total addressable market (TAM)
Total Addressable Market (TAM) represents the maximum revenue that a product or service could generate if it were to achieve 100% market share, without any competition or geographical limitations. TAM is the "big picture" number, the total market demand for your offering.
TAM is most often used alongside SAM and SOM to tell a complete story:
Acronym | Stands For | Definition |
TAM | Total Addressable Market | The total market demand for a product or service. |
SAM | Serviceable Available Market | The portion of the TAM that your business can actually reach with its current business model, geography, and offerings (factoring in constraints like distribution). |
SOM | Serviceable Obtainable Market | The realistic portion of the SAM that your company can expect to capture, considering the existing competition and market realities (this is often your initial, achievable target market). |