Business Plan Market Analysis 1

Question 1

What does TAM stand for in market analysis?

Accepted Answer

Total Addressable Market

Answer

TAM stands for Total Addressable Market — the total revenue opportunity if a product captured 100% of its market.

Question 2

What is a market segmentation strategy?

Accepted Answer

Dividing the total market into distinct groups with similar needs

Answer

Market segmentation divides the overall market into distinct subgroups (segments) with shared characteristics or needs.

Question 3

What does a competitive analysis identify in a business plan?

Accepted Answer

Competitors' strengths, weaknesses, market position, and strategies

Answer

A competitive analysis identifies competitors' strengths, weaknesses, market positioning, and strategies to help a business differentiate itself.

Question 4

What is the purpose of defining a target market?

Accepted Answer

To focus resources on the most likely buyers

Answer

Defining a target market focuses marketing and operational resources on the customer segments most likely to buy the product or service.

Question 5

What does SAM stand for in market sizing?

Accepted Answer

Serviceable Addressable Market

Answer

SAM stands for Serviceable Addressable Market — the portion of the TAM that a company can realistically target given its business model.

Business Plan Practice Test