrapolate to many other market sizings!
There are many alternative ways to solve this. And you improve much more by trying by yourself than by just reading answers.
I suggest you give it a try and then we can comment and suggest improvement opportunities.
However, I don't want to leave you without even giving a hint. I suggest you consider: