Size a New IKEA Store's Opening Month for a CEO Briefing

You have been asked to put together a projection of how a newly opened IKEA store will do in its first month, for the company's CEO. Explain how you would prepare it, then work through the estimate to a figure the CEO could use. ```hint Pick a spine and a check Decide whether to build up from the people within reach of the store or from how established stores perform, keep the other as a cross-check, and ask what makes a store's first month unlike a typical one. ``` ### Clarifying Questions - What should the projection measure: sales revenue, store visits, number of purchases, or profit? - Where is the store, and is it IKEA's first in that market or one more store in a region the brand already serves? - Do online orders delivered from or collected at the store count toward its first-month numbers? - What will the CEO use the projection for: setting a target, planning staff and stock, or judging the opening afterward? ### What a Strong Answer Covers - Agreement on what is being projected and what decision it supports, settled before any arithmetic - A driver tree from the chosen starting point to the projected figure, with each assumption labeled and rounded - How an opening month differs from a steady-state month, and how that is reflected in the numbers - Correct, unit-consistent arithmetic and a cross-check by an independent method - A range with the drivers that move it most, presented in a form a CEO can act on ### Follow-up Questions - Two weeks after opening, sales are running well below your projection. How would you find out why? - Which signals available before opening day would you use to tighten the estimate? - How would you extend the first-month projection into a first-year forecast?