In the ever-evolving world of business, one aspect remains constant: the need for thorough market analysis. Understanding the market you operate in, its potential for growth, and your position within it is essential to inform your business strategy, identify opportunities, and mitigate risks. A crucial part of this market analysis involves understanding three acronyms that are critical to your business’s success: TAM, SAM, and SOM.
TAM stands for Total Addressable Market, SAM is short for Serviceable Addressable Market, and SOM refers to Serviceable Obtainable Market. At first glance, these acronyms might seem like jargon, but don’t be daunted. In reality, they represent useful, practical concepts that help you make sense of your market position and strategize accordingly.
TAM (Total Addressable Market) is the total market demand for a product/service. SAM (Serviceable Addressable Market) is the portion a company can target. SOM (Serviceable Obtainable Market) is the portion it can actually capture.
In this blog post, we’ll delve into the definitions of TAM, SAM, and SOM, why they are important, and how to calculate them for your business. By the end of this post, you’ll have a clear understanding of these concepts and how to use them to inform your business decisions. Stick with us as we unravel the mystery of TAM, SAM, and SOM. Let’s dive in!