tag:blogger.com,1999:blog-51813220577974404652024-03-08T12:32:49.225+01:00Tam Sam Som Market Evaluations - Easily ExplainedTAM SAM SOM is mostly misunderstood.
But actually when you look at simple examples, it is quite easy to understand.
If you have any questions, just let me know, because I deal with TAM SAM SOM evaluations every day!Anonymoushttp://www.blogger.com/profile/03048025895248095239noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-5181322057797440465.post-42329787877599258592009-03-06T20:12:00.028+01:002014-06-12T17:07:15.139+02:00TAM SAM SOM - Easily explained<b>What does TAM SAM SOM stand for?</b><br />
<b><span style="color: #660000;"><span style="font-size: x-small;">(Last updated 6th June 2014) </span></span></b><br />
<br />
Before you enter the market with your product, you have to keep 3 important questions in mind.<br />
What is the <b>TAM SAM SOM</b> for my product?<br />
<br />
<b>Here the official definition:</b><br />
<span style="color: #660000;"><b>Tam:</b></span> <b><u>T</u></b>otal <b><u>A</u></b>vailable <u><b>M</b></u>arket<br />
<b>Focus on:</b> <span style="color: #660000;">Total market / size</span><br />
Example: <b><span style="color: #38761d;">Total LED Market </span></b><br />
<br />
<span style="color: #660000;"><span style="font-weight: bold;">Sam:</span> </span><u><b>S</b></u>erved/Serviceable <b><u>A</u></b>vailable <b><u>M</u></b>arket<br />
<b>Focus on: </b><span style="color: #660000;">Your own technology/ services</span><br />
Example: The <span style="color: #38761d;"><b>Total Living colors LED marke</b>t </span> (Segment of total LED market)<br />
<br />
<span style="color: #660000;"><span style="font-weight: bold;">Som:</span></span> <u><b>S</b></u>erviceable <u><b>O</b></u>btainable <b><u>M</u></b>arket<br />
<b>Focus on:</b> Which
<span style="color: #660000;">realistic market share</span> can be obtained by myself considering:<br />
competition, trends, expected demand/forecast, countries, my sales/distribution channels and other market
influences?) <br />
Example: <b><span style="color: #38761d;">My realistic goal</span></b> to sell Living Color Products into the LED market. <br />
<br />
<br />
(Click on graphic to enlarge):<br />
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<br />
<b>The situation:</b><br />
Let's say I am company XYZ who makes
LED lighting bulbs for home use. <br />
But I only have the technology to produce the <u>non-dimmable</u>
version of LED lighting bulbs. <br />
<b><br />The TAM</b> <br />
would be the whole worldwide LED lighting market.<span style="color: #660000;"> <br /><b>(Focus on total LED market) </b></span><br />
<br />
<b>My SAM</b> <br />
would be the worldwide <u>non-dimmable</u> LED bulbs market. <br />
<b><span style="color: #660000;">(Focus on <u>your own technology/ what you can serve</u> within the total LED market) </span></b><br />
<br />
<span style="font-weight: bold;">My SOM </span><br />
would
be the <u>realistic and obtainable market</u> considering: <br />
Competition,
trends, demand/ forecast, focus countries and sales channels <br />
(distributors, resellers, direct business
etc.) that I can achieve to sell in 2014.<br />
<b><span style="color: #660000;">(Focus on <u>your realistic market share that you can obtain</u> considering all market factors within the non-dimmable LED market)</span></b><br />
<br />
<b>Remark: </b><br />
The TAM stands for <b>Total Available Market</b>.<br />
Depending on how you look at the LED market - in the above example my TAM can be:<br />
<b>1) The total worldwide LED lighting market (including all LED bulbs, LED streetlights, etc.) <br />2) The total worldwide LED lighting bulb market</b> (including the dimmable and non-dimmable LED versions). For the <b>TAM</b> you are free to choose one or the other. However, more important is the question on your <b>SAM</b> and <b>SOM</b>. The <b>SAM</b> is always focusing on your own technology, that, what you can serve on the market. <b>SOM </b>reflects the <b>SAM</b> and also considers all market factors that can possibly influence the success of your product. <br />
_____________________________________________________________________________<br />
<br />
<b>Here a deeper explanation to TAM SAM SOM</b><br />
<b>in terms of OEM/ODM business model:</b><br />
<br />
<span style="font-weight: bold;">Example:</span><br />
I am company XYZ, OEM Manufacturer and supplier entering the LED Living Colors Market:<br />
<br />
<span style="font-weight: bold;">TAM:</span> From my market research and reports which I have read, I found out that the <span style="font-weight: bold;">total</span> number of LED Living Colour Lamps being sold in 2014 in Europe will be approximately 1 Million pieces.<span style="font-weight: bold;"> </span><br />
<span style="font-weight: bold;">T</span>otal <span style="font-weight: bold;">A</span>vailable <span style="font-weight: bold;">M</span>arket <span style="color: #000099;"><br />
The TAM Question: What is the Total Achievable Sales Amount of LED Living Colour lamps incorporating all market players together?</span><br />
<br />
<span style="font-weight: bold;">SAM: </span>Philips has the highest market share of the LED Living Colour lamps with 800.000 units a year. The remaining 200.000 units are being sold by other brands.<br />
<span style="font-weight: bold;">My SAM</span> (<span style="font-weight: bold;">S</span>ervable <span style="font-weight: bold;">A</span>vailable <span style="font-weight: bold;">M</span>arket) is 80% of the total market of 1 Million LED Living Colours lamps<span style="color: #000099;">. The SAM Question: What can I achieve in 2014 in maximum sales?</span><br />
<br />
<span style="font-weight: bold;">SOM</span>: My strategy as OEM manufacturer is to focus and work together with the Top Market Player, in this case Philips <span style="font-weight: bold;">only</span>. As I am a new supplier to Philips, they agree to test me out and ask me to produce only 200.000 pieces of the 800.000 that they expect to sell in 2014.<br />
The remaining 600.000 units are being produced by their current suppliers.<br />
<br />
In this case my <span style="font-weight: bold;">SOM </span>(<span style="font-weight: bold;">S</span>erviceable and <span style="font-weight: bold;">O</span>ptainable <span style="font-weight: bold;">M</span>arket) will be 200.000 pieces (a share of 25%) of the 800.000 pieces from Philips. This SOM is my realistic and reachable target for 2014. <span style="color: #000099;"><br />
The SOM Question: What can I (as company XYZ) achieve in 2014 selling to Philips?<br />
<br />
Questions?<br />
Just contact me on carstenschade@hotmail.com<br />
</span><div class="blogger-post-footer">You can contact me under:
Carsten Schade
schade@beniers-consultancy.com</div>Anonymoushttp://www.blogger.com/profile/03048025895248095239noreply@blogger.com7