Building a Market Model and Market Sizing

1. OBJECTIVE OF MARKET SIZING

Why do we need to do market sizing?

Understand the business and the market environment

Identify growth opportunities aMeasure the size of the and For prioritise This is only partial view of the fullopportunity presentation. further details and download please goto: www.straticx.com/store.html Set the business strategy and define where to grow

(Qualitative knowledge to quantitative knowledge)

Critical tool and methodology in Strategy Design

2. APPROACH TO MARKET SIZING

Market sizing has five steps

Step 0

Step 1

Step 2

Step 3

Step 4

Step 5

the Gather available Decide the Build the For further Completedetails the Check This Understand is only a partial view of the full presentation. andthe download issue sources relevant details framework and model integrity please goto: www.straticx.com/store.html structure the

model

2. APPROACH TO MARKET SIZING 0 1 2 3 4 5

Step1. Gather available sources

General Sources

Industry Report

Competitor Data
Competitor Annual Report

Client Data

AC Nielsen / Aztec IBIS / BIS Shrapnel / Freedonia / Market Research etc

Client Financial Internal Study

This is only a partial view of the full For further details and download presentation. Yellow pages Broker report please goto: www.straticx.com/store.html Industry Association
Press Release

Websites

Customer survey

Interviews

Experts
Industry Association

Ex- exployees

Marketing Field sales

Workshop

Interviews are essential for gathering and validating data

2. APPROACH TO MARKET SIZING 0 1 2 3 4 5

Step2. Decide the relevant details

Based on Step0. key questions can be answered...

A. Relevant Segments
Product (Category)

B. Time Period
Historical Forecast

C. Data detail required

Market Volume Market Retail Sales Value (RSV) Market Wholesale Value (NSV)

Channel
Customer

Geography This is only a partial view of the full presentation. For further details and Market Profit (GM, EBIT, download EBITDA) Player please goto: www.straticx.com/store.html

Critical to define the scope and the structure before building model

2. APPROACH TO MARKET SIZING 0 1 2 3 4 5

Step2. Decide the relevant details Example in the beverage industry

A. Defining Segments Identify strategic opportunities and relevant segments in Australia
Soft Drinks Flavoured Milk Strong in IC Juices Packaged Water Energy Drinks Fast growing Sport Drinks

Example

RTD Tea Fast growing

Other

Product (Category)

The largest category

Channel

Fast QSR/ Food/Food National Courts

Take Away Food/ Route Non Food Kiosks/ Bakery

HEL

Grocery & Horeca Vending3 Convenience

This is only a partial view of the full presentation. For further details and download Immediate Consumption (IC) G&P Horeca Vending please goto: www.straticx.com/store.html
Geography
X Y Z A B C

Customer

<11 yrs

<21 yrs

<31 yrs

<51 yrs

<71 yrs

>=71 yrs

Other

Competitor
Market Leader 20% Share 10% Share Strong in Energy

2. APPROACH TO MARKET SIZING 0 1 2 3 4 5

Step2. Decide the relevant details

A. Relevant Segments
Product (Category) Channel Customer Geography

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)

Player This is only a partial view of the full presentation. For further details and download please goto: www.straticx.com/store.html

Data availability Internal request

Profit pools are ultimately where business derive value

2. APPROACH TO MARKET SIZING 0 1 2 3 4 5

Step3. Build the framework and structure the model - Current

Gross Margin (GM) Key assumption should be identified and validated through the whole process

Gross Margin (%)

Market Value (NSV)
Catego ry Channe l Catego ry Channe l

Channe l

Retailer Margin (%) Value Share (RSV%) Market Value (RSV)

Category Segment

Channe l Catego ry

Channe Price (RSV/L) This is only a partial view of the l full presentation. For further details and download Channe Volume (L) please goto: www.straticx.com/store.html l

Volume Share (%)

Competitor

Category

Catego ry

Catego ry

Channe l

Catego ry

Catego ry

2. APPROACH TO MARKET SIZING

Step3. Build the framework and structure the model Historical & Forecast

2005 market

2010 market
l

2006 market Channe

2007 market Channe
l Catego ry Catego
Competitor

Market size projection 200710 Forecast Volume & Price based on historical 2004-06 growth by Category x Segment

2009 market Channe 2008 market Channe

l Catego ry Catego Competitor l

This is only a partial view of the full presentation. For further details and download please goto: www.straticx.com/store.html
ry

ry Category

Category

Historical trends Individual interviews Workshop Macroeconomic data Other growth drivers

2. APPROACH TO MARKET SIZING 0 1 2 3 4 5

Step4. Complete the model & Step5. Check the integrity - Review the data source before applying on the model

A. Client Financial
Financial Detail Mapping

B. Industry Report / Competitor data

Scan Data Mapping

C. Interviews
Build the scenarios

Filling up the gap

ThisWhich is only a partial view of the full presentation. For further details and download data has higher What do I need to ask? How reliable is it? confidence?? please goto: www.straticx.com/store.html
Which data is missing? Is it covered same scope? Any data is against each other? Who do I need to interview?

Model has to be validated / challenged both for integrity reasons and buy-in

3. DRAWING CONCLUSIONS FROM MARKET SIZING

3. DRAWING CONCLUSIONS FROM MARKET SIZING

Findings
What is the largest category or channel? Who is the market leader in X channel?

Validate Findings
Does it match with interviews and other reports?

Analyze the reason why

Conclude initiatives

Why X category is growing Target X category in Z fast? channel Why Y channel volume is declining? Improve service in Y channel

This is only a partial view of the full presentation. For further details and download Which category is strong in What is the background of please goto: www.straticx.com/store.html WA? X trend?
What are the main changes?

Communication is critical (Workshop etc..)

Hand over the ownership of findings

This is only a partial view of the full presentation. For further details and download please goto: www.straticx.com/store.html