TAM-SAM-SOM analysis is a method used to estimate market size and assess business opportunity.
TAM (Total Addressable Market) represents the total demand for a product or service if there were no limitations in resources or market reach. It measures the overall revenue opportunity.
SAM (Serviceable Available Market) is the segment of TAM targeted by the company’s products or services within its capacity.
SOM (Serviceable Obtainable Market) is the realistic portion of SAM that the company can capture, considering competition and operational constraints.
This analysis is important because it helps businesses to understand their market potential, prioritize target segments, allocate resources efficiently, set realistic goals, make informed strategic decisions, and attract investors by demonstrating a data-driven growth plan. It provides clarity from broad opportunity (TAM) down to practical sales targets (SOM), guiding marketing and sales efforts.