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.
|Overview: Total Addressable Market|
The global, regional or national market size for a product or service.
The sales universe for a product or service.
Total global dollar or unit sales for a particular type of product or service.
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