Table of Contents

1
Executive summary................................................................................................................3
I. Clients overview..................................................................................................................3
1. Company information.....................................................................................................3
2. LightUp program:............................................................................................................4
II. Preliminary Analysis..........................................................................................................4
1. Market profile & favorable condition ..............................................................................4
2. Key competitor analysis.................................................................................................4
3. SWOT analysis...............................................................................................................6
4. Initial suggestion for market entry..................................................................................7
III. Project Plan........................................................................................................................7
References..............................................................................................................................8
Appendix...............................................................................................................................13
Appendix A.......................................................................................................................13
Appendix B.......................................................................................................................18
Appendix C.......................................................................................................................19
Appendix D.......................................................................................................................20
Appendix D.1..............................................................................................................20
Appendix D.2..............................................................................................................22
Appendix D.3..............................................................................................................24
Appendix D.4..............................................................................................................26
Appendix E........................................................................................................................28
Appendix E.1...............................................................................................................28
Appendix E.2...............................................................................................................29

2
 Executive summary

This project proposal aims to provide an overview of the strategy to support VIoT

Group to launch the LightUp service to the South Korean market. The proposal includes three

sections: Client Overview, Preliminary Analysis, and Detailed Action Plan. Some

fundamental competitive advantage and market analysis tools used throughout the project

include PESTEL, SWOT analysis, and other academic knowledge. The proposal ends with an

action plan specifying the completion time and responsibilities of each member.

I. Clients overview

1. Company information

Founded in 2017, VIoT is a pioneering startup promoting digital transformation and

developing smart city ecosystems with innovative solutions in the field of Internet of Things

(VIoT, n.d.). Currently, in addition to smart products, VIoT has completed 4 key platforms in

the smart city solution ecosystem to help serve management needs (Figure 1). With the goal

and commitment to sustainable development, VIoT is conducting a LightUp campaign based

on the Lighting as a Service (LaaS) model (Appendix B).

Figure 1:

VIoT's solution ecosystem

3
 Note. Adapted from VIoT, 2021

2. LightUp program:

The LightUp program relies on the strength of LED light 4.0 and wireless

management platform (Sejong Connected Luminaires Platform) (Appendix B). The

combination of equipment and smart platform saves up to 95% of electricity usage, reduces

maintenance costs by 80% and reduces CO2 emissions by 70% (VIoT, n.d.-b).

II. Preliminary Analysis

1. Market profile & favorable condition (See Appendix A for detailed information)

The Korean market presents huge opportunities and prospects for growth in the field

of smart lighting systems. Politically, VIoT benefits from the friendly political environment

between the two countries with many important FTAs promoting trade in products and

services. Economically, Vietnam has not exported services to Korea from 2021 (OEC, 2021),

this is an opportunity for VIoT to become one of the potential pioneers in exporting energy

services from the Southeast Asian market to Korea. Regarding society, the Korean people

and government pay great attention to environmental protection and climate change, and are

ready to pay a premium in electricity bills to reduce global warming. South Korea's

technological environment and close geographical location facilitate efficient management,

technology transfer, and smooth operation by VIoT. Finally, the Korean government also

leads the world in promoting and sponsoring initiatives to promote green economy, green

infrastructure and especially smart lighting.

2. Key competitor analysis

South Korea ranked 4 globally in the Economic Complexity Index (ECI 1.82) in 2021

(OEC, 2021). This indicates that the country is attracting global competitors exploiting the

4
smart lighting system field. The table below provides a snapshot of the competitive landscape

of the industry in South Korea. In general, the smart lighting market in Korea is fragmented

by companies operating in diverse fields from startups, SMEs to MNEs with different

competitiveness and technology levels. Therefore, businesses need to prioritize brand

positioning strategies to be able to operate smoothly in the market. Detailed analysis of

potential opponents including Signify, Seoul Semiconductors (hereafter SM) and Merlot

Laboratories will be allocated in Appendix C.

Global Market South Korea Market

Market growth & Grow at a CAGR of 19.2% Grow at a CAGR of 6.99% during

CAGR during during 2022-2029 (Fortune 2022-2026 (Technavio, 2021).

forecast period Business Insights, 2022)

Market structure Fairly fragmented Fragmented

Top market players ● Signify Holding: Parent ● Seoul Semiconductor: With a

company is Philips potential in production and R&D in

Lighting that has LED lights, it is ranked in a high

strengths in the lighting position for producing these

industry for times products (Seoul Semiconductor,

(Signify, 2018). 2022c).

● Acuity Brands Inc., ● Merlot Laboratories: Merlot

which has contributed Laboratories installed 4,300

4.12% in the global intelligent lights at CJ Logistics’

LaaS market share Jungbu Complex (Jones, 2021).

(CSIMarket, 2023) ● Hwashin Korea Co.Ltd: Company

has many international and domestic

5
 certificates for quality-checked

(Hwashin, 2023).

● LumiSpace Co., Ltd.: In January

2009, the company installed over

800 cases for LED Lighting

Solutions (List of Companies In

World Wide, 2022).

3. SWOT analysis

Table II.3: Overall SWOT Analysis

Strengths (Appendix D.1) Weaknesses (Appendix D.2)

● Advancement in using chip led, ● The operation process is mainly

which can mitigate the weight and based on the policy of the

power of each light. government

● Strong partnership with prestigious ● As an early adopter, VIoT will have

parties namely Phillips, Kerlinks, to face the challenge in operation.

Innodep. ● Weak brand recognition

● Financial capability

● Heavy reliance on partners

Opportunities (Appendix D.3) Threats (Appendix D.4)

● The LaaS market size is potential for ● Government policy allocation

the upcoming years towards lightning as a service (LaaS)

● First mover advantage since Korea is ● Inevitable violation to the legislation

6
 ranked as the top eight energy- of Free Trade Agreement (FTA)

intensive countries and is currently ● Fragmented market: fierce

in need to increase its energy competition from international rivals

efficiency. and Korean rivals.

● South Korea will move to carbon ● Lack of young laborers intended to

neutrality in 2050 and this service work in ventures.

helps to reduce CO2 emissions to

70%

4. Initial suggestion for market entry

VIoT Group provides the Sejong Connected Luminaires Platform and smart chip

LED, which can be identified as a service enabler and light lamps in the street light value

chain (Figure 2). Further explanation of entry methods is provided in Appendix E in order to

gain deeper insights into the potential outlet for VIoT to expand business.

Figure 2

Smart Lighting System Value Chain

7
Note. Adapted from Caldani, 2019

8
III. Project Plan

9
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17
 Appendix

Appendix A

Detailed Analysis of Korean’s Macro-environment

Factors Detailed information

Political ● The Korean government established a trade strategy to

access the Southeast Asian market (Zhong, 2022).

● AKFTA, signed in 2005, is a primary key for Vietnamese

businesses to do business in Korea with benefits in terms

of free trade (VCCI, 2021).

● VKFTA came into effect in 2015, which provided more

incentives in terms of commodities, services, and

investment between parties (VCCI, 2015).

➤ Inferred: Friendly political environment creates favorable

conditions for VIoT to operate smoothly in the target market.

Economic ● South Korea's infrastructure market is worth USD 55.4

billion in 2023 (Mordor Intelligence, 2023).

● Vietnam did not export any servicemas to South Korea in

2021 (OEC, 2021).

● South Korea's imported energy was US$145 billion in the

first eight months of 2022, accounting for 29.4 percent of

the overall import limit (Zhong, 2022).

● The spending on energy in the first eight months of 2022

18
 was about US$64 billion greater than the total spending

in 2021 (Zhong, 2022).

➤ Inferred: Tremendous opportunity for VIoT to become one of

the potential pioneers in exporting energy services from the

Southeast Asian market to Korea.

Social factor ● Many initiatives to help ensure public lighting for road

users and pedestrians (Shin, 2023)

● Massive GHG emissions continue to be emitted by

electricity generation as it is profoundly reliant on fossil

fuels (Figure 1).

● Lighting consumed electricity for one-fifth of total

electricity consumption in South Korea (Jones, 2021).

● 66.6% of Koreans support the energy transition and are

willing to accept a rise in electricity costs of 19.2% to

minimize the impacts of global warming (Choi, 2020).

Figure 1:

GHG Emission by Types When Generating Electricity in Korea

Note. Adapted from IEA, 2020

Technological ● South Korea’s 2 giants in semiconductor production

19
 accounting for 17% of total global market share,

Samsung Electronics and SK Hynix (Stangarone, 2023).

● At the beginning of 2023, the internet penetration rate in

Korea was 98% (Kemp, 2023).

● South Korea became the first country in the world to

deploy a statewide 5G network and market 5G services

(MSIT, 2019).

➤ Inferred: The technology environment is modern and vibrant

with high internet penetration and many semiconductor suppliers

giving VIoT more choice of partners.

Environment Figure 2.

Note. Adapted from World Atlas, n.d

● It takes 5 hours to fly to South Korea from Vietnam.

● There is an increased danger of collisions in tunnels and

on highways due to poor nighttime illumination,

particularly during the winter in Korea (Lee et al., 2021).

➤ Inferred: The proximity of South Korea to Vietnam makes it

20
 favorable for VIoT's efficient management and technology

transfer. Poor lighting conditions lead to an increased need for

smart lighting infrastructure to reduce collision

Legal ● South Korea is one of the few nations with legislation to

prevent light pollution (Guanglei et al., 2019).

● The South Korea government pursues the Korea New

Deal which aims to transform the economy from a

carbon-dependent to a green economy, with a more

inclusive society (MEF, 2020).

➤ Inferred: South Korea has no restriction for foreign companies

to invest in it so that VIoT has the supported environment to do

business easily.

Government’s projects ● The 2020 Green New Deal will allocate $188 billion for

green infrastructure, carbon-free, and decentralized

energy (OECD, 2021).

● The Seoul authority is promoting the “Smart Pole”

campaign: Which mixes road amenities like streetlights

and traffic lights with ICT technologies

● The "LED Plan 2060" is urging the South Korean

government and Seoul metropolitan government to

replace HPS lamps with LED bulbs for city street lighting

(Kim & Hwang, 2017).

➤ Inferred: The South Korean government's initiatives

encourage reinvestment in smart infrastructures, creating a

21
lucrative market for VIoT to exploit.

22
 Appendix B

Sejong Connected Luminaires System Structure (VIot, n.d.)

23
 Appendix C

Detailed Analysis of VIoT’s Potential Opponents

Products Wireless system Market position Finance

Signify Signify offers 32 Signify provides Signify goes globally In 2022, Signify
product categories wireless control with 180 countries made a revenue of
including 3D printed systems such as (Signify, 2023a) more than $8,2
lighting as well as Interact PRO billion, and
indoor and outdoor Scalable System, operational
luminaries (Signify, Interact IoT platform profitability of 10.1%
2022). and Lighting (Signify, 2023b)
Controls (Signify,
2022).

Seoul Diversified in SM does not provide SM goes globally In 2021, SM

Semiconductor lighting, with the list the smart system with $2 billion generated more than
of more than 20 integrated with expansion (Business $1 billion, and
categories, however lighting Wire, 2021) operating profit was
it is based most on 3- 4.9% (Seoul
levels-power lighting Semiconductor,
(Seoul 2022a).
Semiconductors,
2022b)

Merlot They provide various The application of Merlot has not Merlot Lab is known
Laboratories product lines ranging IoT, Dual-Stack penetrated the global for a start-up founded
from home-use to communication, market but the in 2012 and is on the
industry, and smart lighting, domestic. Merlot Lab funding stage.
infrastructure service app is the installed 4,300 According to the
(Merlot.lab, 2022a). strength (Merlot.lab, intelligent lights at financial report
2022b) CJ Logistics’ Jungbu (Merlotlab, 2023),
Complex (Jones, the increase of
2021) funding is raised to
more than $5.2
million.

24
 Appendix D

Detailed SWOT Analysis of VIoT

Appendix D.1

Strengths

The first strength of VIoT is its innovative chip LED. A normal 9 Watts LED

lightbulb can generate 22.23 kg of CO2, since it simultaneously creates heat around the

lightbulb by requiring the adapter, which causes a massive amount of power and low life

expectancy (Thomson, 2018). However, VIoT lighting products have an LED chip, which

facilitates the lightbulb to operate smoothly without the adapter as usual lightbulb has and

makes it the strength of VIoT lighting products as its unique selling point (USP).

Power Consumption Index by Bulb Type (WordPress, 2018)

25
Secondly, conventional bulbs merely have an average lifetime of 1000 hours, the lighting

products of VIoT namely AC LED Factory Light, AC LED Flood Light and AC LED Tunnel

Light offer a lifetime span of 5000 hours per light. Furthermore, VIoT correspondingly offer

5 years of warranty and zero maintenance fee.

Average Lifespan of LED Lines (University of Gävle, 2014)

The LaaS industry is currently a newly-developing industry, as VIoT Group business model

is to provide lighting solutions, the companies have developed strong partnership with many

parties in terms of operation, installation, maintenance and many more.

26
 Appendix D.2

Weaknesses

As the LaaS market has not been widely applied in Vietnam as well as many other

countries due to the existing conventional lighting system that each country has implemented

and the extravagant cost of installation. Although having early adoption in the LaaS market, it

might be hard for VIoT Group to adjust the business and lighting installation project since it

heavily relied on Korea's government approval. Moreover, as VIoT is a start-up business, the

capital and operating costs are considered as unstable and based mostly on the funding from

exogenous companies. VIoT has not had substantial brand recognition in the LaaS since

VIoT Group is a start-up, which indicated the minor market share of VIoT Group in the

market. Therefore, investing more in brand recognition for VIoT is essential in order to create

a steady reputation for VIoT before entering the Korean LaaS industry. Having many

partnerships appears to be a beneficial factor for VIoT Group, however, this has created a

dependency on these partners to fully provide VIoT service and burden on costs allocated for

human resources. Another point is that the cost of hiring outsourcing employees in Korea will

be more costly than in Vietnam due to the exchange rate. The average base salary of blue-

collar workers in Korea is 29,507,991 Won/year ($23,048.62 USD/year) (Economic Research

Institute, n.d), whereas the same occupation in Vietnam normally has the pay range of

71,129,663 VND/year ($3,021.46 VND/year) (Economic Research Institute, n.d).

Salary for Blue Collar Worker Based on Experience

(Economic Research Institute, n.d)

27
28
 Appendix D.3

Opportunities

The key driver for LaaS is the increasing demand for a sustainable lighting usage

system, which VIoT has been focused on developing for years. Followed by the emerging

market of energy efficiency in Korea, since Korea announced the energy efficiency goal to

27% by 2027 (The Korea Times, 2022). Therefore, the opportunity to expand the market

share in the Korean market is lucrative for VIoT Group. Moreover, there is a potential leap in

terms of the Lightning as the Service (LaaS) market, which was accountable for $92.31

million USD in 2020 and expected to surge up to $165.85 million USD by 2028, alongside

with the CAGR at 46.1% (Global News Wire, 2023).

In 2021, Korea was reported to possess a significant increase by 7% in energy

consumption, in particular, contributed by 3 main sources which are the industrial sector, the

residential areas and commercial factors. These aforementioned factors resulted in higher

heat generation and changes in weather.

Therefore, there is an urgent demand according to the 10th Basic Plan for Long-Term

Electricity Supply and Demand, which stated the government of Korea currently takes into

consideration aiming for a 31% renewables generation target share by 2036 (U.S. Energy

Information Administration, 2023). Moreover, South Korea will move to carbon neutrality in

2050 and the LaaS service can contribute significantly to reduce CO2 emissions to 70% in

Korea (Nam-Woong, 2022). The call from Korean authority creates the opportunity for VIoT

to gain first mover advantage in providing solutions with cutting edge technology and well-

developed service with more affordable price for LaaS market in this country.

29
South Korea's Energy Generation by Source during 2012-2021

(U.S. Energy Information Administration, 2023)

30
 Appendix D.4

Threats

The identification and assessment of risks play a vital role in saving costs, effective

addresses, and ensuring a successful project operation (George, 2020). LaaS has been an

emerging service in the past few years, and along with opportunities are potential external

challenges that VIot may face when exporting services.

Risks Discussion

Political conflict ● Political unrest throughout the world causes a "funding winter" for

startups, threatening the world's general economic condition and the

financial status of startups since venture capitalists will limit capital

sources and reduce resources from committed investments (Hà,

2023).

Government ● All of the lighting usage purposes including street lights, lights for

policies/Legal security, and landscape in South Korea are required to have approval

factors from the Seoul Metropolitan Government before implementation

(Park et al, 2017).

● Market protectionism from the Korean government

● Inevitable violation against the VKFTA legislation

Fragmented ● Competition plays a key role in determining market outcomes, and it

market/Numerous affects inclusiveness in multiple ways (Cherif & Hanasov, 2021).

competitors ● On a global scale, there are many giant competitors with huge capital

and years of experience in the field and capable of self-

manufacturing LEDs and integrating software (Signify Holding,

31
 Acuity Brands, OSRAM).

● VIoT group might face problems related to revenue distribution

made by existing competitors in the Korean market (Merlot

Laboratories, Hwashin Korea Co.Ltd, LumiSpace Co., Ltd, and

Seoul Semiconductor).

Human ● Human resources shortage is one of the major challenges faced by

risks/Intellectual technology startups (Vy, 2023).

risks/Quality ● Young South Koreans are merely fleeing away from risky and

assurance unrewarding jobs (Häzaq, 2023) while engineering including

electricians, electronics technicians, and mechanics is the most

demanded job in Korea (Wage Centre, 2023).

● Hiring an outside contractor to install equipment poses the risk of

exposing intellectual property.

● Lack of continuous control over product quality and longevity as

well as customer experience due to outsourcing human resources to a

contractor.

32
 Appendix E

Detailed Information for Initial Suggestion of Market Entry

Due to the lack of brand recognition and market share, the market entry of VIoT will

be divided into 2 phases, of which the first stage is entry as a joint venture and second stage is

licensing.

● Phase 1: Why the company should joint venture? VIoT entering the Korean LaaS

market via collaboration with other prestigious enterprises facilitates enhanced brand

awareness to VIoT Group without having to build the reputation as a separate entity,

which is less effective and cost bearing. VIoT Group has developed partnership with

L&S LED, which is a Korean start-up established in 2015 in manufacturing and

supplying lightning LED products (L&S LED, n.d.). This partnership forms easier

existing strategic alignment as well as more time-efficient since VIoT Group has

already comprehended the strengths of L&D LED, which help to support introducing

the service of VIoT to the Korean market more efficiently.

● Phase 2: Why the company should licensing? In order to gain more brand

awareness, licensing will be a cost-effective outlet for VIoT to penetrate into the

market. Moreover, this method provides a strategic methodology for VIoT to extend

the customer target segment and increase the brand identity without the support of

budget allocation and investment for manufacturing, products and workforce

distribution, and marketing.

33