3.

MARKET
ANALYSIS

Research and analyze the target

market, including the size, growth
potential, trends, competition, and
customer needs and preferences.
This analysis can help identify
gaps in the market and
opportunities for differentiation

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 GOALS OF THE SECTION
Gain a better understanding of the demand
for products or services and of the
competitive landscape, and identify
untapped market segments
Analyze customer needs and preferences to
identify gaps and areas where the business
can provide unique value propositions or
improve existing offerings
TEMPLATES INCLUDED
• Market Sizing
• Market Overview
• Trends analysis & Priorities
• Gaps vs Market
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BUSINESS EXAMPLES
Netflix evaluates the size and growth potential of the streaming
industry, as well as the preferences and behavior of its target
customers. This includes analyzing customer data to identify trends
in viewing habits and content preferences, as well as evaluating
the competitive landscape to identify opportunities for
differentiation. By conducting a thorough market analysis, Netflix
can better understand its competitive position and develop more
effective strategies for growth and innovation.
Nike evaluates the size and growth potential of the athletic
footwear and apparel industry, as well as the preferences and
behavior of its target customers, analyzing customer data to
identify trends in sports participation and athletic preferences, as
well as evaluating the competitive landscape to identify
opportunities for differentiation. For example, Nike identified an
opportunity to appeal to female athletes and created a line of
athletic wear designed specifically for women
 Module overview
MARKET ANALYSIS
1 2 3
MARKET SIZING TREND ANALYSIS GAP ANALYSIS
DESCRIPTION

“Assess the overall size and potential of a “Monitor and interpret evolving market “Determine the differences between current
specific market by estimating its current patterns, using historical data to forecast market offerings and consumer needs,
value, future growth potential, and key potential future shifts and their implications.” identifying areas of opportunity and unmet
segments.” demand.”

Estimate Forecast Bridge

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 Market Sizing
• Market sizing refers to the process of estimating the potential volume or value of a specific market segment or industry. It's often broken
down into three distinct segments: TAM, SAM, SOM.

• Market sizing is a fundamental step in strategy formulation for several reasons:

1. Resource Allocation: By understanding the market size, companies can allocate resources (capital, labor, marketing budget)
more effectively, ensuring they are neither underestimating nor overstretching their potential.

2. Investment Decisions: For startups seeking investment or businesses looking to launch new products, demonstrating a sizable
TAM can be critical to attracting investors. A large TAM indicates a lucrative market opportunity.

3. Identifying Opportunities and Threats: Understanding SAM and SOM can help a business identify where there are gaps in the
market or areas of potential competitive threat. This insight can guide the development of new products, services, or market
expansion strategies.

4. Risk Management: Recognizing the limits of the obtainable market (SOM) helps companies set realistic expectations,
minimizing risks associated with overestimating market potential.

5. Performance Metrics: By defining the TAM, SAM, and SOM, companies can set benchmarks and track their progress, which in
turn can inform future strategies, sales forecasts, and growth metrics.

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 Market Sizing

TOTAL ADDRESSABLE MARKET (TAM)

The total market demand for a product or service, which includes all potential
customers or users who might be interested in purchasing the product or service.
TOTAL ADDRESSABLE
It represents the maximum revenue opportunity for a business if it were to capture
MARKET (TAM)
100% of the market

SERVICEABLE ADDRESSABLE MARKET (SAM)

SERVICEABLE ADDRESSABLE
MARKET (SAM)
The portion of the TAM that a business can realistically reach and serve with its
products or services, given its resources and capabilities. It represents the subset
of the TAM that a business can realistically target and capture

SERVICEABLE OBTAINABLE SERVICEABLE OBTAINABLE MARKET (SOM)

MARKET (SOM)
The percentage of the SAM that a business can realistically capture with its
products or services, given its competition and market conditions. It represents
the actual revenue opportunity for a business, based on its market share within
the SAM

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Market Sizing: Under Armour
TOTAL ADDRESSABLE MARKET
(TAM)
$300
billion
TOTAL ADDRESSABLE MARKET (TAM)
Let's say the global sportswear market is
valued at $300 billion
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REAL BUSINESS CASE
SERVICEABLE ADDRESSABLE
MARKET (SAM)
$100
billion
SERVICEABLE ADDRESSABLE MARKET (SAM)
Assuming Under Armour mainly targets the
athletic wear and footwear segments in
North America, Europe, and some parts of
Asia, the SAM might be $100 billion (which
is a fraction of the global market).
SERVICEABLE OBTAINABLE
MARKET (SOM)
$5
billion
SERVICEABLE OBTAINABLE MARKET (SOM)
If Under Armour currently holds a 5%
market share in its active segments, the
SOM would be $5 billion.
 REAL BUSINESS CASE

Market Sizing: Airbnb ILLUSTRATIVE,

NOT EXHAUSTIVE

TOTAL ADDRESSABLE MARKET (TAM)

The total addressable market for Airbnb's short-term rental accommodations includes all
individuals and groups who are interested in booking accommodations for travel or vacation
TOTAL ADDRESSABLE purposes. This includes individuals and families of all ages and income levels, as well as
MARKET (TAM) groups such as business travelers, event attendees, and conference attendees. According to
industry research, the global travel and tourism industry was valued at $7.6 trillion in 2016 and
is projected to reach $13.6 trillion by 2027.

SERVICEABLE ADDRESSABLE MARKET (SAM)

SERVICEABLE ADDRESSABLE
MARKET (SAM) Airbnb's serviceable available market includes individuals and groups who are interested in
booking short-term rental accommodations, and who have access to the Internet and the
ability to travel. This includes individuals and families with disposable income, as well as
business travelers and groups attending events or conferences. According to industry
research, the global online travel market was valued at $630 billion in 2020 and is projected to
reach $1.1 trillion by 2023.

SERVICEABLE OBTAINABLE SERVICEABLE OBTAINABLE MARKET (SOM)

MARKET (SOM)
Airbnb's serviceable obtainable market includes the portion of the serviceable available market
that the company can realistically capture. This includes individuals and groups who are
interested in booking short-term rental accommodations, and who choose to use Airbnb's
platform over other booking options. According to industry research, Airbnb held a 20% share
of the global online travel market in 2020, with an estimated 321 million guest arrivals booked
through the platform since its founding in 2008.

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