Guesstimates: by ICON-Consulting Club of IIM-B
Guesstimates: by ICON-Consulting Club of IIM-B
Guesstimates: by ICON-Consulting Club of IIM-B
Mehak
Srijit Modi
Gupta Rohan Jain Shubham Maurya
Intern:
Intern:
BainKearney
& Company Intern: McKinsey & Company Intern: Boston Consulting Group
Work-ex:
Work-ex:
Accenture
CitiStrategy Work-ex: Goldman Sachs Work-ex: Tata Motors
St. Stephen’s
LSR College IIT Bombay, CFA L3 BITS Pilani
Agenda for today
q Back of the envelope type calculations, very open-ended, important to establish boundaries
Guesstimates
q Example: #Burgers sold in a McD outlet in GK, #Cigarettes smoked by Indians annually (market entry)
q Can be unconventional: #hair strands on a full-grown dog, #golf balls that can be fitted in a plane
Idea behind q Test candidate’s ability to deal with abstract questions which are not really complicated
q Buy-in from interviewer: stating the assumptions with justification and thought process
guesstimates
q Comfort with numbers: spontaneity in basic arithmetic calculations and keeping it simple
q Capability to act fast: guesstimates are candidate-driven; not losing track, if prompted, is very imp
How to prepare q Practice making your equation as MECE as possible, and verbalize your approach
q Fix your approach: Top-down/Bottom up, Demand /Supply side; new and replacement demands
q Have some basic statistics on the top of your head. E.g. population of metro cities, demographics
splits/ratios – income, gender, age; round off numbers for calculations
q Sanity Check: Build a habit to “sniff” your final answer. E.g. trillion-dollar market size of a pen?!
Useful Statistics to keep in mind while solving Guesstimates
Population and Area of Indian Cities Age Distribution in India* Important Indian Macro Data*
Rural 70% ~200 High Income (> INR 100k pm) 10%
Average population density of India: 328 persons per km2 Contribution Population
Employment Sectors
to GDP (%) Employed (%)
Agriculture 20% 50%
Manufacturing 30% 20%
Note: All star marked tables have rounded-off figures Service 50% 30%
Let’s solve one!