Question

Topic: Strategy

What Is Tma (total Available Market)

Posted by Anonymous on 6/8/2005 at 11:17 PM ET 250 Points
Dear all member,

My partner has just sent me the question as follow:
"What are the competitor situation and the TAM?"

May all of you let me know what I should do for that thing. Could u provide some ideas for that thing.

Look forward to hearing from you soon.

Thanks and regards, Huynh Du
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RESPONSES

  • Posted by Chris Blackman on 6/9/2005 at 12:18 AM Accepted
    What they are asking you is how big the market is, and who the competitors are (and probably, also, whether you can also tell them how the market is shared among the existing competitors).

    This is done in several steps:

    1. Size the Market

    2. Identify the competitors

    3. Segment the Market and estimate segment sizes

    4. Allocate competitors to segments and estimate competitor shares

    Does that help or do you need more specific "how to" suggestions?




  • Posted by wnelson on 6/9/2005 at 12:54 AM Member
    Huynh Du,
    TAM, or Total Available Market is the dollar or unit value of a particular market opportunity. This amount is independent of limits a company has in being able to make products with the technology available to them or the limitations in their sales force to reach customers.

    TAM can be calculated several ways. If there is a trade group in the industry, you can get at it from a producer direction - how many units produced. In America, for major appliances, Appliance Magazine produces figures on the number of appliances produced by American manufacturers. All of the makers report to an unbiased source (anonymously) and it's tallied. There are sources from consultants in the computer industry too. The semiconductor industry has the World Semiconductor Trade Association (WSTS) that gathers producer data and publishes market information.

    If this data is not available, you can calculate from the bottom up by defining the consumers using demographic data and estimating the number from population data. Based on assumptions on how many of the products are purchased per consumer per year and average selling prices, you can calculate the TAM.

    Hope this helps....

    Wayde
  • Posted by wnelson on 6/9/2005 at 11:49 AM Member
    Huynh Du,

    Besides TAM - TOTAL, there is PAM - Product Available Market which represents the market that you can participate in with the products you have today or can have tomorrow. Also, SAM - Served Available Market - which accounts for the market you can reach with your sales channels. Many companies leave off PAM and incorporate the product piece into SAM. When developing strategies and plans, SAM is the figure of most value, since this is the market you can most effectively target. This is the "Available Market" term to which Ernie is referring.

    Wayde
  • Posted by wnelson on 6/10/2005 at 12:43 AM Member
    If the revenue forecast accounts for all the product that can be sold in that market segment, it is TAM. See the definitions of TAM above.

    Wayde
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