TAM (Total addressable market) calculates the total revenue opportunity for a product and defines the total available market. It helps determine the funding a business or company should put into product development. The TAM concept is essential for a business because the calculation of effort and budget allows for setting priorities and customer segments. When an organization is ready to launch a new product or plan to cross-sell the existing product, TAM helps in breaking down all numbers at an understandable level.  There are three ways to calculate TAM:  Top-Down Analysis  Bottom-Up Analysis  Value Theory