Revenues of BetterWorldBooks
In order to measure the market growth in the market, we need to make ome assumption.
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assumption for market growth : C.A.G.R. is equal to 1.3% in all countries (PwC, 2015).
Our analysis gathered that the German market value was €9.7 billion in 2010, the French one was €5 billion in 2009 (Simon & de Prato, 2012) and the English one €3.9 billion in 2014 (The Publishers Association, 2014 : The UK Book Publishing Industry in Statistics 2014) Hence, the market value for the different targeted country are the following:
2. assumption for market revenues: heavy readers buy twice as many books as average readers, who themselves buy twice as many books as small readers. With this hypothesis, we can attribute a percentage of the market for heavy, average and small readers.
Example for Germany:
Heavy readers: 44% of the population Average readers: 18% of the population Small readers: 38% of the population
Small readers’ coefficient: 1
Average readers’ coefficient: 2
Heavy readers’ coefficient: 4
Suppose that total market size is 1x38 + 18x2 + 44x4 = 250 Then, total market size of average reader is: 18x2/250 = 14,4% Total market size of heavy reader is: 44x4/250 = 70,4%
Segments' size in terms of euros
In order to compute the segments’ size in terms of euros, we compare the size of our target market to the size of the total market.
Example for Germany :
Online ecological average readers amounts for 753,719 people.
Online ecological heavy readers amounts for 1,842,913 people.
Average readers amounts for 11,640,240 people, hence we target 6.5% of average readers.
Heavy readers amount for 28,453,920, hence we target 6.5% of heavy readers.
This represents 6.5% of 70.4% plus 6.5% of 14.4% respectively. That means 5.512% of the total size of the German market or €496 million in 2017.
Segment size growth 2017-2019
3. assumption for the segment’s growth: segment size growth is equal to market size growth (see above)
BetterWorldBooks market share of its targeted market
It was not possible to compute the share of BWB on its targeted market. That is the reason why we decided to draw a graph of BWB’s revenues depending on its market share on its targeted market to find the « break even market share ».
These graphs can be seen on the budget page.
Calculus explanation:
We know that the total targeted market in Europe is equal to 1.059.000.000 Euros (836.933.516 Pounds).
For each market share, one should multiply the revenue by the market share.