More Information: https://flevy.com/browse/business-document/building-a-market-model-and-market-sizing-376 DOCUMENT DESCRIPTION A key choice in any business strategy is 'where to play'. This understanding the market that the business chooses to compete in with a clear understanding of key customer, geographies, products, growth, value, competitors and shares etc. A fundamental requirement for any market assessment is the ability to 'size' the market to help a business understand and make choices on the dynamics and drivers mentioned before. Market sizing is an art - being a mixture of hard data and subjective inputs and having a clear methodology is an essential requirement to ensure these elements are managed correctly. This powerpoint document is a Market Sizing 101 for those interested in developing a basic framework and methodology to build their skills upon. Got a question about this presentation? Email us at support@flevy.com.

1. Building a Market Model and
Market Sizing

2. 1. Objectives of Market Sizing
2. Approach to Market Sizing
3. Drawing conclusions from Market Sizing
CONTENTS
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3. Step1. Gather available sources
2. APPROACH TO MARKET SIZING
Industry Report
Competitor
Data
Client Data
General Sources
• AC Nielsen / Aztec
• IBIS / BIS Shrapnel /
Freedonia / Market
Research etc
• Broker report
• Industry Association
• Press Release
• Competitor Annual
Report
• Websites
• Yellow pages
• Client Financial
• Internal Study
• Customer survey
Interviews
Interviews are essential for gathering and validating data
• Experts
• Industry Association
• Ex- exployees • Marketing
• Field sales
• Workshop
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4. Step2. Decide the relevant details
2. APPROACH TO MARKET SIZING
B. Time Period
• Historical
• Forecast
C. Data detail required
• Market Volume
• Market Retail Sales Value (RSV)
• Market Wholesale Value (NSV)
• Market Profit (GM, EBIT, EBITDA)
Review point
• Strategic view
• MECE
• Large volume or value
• Fast growing
• Relative strength
• M&A target
• Data availability
A. Relevant Segments
• Product (Category)
• Channel
• Customer
• Geography
• Player
Segments must meet certain fundamental requirements: relevance, measurability,
accessibility, substantiality and durability.
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5. B. Time Period
• Historical
• Forecast
C. Data detail required
• Market Volume
• Market Retail Sales Value (RSV)
• Market Wholesale Value (NSV)
• Market Profit (GM, EBIT, EBITDA)
• Data availability
• Internal request
“Profit pools” are ultimately where business derive value
A. Relevant Segments
• Product (Category)
• Channel
• Customer
• Geography
• Player
Step2. Decide the relevant details
2. APPROACH TO MARKET SIZING
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6. NC% &
Total Market
NC
Total Market
Value (NSV)
Retailer
Margin
X
G&P AC Nielsen
XYZ Financial
Volume divided by
1
AC Nielsen 2 X 3
AC Nielsen RSV$/L
vs. XYZ NSV$/L
XYZ Financial NSV
4 X (1 – 5 )
XYZ Financial
Interviews
IC
AC Nielsen
Interviews
Market research
XYZ Financial
Volume divided by
1
AC Nielsen
XYZ NSV$/L applied
by Retailer Margin
2 X 3
AC Nielsen RSV$/L
vs. XYZ NSV$/L
Interviews
XYZ Financial NSV
4 X (1 – 5 )
XYZ Financial
Interviews
Licens
ed
AC Nielsen
Interviews
Market research
XYZ Financial
Volume divided by
1
AC Nielsen
XYZ NSV$/L applied
by Retailer Margin
2 x 3
AC Nielsen RSV$/L
vs. XYZ NSV$/L
Interviews
XYZ Financial NSV
4 X (1 – 5 )
XYZ Financial
Interviews
Y
G&P AC Nielsen
XYZ Financial
Volume divided by
1
4divided by 1
AC Nielsen applied
by XYZ volume
coverage
AC Nielsen RSV$/L
vs. XYZ NSV$/L
XYZ Financial NSV
4 X (1 – 5 )
XYZ Financial
Interviews
IC
AC Nielsen
Interviews
Market research
XYZ Financial
Volume divided by
1
AC Nielsen
XYZ NSV$/L applied
by Retailer Margin
2 x 3
AC Nielsen RSV$/L
vs. XYZ NSV$/L
Interviews
XYZ Financial NSV
4 X (1 – 5 )
XYZ Financial
Interviews
Licens
ed
AC Nielsen
Interviews
Market research
XYZ Financial
Volume divided by
1
AC Nielsen
XYZ NSV$/L applied
by Retailer Margin
2 x 3
AC Nielsen RSV$/L
vs. XYZ NSV$/L
Interviews
XYZ Financial NSV
4 X (1 – 5 )
XYZ Financial
Interviews
Suppor
t
Euromonitor
Canadean
Euromonitor Competitor Financial
Total Market
Value (RSV)
RSV$/L
Total Market
Volume
XYZ Market
Volume Share
by Segment
1 2 3 4 5 6 7
Key data for sizing (higher confidence level)
Step3. Build the framework and structure the model –Example for beverage
company current market share
2. APPROACH TO MARKET SIZING
• What is the key data?
• Is it included?
• Is it available?
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ExampleExample
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7. A. Client Financial
• Financial Detail Mapping
B. Industry Report /
Competitor data
• Scan Data Mapping
• Filling up the gap
C. Interviews
• Build the scenarios
Which data has higher
confidence??
How reliable is it?
Who do I need to interview?
Which data is missing?
What do I need to ask?
Any data is against each other?
Is it covered same scope?
Step4. Complete the model & Step5. Check the integrity - Review the
data source before applying on the model
2. APPROACH TO MARKET SIZING
Model has to be validated / challenged both for integrity reasons and buy-in
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8. This document is a partial preview. Full document download can be found on Flevy:
https://flevy.com/browse/document/building-a-market-model-and-market-sizing-376

9. 1
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