Bain Question - Business Case Sample

Question

Hi!

I would appreciate if someone could help me with this question. (it's from a Bain sample case)

I've attached the chart (which has all the info needed) and the question.

The answer is 20% but I can not come up with that number! if anyone could give me a hint..

Thanks!!!

Answer 1

0.6/(0.2+0.3+0.4+0.5+0.6+1)

Answer 2

Here's my guess and I'm not sure if this actually makes sense. RMS = MS_company / MS_nice_travel for each company. Then RMS * MS_nice_travel = MS_company for each company. We can take MS_travel_co divided by the sum of RMS * MS_nice_travel for each company. You can organize like this:

MS_travel_co = (0.6 * MS_nice_travel) ÷ ((0.2 + 0.3 + 0.4 + 0.6 + 1) * MS_nice_travel)

This answer calculates to 0.24

Answer 3

The step by step approach is by referring to the ratios given.

Travelco/Nice = 0.6

Nice/Travelco = 1.7

Super/Nice = 0.3

Flamingo/Nice = 0.4

Cool/Nice = 0.2

Then, from the x axis, we know Nice + Super + Travelco + Flamingo + Cool = 150.

Just by doing math manipulations, we can obtain Nice = 60; then Travelco is 0.6 X Nice, which is 36. Finally, Travelco market share = 36/150 = 24%.

Btw, may I know where I can get the this full case? I looks interesting. :)

Answer 4

To the answers received so far: what's the number 1 you are adding in the denominator?

Answer 5

Express every individual company market share as a function of NiceTravel’s market share (using RMS), then setup an equation to solve for Nice Travels market share (40%). From there onwards, use the expression for Travel Co market share relative to Nice Travel to solve for Travel Co market share.

M.tc=0.6M.nt

Thus M.tc=0.6x40% = 24%