Analysis of Competitiveness of Korean and Vietnamese Automobile Industry: Focusing on Porter’s Diamond Model

Purpose: The purpose of this paper is to establish a development strategy for the Vietnamese automobile industry using the development process of the Korean automobile industry as a model. To this end, Michael Porter’s Diamond Model is used to compare and analyze the international competitiveness of the automobile industry in Korea and Vietnam to derive meaningful results. Research design, data, and methodology: This study has examined the classical theories related to competition theory of Porter’s Diamond Model, the authors will present the analysis of Korea and Vietnam’s automobile industry with 4 main factors: Factor Conditions, Demand Conditions, Related and Supporting Industries, and Firm Strategy, Structure, and Rivalry. The authors establish research model through literature reviews and data was collected from reliable official sources of two countries and international organizations. The analytical method is normalize the data and assign an index value of 100 to the country with the higher data value, from which the index value of the other country is calculated. The value of each of the four determinants factors is the average of the dependent factors. Results: As a result of the analysis, it was found that the international competitiveness of the Vietnamese automobile industry has competitiveness in terms of demand and support industries, and that international competitiveness, including factor conditions, corporate strategies, structures, and competition, is low. On the other hand, the international competitiveness of the Korean automobile industry was greater than that of Vietnam in the four determinants as expected. Implications: Strategic implications for the development of the Vietnamese automobile industry were presented focusing on the four determinants based on the analysis results. In conclusion, in order to develop the automobile industry, balanced growth in all fields of the country is necessary. In addition, if t he state has a firm will, necessary or insufficient factors can be achieved through cooperation with foreign companies.