Market size determination

Question 1

Top-down

Answer 1

Starts with a broad estimation of the total market size and usage of strategic choices, segmentation and estimation to scale down and arrive at an estimated market share.

Question 2

Bottom-up

Answer 2

Takes into account the firm’s resources and considers actual facts and capabilities when making assumptions and
estimating a market share.

Question 3

Challenge when using both top-down & bottom-up analysis

Answer 3

They are both estimations and often result in very different numbers
– top down often being quite a large and optimistic number
– bottom up often being quite a small and somewhat uninspiring number.