The “Available market” is the market that you are able to sell into. It is an analysis that starts with the total possible market and then systematically eliminates all the areas you cannot sell into to highlight the market you truly compete in.
When is it useful?
This analysis is useful as a diagnostic tool to identify what lever you should invest in to grow your sales. For example, if you have weighted distribution of 95% and brand awareness of 40%, you should allocate your resources to increase awareness, not channel penetration.
It is useful to break down a high level market share number to the specific market share in your niche.
This is an example of an available market analysis for a consumer goods company. Their market share for the overall market is 13%.
However, they do not have the product range to serve 28% of the market, and they do not compete in the lowest price tiers in their range, immediate reducing the potential market to only 61% of the total.
There are some regions and channels they do not sell in, and they only have a weighted distribution of 85% (33/39) for the remainder.
Thus only one third of the total market is actually available to them – they have a 40% share of their available market.
Growing the accessible market – for example, by opening additional distribution channels may be a good way to grow.
How do you do the analysis?
Many of these numbers will come directly from your market research report
The only choice you will have to make is the sequence you carve off the market – in general, start with the most difficult chunks of the market to access, and end with the easiest and most incremental as in the above example.
You can also show this analysis visually as a marimekko chart.