Calculation
Total addressable market can be calculated by total sales or total unit sales for a year. Such data may be available from governments, industry associations and market research firms. TAM is often a global number but can also be calculated for a nation or region.Value
TAM may be calculated for a firm's entire product line. This is extremely relevant to large firms as they may require large markets to continue to grow. For example, an electronics firm with a high market share may expand their TAM by entering a new industry such as transportation infrastructure. TAM is also relevant to small firms. A small company in an extremely large industry requires a unique value proposition that larger competitors will find difficult to match. Alternatively, a small firm with a small TAM might aim to take a high market share and plan to service the entire market.Example
The total addressable market for global telecom services was around 1.1 trillion Euro in 2016.| Overview: Total Addressable Market | ||
Type | ||
Definition (1) | The global, regional or national market size for a product or service. | |
Definition (2) | The sales universe for a product or service. | |
Definition (3) | Total global dollar or unit sales for a particular type of product or service. | |
Also Known As | TAM | |
Related Concepts | ||
