There is little published information on the Carpassian computer market because of its relative infancy.  As a result, Leif Raker has conducted market research in conjunction with Convergence International.  As of 19xx, 5% of businesses surveyed had computer equipment.  Of those surveyed, .5% had equipment that was less than 5 years old.  The statistics for personal computer use are even more compelling.  Of 1000 Carpassians surveyed, less than 1% had personal computers in their homes.  The government sector is slightly better off.  Leif Raker and his father surveyed 25 government agencies to measure their interest in purchasing computer equipment.  Every department responded favorably to the survey, provided that prices were competitive and training was readily available.  In addition, the newly elected Carpassian president understands the importance of technology and is committed to investing in his country’s information infrastructure. 

Currently, there are no retailers in Carpassia who can supply the country with the computer equipment it demands.  Convergence International was formed to take advantage of this market opportunity.  As CI’s sole supplier, ROMDATA will benefit from this opportunity as well.

At this time, the growth of the market is difficult to project.  There are no official estimates available.  However, Convergence International and ROMDATA estimate the level of demand in the government sector to be 5,000 computers this year based on initial inquiries.  As the market economy grows and demand for computer equipment increases in the private market, CI and ROMDATA anticipate yearly demand to be 10,000 computers in the second year.

The Carpassian computer market has three main segments: small business, state enterprises and foreign companies.

The following is a description of each market segment.  This information was obtained from interviews with Western European investment bankers, World Bank publications, and Convergence International.  

>	Small Business

The market for small business is currently very small.  However, this segment is expected to grow 25% annually as the market economy develops and new businesses are created.  Thousands of people previously employed by the communist government are expected to start businesses in the private sector.

There are at least four reasons these small companies currently operate without computers:

1. 	The companies have not yet raised the capital or cannot meet 
	financing requirements;
2.	The founders are not computer literate or have not yet even been exposed to computers; 
	or, if they have;
3. 	They do not yet feel the strategic need for computers in their business; or
4. 	They are not yet large enough to have realized any of the benefits from computer 	use.

ROMDATA and Convergence International will develop a small business sales force in 19xx to educate this segment on the benefits of computer use.  Their strategy is to make these small business owners aware of their products early.  For that reason, this segment will probably not generate revenues until year 19xx.

>	State Enterprises

The majority of Carpassian industries are still state run.  Because of the interest this segment has expressed and because of its size, ROMDATA and Convergence International will generate the bulk of their revenues from it.  In addition, this market segment is also attractive because of its access to capital. 

Convergence International has already received an order from the Department of Energy.

>	Foreign Companies

As the Carpassian market economy grows, foreign corporations will open offices in Carpassia because of favorable tax incentives provided by the Carpassian government.  In return for foreign investments in their country, the Carpassian government will offer deferred taxes for 10 years.  In exchange for those incentives, the government will require that foreign corporations support their country’s emerging businesses.  Convergence International, as the only retailer of Western computer equipment, will directly benefit from that requirement.

The following table (Market Segments) represents the major market segments in the Carpassian computer market: