SAM and SOM mean and what phrases do they come from?

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What do the abbreviations TAM,
TAM (Total Addressable Market or Total Available Market) is the entire fully accessible market or the maximum market volume that is theoretically available for a specific product or service. This indicator reflects all possible demand that exists in the market, excluding competition, audience coverage limitations, and the company's ability to produce and sell products. That is, if there are unlimited production capabilities and no competitors, a business norway mobile database can count on a market volume equal to TAM.

For example, if you manufacture electric bicycles, your company's TAM would include the entire global market for all electric bicycles available without restrictions.

The TAM indicator is used primarily to assess the potential of a business, forecast possible profits in a specific niche, and the attractiveness of a business project. This indicator is also used to calculate market share (for example, the current sales volume of a business is related to TAM).



It is obvious that even monopolists are unlikely to cover the entire TAM, due to the presence of competitors, limitations of production capabilities and real barriers to covering the entire possible audience of the product. All these factors outline realistic boundaries of the share of TAM achievable for a business. This share of the market available for coverage is called SAM (Serviceable Addressable Market) - this is the percentage of the market that can be served by one or more suppliers. Thus, SAM is a serviceable addressable market, that is, the part of TAM that is achievable for a company, taking into account geography, target audience and other factors. This is a more realistic assessment of the market in which a business can operate.

For example, for a company that sells electric bicycles only in Europe, SAM would be limited to the European electric bicycle market.

There are practically no niches in the market where there is no competition at all. Even if a company or product has no direct competitors, part of the product's target audience covers the need with other products or services that overlap in functionality with the product being analyzed. For example, some potential buyers of cameras cover the need for photographic equipment by purchasing modern technological phones with cameras that have parameters similar to professional photographic equipment, as well as by purchasing accessories for professional shooting on a smartphone. In addition to competition at the level of covering the need, each product also faces competition at the level of using the consumer's available funds (for example, a potential client may refuse to buy an expensive smartphone, investing in the purchase of additional equipment for a new car or simply choosing a travel package instead of the latest gadget model).