A market report is a cross-check, not a customer plan.
Top-down sizing narrows a reported market to the geography and product segment relevant to a business. Each percentage must have a defensible meaning and apply to the population remaining after the prior filter.
The final market-share assumption is particularly weak without supporting sales evidence. This page exists to reconcile industry totals with a bottom-up model, not to turn an arbitrary small percentage into a revenue forecast.
The formula, made clear.
- Conditional segment share
- Share within the already-filtered geographic market; avoid overlapping filters.
- Scenario share
- A hypothetical position in the scoped market, not a measured capture probability.
Put the numbers in context.
A $5,000,000,000.00 annual market narrowed to 10% geography and 20% relevant segment becomes $100,000,000.00. A 2% scenario equals $2,000,000.00 annually.
| Input | Example value |
|---|---|
| Reported annual market revenue | $5,000,000,000.00 |
| Relevant geographic share | 10% |
| Relevant segment within that geography | 20% |
| Scenario share of the scoped market | 2% |
| Scenario annual revenue | $2,000,000.00 |
What this calculation assumes
Comparable annual revenue definitions, source date and pricing. Filters are sequential and evidence-based. The model cannot validate the market report, competitive response or the scenario share.
What to consider next.
Rebuild the implied revenue from named customer segments, pricing and sales capacity. Investigate large differences between methodologies.
How we approach financial models →