Total Addressable Market (TAM) refers to the total revenue opportunity available for a product or service if it were to achieve 100% market share. It helps businesses understand the maximum potential for growth and guides strategic planning. TAM is often calculated by analyzing the number of potential customers and the average revenue each customer could generate. TAM can be segmented into different categories, such as Serviceable Available Market (SAM) and Serviceable Obtainable Market (SOM). While SAM represents the portion of the market targeted by a company's products, SOM indicates the share of the market that a company realistically expects to capture. Understanding these segments aids in effective market strategy development.