Competitiveness of Vietnamese Offshore Software Outsourcing Companies in the Japanese Market
- 10.2991/aebmr.k.211119.049How to use a DOI?
- Vietnam; Japan; National competitiveness; Competitiveness diamond; IT outsourcing destination; software export success factors
Vietnamese IT sector is a young and promising sector. Software outsourcing makes a critical contribution to the IT sector where domestics firms offer outsourcing services as a major part of their business model. Considering assessment criteria from the Porter’s Diamond Model, the author examines Vietnam’s competitiveness in the Japanese software outsourcing market, identifying how the country could become more competitive compared to other major and potential players in the global market. A qualitative approach is proposed for this study. In order to find out the current situation of the Vietnamese offshore software outsourcing industry and the Japanese market, the author collected data and information from articles, publications and studies of professional institutions. In order to process the data and extract the relevant information regarding the competitive advantage of Vietnamese offshore software outsourcing sector, methods of comparison and critical analysis are also utilized. The paper finds that the practice of software outsourcing is a critical motivation for development enterprises in the Vietnamese IT sector and is driven by quality and availability of human resources, followed by costs, favourable international linkages, related and supporting countries and lastly, firms’ competitive structure and strategies. This paper is useful for practitioners considering Vietnam as an offshore software outsourcing location, for the Vietnamese administration as a guide to policies and regulations for fostering its competitiveness, as well as for IT researchers, who could complement the study with primary data and further develop the conceptual approaches applied in this paper, whether in Vietnam or other developing countries.
The paper aims at determining the competitiveness of Vietnamese offshore software outsourcing enterprises and providing suggestions to enhance their competitiveness in the Japanese market. Due to the limitation of access data time duration, the data will be collected and analysed in the five-year period, from 2015 to 2020
With the aim of determining the competitiveness of Vietnamese offshore software outsourcing enterprises, the study tries to address the following questions:
What is the current situation of Vietnamese offshore software outsourcing enterprises and the Japanese market?
What is the competitiveness of Vietnamese offshore software outsourcing enterprises according to Porter’s Diamond Model?
How to enhance the competitiveness of Vietnamese offshore software outsourcing enterprises in the Japanese market?
Research design, approach and method:
A qualitative approach is proposed for this study. In order to find out the current situation of the Vietnamese offshore software outsourcing industry and the Japanese market, the author collected data and information from articles, publications and studies of professional institutions. In order to process the data and extract relevant regarding the competitive advantage of Vietnamese offshore software outsourcing sector, methods of comparison and critical analysis are also utilized.
More specifically, this study summarizes and evaluates information and data published in articles, publications and studies from World Bank, Statista, and METI, using a combination of the following keywords: offshore outsourcing, offshore software development, information technology outsourcing destination, IT industry in Vietnam, key success factors of IT industry in developing countries, advantages of Vietnamese software outsourcing service providers, challenges of Vietnamese software outsourcing service providers, Vietnam as an offshore outsourcing destination, the Japanese IT market, to name a few. Abstracts and conclusions were briefly reviewed; unrelated findings to the research objectives and questions were omitted. The author finds that a large number of previous studies have been conducted on offshore outsourcing in general, or the success of the IT outsourcing of China and India – the two world’s leading countries in the industry; but very few papers have been researched on the competitive advantages of the Vietnamese software outsourcing companies, especially those operate in a demanding market like Japan.
While applying the Porter’s theory of competitive advantage, utilizing the diamond of “determinants” as a framework for analysis, the author identifies that Vietnam’s offshore software outsourcing sector has competitive advantages in terms of superior and available talents, domestic rivalry, favourable supporting infrastructure and industries as well as preferential external events, government policy and vision. On the other hand, the study outlines some obstacles that should be resolved to consolidate the competitiveness of Vietnamese enterprises, including the improvements of soft skills and track records of doing business, and the tackling of the shortage of innovation process and international standards.
The paper presents an analysis with suggestions to enhance the competitiveness of Vietnamese offshore outsourcing companies in a demanding market like Japan; thus helping Vietnamese software companies in particular and the industry in general to mitigate limitations and become the top priority for major players in choice of an offshore software outsourcing location.
- © 2021 The Authors. Published by Atlantis Press International B.V.
- Open Access
- This is an open access article under the CC BY-NC license.
Cite this article
TY - CONF AU - Tran Hong HANH PY - 2021 DA - 2021/12/07 TI - Competitiveness of Vietnamese Offshore Software Outsourcing Companies in the Japanese Market BT - Proceedings of the International Conference on Emerging Challenges: Business Transformation and Circular Economy (ICECH 2021) PB - Atlantis Press SP - 543 EP - 558 SN - 2352-5428 UR - https://doi.org/10.2991/aebmr.k.211119.049 DO - 10.2991/aebmr.k.211119.049 ID - HANH2021 ER -