BURGER MACHINES – MARKET SIZING
This is a case study based on a real case that OC&C worked on in 2005, trying to gain an idea of the global market for Burger machines. This is typical of an ‘analytical’ case study that you will get asked – requiring sound numerical skills (the ability to competently use a calculator), the ability to come up with some sensible estimates and some commercial awareness. Excellent candidates differentiate themselves by the quality of the answer, but also the time taken to respond – some of the later, more advanced questions will only get touched upon if a candidate has ‘aced’ the earlier questions.
Our client is responsible for the sale and manufacture of burger machines that produce the meat patties that populate the ever-popular hamburgers, sold worldwide by the likes of McDonald’s and Burger King. OC&C have been approached to help them think about their international expansion strategy, and in particular the opportunity posed by developing markets, such as China, India etc. Your specific task on this case is to scale the opportunity – i.e. how many Burger Machines could this company expect to sell into China in the future.
Market estimation methodology
First question: how would you estimate the market for burger machines? The good candidate explains that the market for burger machines is clearly driven by the fast food market, so we need to consider the total number of burgers that are likely to be sold, the number of burgers that a machine can produce and divide one by the other. The excellent candidate points out in addition to the above that we need to consider the effect of different population centers and transport on the likely configuration of manufacturing plants. We also need to consider the effect of importing on the local demand for burgers, as well as any existing infrastructure that may be capable of meeting manufacturing demand.
Second question: given that a...