Description

Stratrix Target Addressable Market Template and Guide include several deliverables to help entrepreneurs and executives define and present TAM in their pitch decks or strategy documents.

What is the Target Addressable Market?

At a basic level, the Target Addressable Market is the entire market size for your company’s products or services.  The target addressable market or target available market may seem easy on the surface, but entrepreneurs and executives are often wrong – not just in the calculation but the way they define/understand the concept.

Some founders/executives are starry-eyed with the notion, “If only all the six billion people bought my product,” or on the other spectrum, many do not realize the transformational opportunity and focus on narrow metrics, thus constricting the vision.

While Total Addressable Market is the global demand quantified into a revenue number (or units),  SAM (Serviceable Available Market) is a narrower slice of the worldwide market that a company’s products and services can target.  For example, the CRM market may be $XYZ billion, but the B2B Account-based CRM may be a subset of it.  A more realistic depiction may be SOM (Serviceable Obtainable Market) – which is what the company may be able to aspire for and achieve.

How do you Calculate Target Addressable Market?

Practitioners use three ways to calculate the total addressable or available market.

Top-Down: A traditional way to come up with a target available market is top-down analysis.  For example, if there is an X number of babies born each year, and their first-year expenditure on diapers is Y, then the total addressable market is Z.

Bottom-up:  The bottom-up calculation approach to building a Target Addressable Market and subsequent slicing is far more realistic.  In this case, based on the known components (price and reach), one derives how much of the serviceable obtainable market the company can achieve.

Value Theory:  The value theory focuses on what value a company’s products or services provide and how that value equation can translate into a revenue opportunity.

A combination of methods 2 and 3 is preferable to only using a top-down approach.

What does the Stratrix TAM Toolkit include?

The Target Addressable Market Templates and Guide are customizable deliverables for entrepreneurs and executives to leverage in creating their TAM calculations and presentations.

• PowerPoint Templates to visually present the TAM (Target Addressable Market, also known as Target Available Market).
• A tutorial on various facets of TAM and how to construct it.
• A few examples of how companies calculated Target Addressable Market for inspiration and guidance.

Who should use the Target Addressable Market Template?

1. Entrepreneurs and startup founders preparing their pitch decks.
2. Marketing and Sales Executives who are trying to figure out the market opportunity.
3. Corporate strategists who are trying to project revenue trends for various products and services.
4. Analysts from Investment Firms – Venture Capitalists, Investment Bankers, Private Equity, and Asset Management.

Stipulations:

• As the Target Addressable Market Template is a digital product, we do not accept returns, and there are no refunds.
• Product Sales are on an as-is basis and include no warranties.
• We do not provide any customization, implementation help, or product support.

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