Calculation
Serviceable available market is based on a firm's products and distribution channels. Calculation of SAM requires industry data such as the size of a particular industry broken down by nation or city. For example, an auto manufacturer may calculate SAM by adding the market for their products in every nation that they reach with their distribution partners.Value
Serviceable available market is relevant to product development and distribution strategy. It represents the total revenue a firm could achieve if it had no competition. A firm with a high market share may need to increase its SAM in order to continue to grow. A small firm with a large SAM may be able to reach its revenue targets with less than 1% market share.Example
The global market for restaurant services is counted in trillions of dollars whereas a restaurant chain with locations in 12 cities can only reach a serviceable available market of 12.1 billion USD.| Overview: Serviceable Available Market | ||
Type | ||
Definition (1) | The total market size available to a product given a firm's distribution capabilities. | |
Definition (2) | The total portion of the market for a product or service that a firm can reach. | |
Related Concepts | ||
