Once you know the SAM, you can assess the SOM: evaluate the competitiveness of the product and the company, take into account current resources and capabilities.
For example, if the region's SAM = $100 million, and your marketing strategy and production allow you to reach 10% of the audience, SOM = $10 million.
Although the TAM, SAM and SOM method is widely used, it has a number of shortcomings and is often criticized.
Opponents of the method consider it too simple: austria telegram number database the methodology often simplifies complex market realities. It does not take into account the dynamics of changes in market conditions, such as the emergence of new competitors, changes in consumer preferences, or technological progress.
The second criticism is the subjectivity of the estimates, as TAM, SAM and SOM calculations often depend on assumptions and data that may be incomplete or incorrect. For example, the optimistic data.
When analyzing a product for a highly specialized industry, determining TAM can be problematic due to the lack of available data.
In addition, new companies may overestimate SOM, which leads to inflated expectations and disappointment among investors. At the same time, the methodology does not sufficiently take into account the dynamics of competition, which may lead to an overestimation of the available market. Some analysts also note that the methodology is more suitable for investor presentations than for real business analytics. In addition, marketers who use the methodology often overestimate the market potential, not taking into account demand factors and consumer behavior.
In my opinion, the TAM, SAM and SOM method for market assessment helps companies structure data and soberly assess their capabilities and identify the most profitable areas for growth. However, it is important to consider its limitations and use additional tools for more detailed analysis.
TAM estimate may be based on overly
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