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Size and Growth of a Market

market size

market growth

Methodology

  1. Obtain size of overall market. Find data for years deemed relevant. Market size is usually presented over a three to five year scope. It is useful to create subsets within the overall market to differentiate between the client’s actual market and its potential ones. Determine future growth rates both by extrapolation and by studying projections.
  2. Calculate growth rate. Growth rate can be calculated using compound annual growth rate (CAGR) or average annual growth rate.
  3. Calculate company’s specific market size. Beginning with the size of the overall market, reduce its size by segments not directly related to the client’s business. The “waterfall” graph above is useful to portray this information.
  4. Calculate market as a percentage of the overall market. Divide size of the client’s specific market by the size of the overall market for that year. Perform this calculation for several years to illustrate trends in the sizes of the relative markets.

Notes