accilium Case: School Bus Innovation

Further info on product:
The device transmits location and ETA info to schools and parents/legal guardians. Parents, bus drivers, and school administrators access transmitted data and messages via a proprietary phone/tablet application.

Our client will generate revenues by initial sales of the devices and technology service plans.

• Life span: The product would have a 5-year life span
• Inhabitants: 8,8 Mio (AUT) | 83,2 Mio (GER) / Number of states: 9 (AUT) | 16 (GER)
• Price per unit: 200€
• Units per bus: 2 to size the market | Average bus ~ 55 seats

Possible solutions: 

For structuring the problem, SWOT analysis would be a viable approach:

• short-term/long-term
• focus on Market, Competition, Customers, Risks, Strategic alternatives, Stakeholders

For market sizing, Candidates should begin market-sizing by verbalizing their formula/approach to size the market. For each variable laid out, candidates should verbalize what information would be needed to solve for that variable (i.e. sometimes there will be multiple layers) and then confirm that the approach is reasonable to the interviewer. The candidate should then ask for the relevant info as they tackle each variable in solving the market-sizing problem. As a result, there should be a plausible addressable year 1 market size.

For the solution, see below the attached "Part 1 solution".

Market Sizing (already given but summarized):

• Germany:
  • Total inhabitants: 83.2 million
  • School children: 8.38 million
  • Primary school children (age 6-10): 2.82 million
  • Number of primary schools: 15,000
  • Number of school buses: 51,273
• Austria:
  • Total inhabitants: 8.8 million
  • School children: 1.14 million
  • Primary school children (age 6-10): 350,000
  • Number of primary schools: 3,000
  • Number of school buses: 6,250

Solution indication:

• Germany:
  • Price per device: €200
  • Total Market Size: 15,000 primary schools + 51,273 school busses
  • Assumptions:
    1. New product on the market with no competition
    2. General need for product not evaluated
    3. Sales for 1 year highly dependent on cooperations with government/schools and given discounts
  • Total Sales:
    1. Taken into account above assumptions a market share of 10 % could be achieved
    2. 1,500 primary schools + 5,127 busses = 1,325,400 EUR Sales in first year
• Austria:
  • Price per device: €200
  • Total Market Size: 3,000 primary schools + 6,250 school busses
  • Assumptions:
    1. New product on the market with no competition
    2. General need for product not evaluated
    3. Sales for 1 year highly dependent on cooperations with government/schools and given discounts
  • Total Sales:
    1. Taken into account above assumptions a market share of 10 % could be achieved
    2. 300 primary schools + 625 busses = 185.000 EUR Sales in first year

• Here the key is to remember that the product has a 5-year life span, so any school purchasing the device in years 1-4 would be “out” of the market in year 5
• If they ask, candidates can assume that the overall market will not grow
• Year 5 revenues = (Potential year 1 market size –year 1 revenues –year 2 revenues –year 3 revenues –year 4 revenues) * year

Push the candidate to brainstorm.

Some examples might include commercial freight, shipping, public transportation, flight, cruise ships, rescue boats, tour buses, drone fleets, etc.