Market study and industry analysis
Understanding an industry by mapping customers, players, the value chain, and trends, sizing it, and forming a clear point of view.
Key takeaways
- Start from the client's decision, map customers, players, value chain, and trends, size the market, and lead with the single most important trend and its so-what.
- Market studies often sit inside a larger entry, investment, or due diligence case.
- The strong answer organizes and takes a view linked to the decision. The weak one is a data dump that leaves the listener with no conclusion.
What this case type is and when it shows up
A market study case asks you to understand an industry, often as the first part of a bigger decision such as entry or investment. The trap is producing an unstructured pile of facts. The win is a clean map, a sized market, and a clear point of view about where the industry is going and what it means for the client.
The underlying theory, in plain language
Map an industry on four lenses: who the customers are and what they want, who the players are and how they compete, how the value chain works (who does what, and who earns the profit), and what trends are reshaping it.
Porter's Five Forces is a common check on how attractive an industry is: the power of buyers, the power of suppliers, rivalry between competitors, the threat of new entrants, and the threat of substitutes. Tie each force to a real implication rather than listing all five.
Then take a position. The value of a study is not the facts but the so-what: which trend matters most, who is winning and why, and what that means for the client's decision.
What the prompts sound like, from simple to hard
- Simple: describe the specialty coffee industry in the Gulf.
- Medium: assess India's electric two-wheeler industry for a supplier thinking of entering.
- Hard: judge where European grocery retail will be in five years and who will win.
Finding and narrowing the real problem
Key idea
Start from the client's decision, map customers, players, value chain, and trends, size the market, and lead with the single most important trend and its so-what.
Frameworks for this type, each as a thinking tool with its limit
- Customers, players, value chain, trends: Four clean lenses to map any industry. Limit: A map is not a view; you still must say what matters most.
- Porter's Five Forces: Buyers, suppliers, rivals, new entrants, and substitutes, to judge attractiveness. Limit: Easy to recite shallowly; tie each force to a real implication.
Methods for solving this type
- Clarify the client's decision
- Size the market and its growth
- Map players and how share is moving
- Identify the key trend and its so-what for the client
The math patterns it relies on
- Market size = units x price
- Growth multiple and yearly growth rate
- Share by player group and how it is changing
| Player group | Share two years ago (%) | Share this year (%) |
|---|---|---|
| Electric-only start-ups | 60 | 45 |
| Established two-wheeler makers | 35 | 50 |
| Others | 5 | 5 |
So-what
Established makers took 15 points of share in two years. Buyers appear to value their dealer and service networks, so winning now depends on distribution and after-sales service, not only on the product.
Worked cases
Worked case
India's electric two-wheeler industry, for a battery maker
The prompt
A European battery maker is thinking of supplying India's electric two-wheeler (scooter and motorbike) industry and asks for your view of it. The interviewer gives these illustrative figures: about 18 million two-wheelers are sold in India each year, 6 percent of them electric, at an average electric price of INR 110,000. The electric share is expected to reach 15 percent in five years, with total two-wheeler sales flat. The share table above shows how the players are doing.
Interviewer-led: the interviewer gives the figures and the share table, then asks for the market size, the client's slice, and your view of who is winning.
Clarifying questions, with the interviewer's answers
- What decision does the client face?Answer: Whether to build a battery-pack plant in India to supply two-wheeler makers.
- How large is the battery in the vehicle's cost?Answer: Assume about 40 percent of the selling price.
A hypothesis to say out loud: Electric two-wheelers are growing fast from a small base. My hypothesis is that the market is attractive for a battery supplier, and the key question is which makers will win, because a supplier's success follows its customers.
The structure
- Size, growth, players, and the so-what for the client
- Market size today and in five years
- Battery spend (the client's share of the value chain)
- Key: Who is winning, and why
Working it through
1. Electric units today
6 percent of 18 million.
Electric units a year:18,000,000 × 0.06 = 1,080,0002. Market value today
Units times the average price: about INR 119 billion.
Market value (INR a year):1,080,000 × 110,000 = 118,800,000,0003. The same in crore
Indian business figures are often in crore (1 crore is 10 million).
Market value (INR crore a year):118,800,000,000 ÷ 10,000,000 = 11,8804. Battery spend today
About 40 percent of the price is the battery, the part of the value chain the client would supply.
Battery spend (INR a year):1,080,000 × 110,000 × 0.4 = 47,520,000,0005. Units in five years
15 percent of a flat 18 million.
Electric units in 5 years:18,000,000 × 0.15 = 2,700,0006. Growth multiple
Units grow 2.5 times in five years, about 20 percent a year (1.2 multiplied five times is about 2.5).
Growth multiple:2,700,000 ÷ 1,080,000 = 2.57. Read the share table
Established makers rose from 35 to 50 percent in two years while start-ups fell from 60 to 45 percent.
Share gained by established makers (points):50 - 35 = 15
The recommendation
The industry is attractive for a battery supplier, and the client should aim at the established two-wheeler makers. First, it is about 1.1 million electric units a year worth about INR 119 billion, of which batteries are about INR 47.5 billion. Second, units are expected to grow about 2.5 times in five years, roughly 20 percent a year. Third, established makers are taking share from start-ups, 15 points in two years, most likely because buyers value dealer and service networks, so they are becoming the winners; expect them to demand low prices and local production. Next, interview the purchasing heads of the top three established makers.
Risks: The 15 percent electric share depends on battery costs and government support, which can change; Established makers may build their own battery packs.
Next steps: Interview purchasing heads at the three largest established makers; Compare local battery costs with imported packs.
A strong candidate
Sized the market and the client's slice of it, read the share trend, and turned it into a clear view on which customers to target.
A weak candidate
Listed facts about every player, subsidies, and technologies with no size, no trend, and no point of view.
Worked case
Brazil's dog-food market, for a European premium brand
The prompt
A European premium dog-food maker asks you to describe Brazil's dog-food market and say whether it should enter, and in which part of the market it should compete.
Candidate-led: you choose the lenses (customers, players, value chain, trends), ask for the numbers, and give a point of view; the interviewer answers what you ask. The interviewer's figures are rounded and illustrative.
Clarifying questions, with the interviewer's answers
- What decision is behind the question?Answer: A European maker of premium dog food wants to know whether Brazil is worth entering, and in which part of the market.
- Dogs only, or cats too?Answer: Dogs only, for now.
- Should I size by value or volume?Answer: Both, in Brazilian reais (BRL) for this year.
A hypothesis to say out loud: Brazil has one of the world's largest dog populations, and many dogs still eat home-cooked food. My hypothesis is that the market is large and still shifting to commercial food, and that the premium segment is growing fastest, which suits the client.
The structure
- Size, segments, trends, and the so-what for a premium brand
- Size: dogs x share fed commercial food x kg x price
- Key: Segments: premium versus economy, by volume and value
- Trends: move to commercial food, premium growth, online and pet-shop channels
Working it through
1. Dogs fed commercial food
Candidate: "How many dogs, and how many eat bought food?" Interviewer: "About 55 million dogs; about half eat mostly commercial food."
Dogs fed commercial food:55,000,000 × 0.5 = 27,500,0002. Volume
Interviewer: "A dog eats about 100 kg of commercial food a year on average."
Volume (kg a year):55,000,000 × 0.5 × 100 = 2,750,000,0003. Value
Candidate: "What is the average price?" Interviewer: "About BRL 12 per kg across all segments." Candidate: "So the market is worth about BRL 33 billion a year."
Market value (BRL a year):55,000,000 × 0.5 × 100 × 12 = 33,000,000,0004. Premium share of value
Interviewer: "Premium food is 20 percent of volume at about BRL 30 per kg; the rest averages BRL 7.50." Candidate: "Then premium is a fifth of volume but half of value."
Premium share of value (%):0.2 × 30 ÷ (0.2 × 30 + 0.8 × 7.5) × 100 = 505. Premium growth
Candidate: "Where are the shares heading?" Interviewer: "In five years, about 60 percent of dogs may eat commercial food, and premium may be 30 percent of volume." Candidate: "Premium volume would grow about 1.8 times, with the dog population flat."
Premium volume growth multiple in 5 years:(0.6 × 0.3) ÷ (0.5 × 0.2) = 1.86. Channel shift
Candidate: "Where do owners buy premium food?" Interviewer: "Mostly pet-shop chains, but online grew from 10 to 25 percent of premium sales in three years."
Online share gain (points):25 - 10 = 15
The recommendation
Brazil is attractive for the client, but only in the premium segment and through pet-shop chains and online. First, the dog-food market is about BRL 33 billion a year, and premium food is already half of that value while being only a fifth of the volume. Second, premium volume could grow about 1.8 times in five years as more dogs move to commercial food and owners switch to more expensive food. Third, the channels are shifting: online rose 15 points to a quarter of premium sales in three years, which lowers the cost of reaching owners for a new brand. The next step is to size the costs of importing versus producing locally and to talk to the two largest pet-shop chains.
Risks: A weaker real would make imported premium food more expensive; Local premium brands may already hold the pet-shop shelves; The 60 percent commercial-food figure depends on household incomes rising.
Next steps: Compare the cost of importing with local contract manufacturing; Interview buyers at the two largest pet-shop chains and one online retailer; Check current import and labeling rules for pet food with local advisers.
A strong candidate
Started from the client's decision, sized the market by value and volume, split premium from economy, and turned the trends into a clear view on where to compete.
A weak candidate
Described Brazil's economy and every pet-food brand in detail, gave no size, and ended with "it is a big market with potential."
Prompt: "Tell me about this industry."
Weaker answer
Recites facts about every player and trend with no structure, no numbers, and no so-what.
Stronger answer
Starts from the client's decision, sizes the market and the battery slice, reads the share shift to established makers, and says which customers to target.
Why the stronger answer wins: The strong answer organizes and takes a view linked to the decision. The weak one is a data dump that leaves the listener with no conclusion.
Common mistakes, traps, and curveballs
- A data dump with no point of view
- Describing every player equally instead of finding who is winning
- Missing the trend that is reshaping the industry
- Confusing a big industry with an attractive one
- Forgetting the client's decision
Market studies often sit inside a larger entry, investment, or due diligence case. The interviewer is usually checking whether you can absorb a lot of information and still lead with a clear point of view. Formats differ by office and change over time, so check the current process for your target office.
Practice
A country has 50 million households. 20 percent buy a product once a year at EUR 30. What is the market size, in EUR a year?
About 7 million dogs in Japan eat commercial food, about 60 kg each a year, at an average of JPY 1,000 per kg. What is the market, in JPY billions a year?
A Gulf market was worth AED 2.0 billion four years ago and AED 2.9 billion today. Test a growth rate of 10 percent a year: what would AED 2.0 billion become in four years, in AED billions?
After mapping an industry, what should you lead with?
A player group's share fell from 60 to 45 percent while the whole market doubled. What happened to its sales?
You have described all five of Porter's forces, one sentence each. What is usually missing?
A market study is only as good as its point of view: size it, find who is winning and why, and say what it means for the client.
Sources for this lesson (1)
- Recognized public explanations of case-interview concepts and frameworks
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