Quantitative
Market sizing
Estimating how big a market or quantity is.
Last reviewedWhat does Market sizing mean?
Market sizing means estimating a number you cannot look up, such as how many umbrellas sell in a city each year, by building it up from sensible assumptions. You can work top-down (start big and narrow) or bottom-up (start small and scale up), and you always sanity-check the result. State the region and time period first, because the answer depends on them.
Where does it come up in case interview prep?
- Cracking any estimation promptLesson in Guesstimates and market sizing
- Sizing drillsLesson in Guesstimates and market sizing
- Estimating anything from almost nothingLesson in Market sizing and estimation
- Hotel and travel players, trends, and how to crack the casesLesson in Hotels and travel
- Market study and industry analysisLesson
- Luxury players, markets, trends, and how to crack the casesLesson in Luxury and fashion
- Education players, trends, and how to crack the casesLesson in Education and edtech
- Government and economic developmentLesson
Related terms
- Top-down sizingStart from a big total and narrow it down.
- Bottom-up sizingStart from a small unit and scale it up.
- TAM, SAM and SOMTotal market, the part you can serve, and the part you can win.
- ExhibitA chart or table the interviewer hands you to reason from.
- Percent versus percentage pointsA change in a rate is measured in points; its relative change in percent.
- CAGR (compound annual growth rate)The steady yearly growth rate that links a start value to an end value.
- Rule of 72Years to double is about 72 divided by the growth rate.
- Weighted averageAn average where each part counts in proportion to its size.