Market sizing for students.

Market sizing is not a trick question. It is a test of whether a team can make a number that a sceptical adult can audit in thirty seconds. The Case Competition asks students to show the formula, not to worship the result.

State the unit.

Are you sizing revenue, users, trips, households, or litres? Annual or monthly? Hong Kong or a district? A Starbucks India case is not helped by a global coffee TAM copied from a blog. A Google 2014 case is not helped by a 2026 smartphone figure. Name the year, the geography, and the unit before you multiply anything.

Choose a method you can defend.

Top-down starts with a known population or industry total and applies filters. Bottom-up starts with a store, a train line, a sales team, or a user action and scales. Good teams often do both and compare. If the two answers differ by an order of magnitude, the story is in the gap, not in the average.

Write assumptions as labelled drivers: population, penetration, frequency, price, take rate. Give each driver a source: case exhibit, public statistic, or reasoned estimate. If it is an estimate, say so. Judges punish hidden guesses more than visible ones.

Sanity-check like an operator.

Ask whether the implied number of stores, riders, or daily users could physically exist. Divide the market by the number of competitors. Convert annual revenue into daily tickets. Compare your result with a known analogue: a line, a city, a brand the case already mentioned. If MTR’s implied fare revenue requires every resident to ride twice a day at airport-express prices, the model is wrong.

Present the number as a range plus a base case.

Give a low, base, and high. Show which driver moves the answer. Then use the number. A market size that does not change the recommendation was a waste of the clock. If the addressable segment is small, the recommendation should get smaller, later, or more focused. If it is large but hard to capture, the story is capability and cost to serve, not TAM theatre.

Students can practise with archive prompts: coffee occasions in India, premium skincare in Japan, digital advertising in 2014, or peak-hour rail trips in Hong Kong. Keep the arithmetic elementary. The skill is judgement, not calculator speed.

See also issue trees and training drills.