Answer to Question #255379 in Accounting for swati

Question

A friend of yours is planning to open a unique Mexican-Lebanese fusion food restaurant in Barrie, Ontario (population 150,000). 

Given the restaurant's unique fusion food options, along with the popularity of regular Mexican and Lebanese food cuisines, your friend expects to have a slight advantage over most of the other 240 restaurants in the city, even though all restaurants have the same geographic access to the city's populace.The Canadian restaurant and food service association estimates that total industry revenues for Canada (population 37.4 million) will be $75 billion next year.

What would be the Total Addressable Market (TAM), Serviceable Available Market (SAM) and Serviceable Obtainable Market (SOM) for this restaurant?

Answer 1

Total Addressable Market (TAM): Suppose Canada has a population of 37.4 million and 50% of them need a fusion restaurant. Then the volume of TAM will be 18.7 million people. If you make meals for $ 3, the total target market is $ 56.1 million.

Serviceable Available Market (SAM): You sell food for serving. Suppose that such dishes from 37.4 million people are needed for 10% of people, i.e. for 3.74 million people - this is SAM

Serviceable Obtainable Market (SOM): You are located in Barrie, Ontario (population 150,000). That is, the actual achievable market size is 150,000 people.