Total addressable market, or TAM, is the global, regional or national market size for a product or service.
CalculationTotal 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.
ValueTAM 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.
ExampleThe total addressable market for global telecom services was around 1.1 trillion Euro in 2016.
This is the complete list of articles we have written about product development.
If you enjoyed this page, please consider bookmarking Simplicable.
© 2010-2023 Simplicable. All Rights Reserved. Reproduction of materials found on this site, in any form, without explicit permission is prohibited.
View credits & copyrights or citation information for this page.