Building the IOT software development strategy for vietnam innovation value added services co , ltd during period 2019 – 2024

This is the main reason for the author to choose the topic "Building the IOT Software Development Strategy for Vietnam Innovation Value Added Services Co., Ltd.. The manager will learn h

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

HÀ NỘI - 2019

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

Chuyên ngành: Quản trị kinh doanh

Mã số: 60 34 01 02

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: PGS.TS HOÀNG ĐÌNH PHI

HÀ NỘI - 2019

DECLARATION

The author confirms that the research outcome in the thesis is the result of author’s independent work during study and research period and it is not yet published in other’s research and article

The other’s research result and documentation (extraction, table, figure, formula, and other document) used in the thesis are cited properly and the permission (if required) is given

The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business and Management, and the laws for above-mentioned declaration

Date………

I would also like to thank all lecturers at HSB, who have given me the knowledge and enthusiasm, helping me to complete this thesis It has been an honour and pleasure to know them

Finally, I would like to express my deepest gratitude to my Father, Mother, my Wife and my two little babies for their strong support in pursuing

CONTENT

ABBREVIATION i

LIST OF TABLES ii

LIST OF FIGURES iii

INTRODUCTION 1

CHAPTER 1 BASIC THEORY ON DEVELOPMENT STRATEGY 6

1.1 THE BASIC CONCEPTS 6

1.1.1 Strategy 6

1.1.2 The necessity of building strategy 9

1.1.3 Levels of strategy 11

1.1.4 Definition of strategic management 12

1.1.5 Process of building strategy 14

1.2 THEORETICAL TOOLS 15

1.2.1 Porter five forces’ framework 15

1.2.2 IFE & EFE matrix 18

1.2.3 SWOT matrix 21

1.3 INTERNET OF THINGS (IOT) 23

1.3.1 IOT Concept 23

1.3.2 Internet of Things review 24

CHAPTER 2 ANALYSIS AND DESIGN OF IOT SOFTWARE DEVELOPMENT STRATERY FOR VIETNAM INNOVATION VALUE ADDED SERVICES Co., Ltd DURING PERIOD 2019 – 2024 28

2.1 COMPANY’S CURRENT SITUATION ANALYSIS 28

2.1.1 About Vivas 28

2.1.2 Major products of the company 29

2.1.3 Financial information 30

2.1.4 Vivas IOT Technology Center and SCP Platform 31

2.1.5 IT Software Industry Background 35

2.1.6 Agricultural production in Vietnam 36

2.1.7 IoT applications in agriculture 39

2.2 STRATEGY ANALYSIS 41

2.2.1 Porter’s Five forces framework Analysis 41

2.2.2 Summary of interview and the survey 44

2.2.3 External Factors Evaluation 51

2.2.4 Internal Factors Evaluation 58

2.2.5 SWOT Matrix 64

2.3 BUILDING THE STRATEGIES 65

2.3.1 SO strategies 65

2.3.2 ST strategies 66

2.3.3 WO strategies 67

2.3.4 WT strategies 68

CHAPTER 3 PROPOSAL OF SOLUTIONS 69

3.1 MISSION, VISION AND CORE VALUE 69

3.2 GENERAL SOLUTIONS 69

3.3 SPECIFIC SOLUTIONS 70

3.3.1 Product solutions 70

3.3.2 Human resource solutions 72

3.3.3 Improve product implementation process 72

3.3.4 Problems may be encountered during implementation 74

CONCLUSION, LIMITATION AND IMPLICATION 76

1 Conclusions 76

2 Limitations 77

3 Implications 77

REFERENCES 78

ABBREVIATION

Sr No Abbreviation Full form

1 AI Artificial Intelligence

2 APEC Asia-Pacific Economic Cooperation

3 I²oT Industrial Internet of Things

4 ICT Information and Communications

Technology

5 IOCV Internet of Things

Open Community for Vietnam

6 IOE Internet of Everything

7 IOT Internet of Things

8 IT Information Technology

10 SCP Smart Connected Platform

11 VCCI Vietnam Chamber of Commerce and Industry

12 VINASA Vietnam Software and IT Services

LIST OF TABLES

Table 1.1: Paradigms Strategy (Teece et al., (14)) 10

Table 1.2: The EFE Matrix (Hoang Dinh Phi 2015) 18

Table 1.3: The IFE Matrix (Hoang Dinh Phi 2015) 19

Table 2.1: EFE of Vivas company in IOT (Author 2019) 51

Table 2.2: IFE of Vivas company in IOT (Author 2019) 58

Table 2.3: SWOT of Vivas company in IOT (Author 2019) 64

LIST OF FIGURES

Figure 1.1: Strategic management model (Wheelen & Hunger 2006) 14

Figure 1.2: Four elements of strategic management (Wheelen & Hunger 2006) 14

Figure 1.3: Porter five forces’ framework (business-to-you.com 2016) 16

Figure 1.4: SWOT analysis (Hoang Dinh Phi 2015) 22

Figure 1.5: IoT viewed as a network of networks (Cisco IBSG 2011) 24

Figure 1.6: Billions of Internet-Connected Devices (MIT Technology Review 2014) 25

Figure 1.7: The Digital Universe in 2020 (IDC 2012) 26

Figure 2.1: Vivas turnover bar chart (Author 2019) 30

Figure 2.2: Vivas profit line graph (Author 2019) 31

Figure 2.3: SCP Highlights (Source: VNPT Technology 2018) 32

Figure 2.4: Overall model of VNPT Technology's Smart Connected Platform (Source: VNPT Technology 2018) 33

Figure 2.5: SCP main characteristics (Source: VNPT Technology 2018) 34

Figure 2.6: Number of households and enterprises in Agriculture (Author 2019) 37

Figure 2.7: Greenhouse distribution chart (Author 2019) 38

Figure 2.8: potential and useful applications for smart agriculture (Author 2019) 39

INTRODUCTION

1 Rationale

One of the key words in the IT industry in 2017 and the first half of

2018 is Internet of Things (IOT) IoT is constantly mentioned in technology seminars, economic forums or dialogue programs At Consumer Electronics Show 2014 (CES), former Cisco chief executive John Chambers predicted the Internet of Things would be a $19 trillion market over the next several years Other estimates are not far off In 2013, McKinsey (an American worldwide management consulting firm) report estimated various IoT applications could have an economic impact about $11 trillion a year by 2025

During the APEC 2017 Summit, one of the most discussed topics is whether IoT will replace human labour Basically, IoT cannot replace people, but IoT will help people optimize their workforce, make the hard work become easier It does not mean that people will stomp on the spot It means that people must become smarter, more knowledgeable to master the technology

Following the general trend in the world, there are quite a few companies in Vietnam focusing on developing smart technology solutions and products based on IoT There are some familiar names that have been well received by the market recently such as Lumi, BKAV SmartHome One thing

in common among these suppliers is that they focus on smart home appliances (Smart Home), and target to customers who are willing to spend money to facilitate their house These products are focusing invested in designs in order

to make the house more luxurious The IoT is not only applied in Smart Home but also in many areas such as health, transportation, environment, agriculture and so on

In July 2011, the Vietnam Innovation Value Added Services Co Ltd (VIVAS) was officially established under VNPT Technology Joint Stock

Company, a member of VNPT Group As a software engineering company, Vivas has already owned a few traditional software products However, in the current situation, it is essential for a company to create positive changes to keep

up with the trends of technology Therefore, the company’s board of management has chosen IoT as an important field to invest and develop The goal of company is: “We strive to bring Internet of Things technology to every sector, every field, to contribute to a better life for people” To achieve that goal,

it is imperative to build a medium and long-term strategy to ensure the survival and sustainable development of the company This is the main reason for the author to choose the topic "Building the IOT Software Development Strategy for Vietnam Innovation Value Added Services Co., Ltd during period 2019 – 2024"

2 Overview of Previous Researches

Over the past few years, the Internet of Things (IoT) has gradually become a new technology field, attracting the attention and discussion of many people from technology areas to business areas Over the world, it seems that each passing week, there is a business standing out to announce their decision to implement a new IoT strategy

There are many researches on IoT in general and building IoT strategies for businesses in particular The most famous of these studies is the book

“Building the Internet of Things” by Maciej Kranz (1), Vice President and

General Manager of Corporate Strategic Innovation Group at Cisco This book has been translated into Vietnamese and published by Alpha book

The book discusses about the impact and spread of IoT and the opportunities that IoT appear daily in the business life The book also points out ways to help business leaders to embark on deploying IoT to achieve short-term and long-term tangible benefits

For the managers or leaders in enterprises, the book discusses about IoT from a business, strategic, and organizational perspective, along with an illustrative example of IoT application in practice, to give the readers a clearer view

The manager will learn how to build a feasible IoT implementation plan conforming to the current orientation, strategy, and ability of the business, as well as how to successfully implement that strategy

In another study named “Abilities and orientations on the development

of Internet of Things in the World”, posted on The Science and Technology

Policy and Management Journal, Dr Bach Tan Sinh (2) (from the Institute for Science and Technology Policy and Strategy Studies) has evaluated the potential of developing IoT as well as the development trend over the world

in the period 2020 - 2025, thereby giving some suggestions on IoT development strategy for Vietnam, although the content is still macro and inclined to the general orientation

It is possible to find some thesis addressing the issue of building or orienting IoT strategies For example, in the thesis of author Mikko Kaukonen

(Lappenranta University of Technology-Finland) named "Profitability Analysis of Internet of Things Investments", the author questioned: "What are

the most important business dimensions for the IoT investment” and then pointed out the three key business dimensions that are: Building IoT ecosystem, Business models and Application areas

In another thesis by Diogo Andre Gomes “The Internet of Things - Developing a Sustainable Competitive Advantage in the Hotel Industry”

(Catolica Lisbon School of Business&Economic-Portugal), the author performed a strategic analysis of IoT’s functionalities This analysis aims to find out what resources can a hotel develop, with such IoT’s functionalities Then, the chapter "Strategic Impact of IoT in the Hotel Industry" is

developed, with the goal of analyzing what functionalities can the IoT provide, and how those functionalities can be linked to a value activity in a hotel’s value chain

It can be seen that there are some studies mentioning about building IoT strategy, however, there is no direct topic about building an IoT strategy for Vivas company Within the scope of this thesis, the author, by using different research strategies, interview and survey, and analyzing various sources, will build a software development strategy in IOT field for Vivas Strategic management is in a central position in this Thesis Books, articles, research… in area of strategic management and the ongoing evolution in IOT are also utilized to support this research

3 Aims of research

The author decided to study and apply basic theory of strategy management to build the IOT software development strategy for VIVAS during period 2019 - 2024 as well as to propose some solutions The aims of research are:

- To study the theory on strategy and the design of an IOT strategy

- To synthesize, analyze and evaluate the current situation of software

products and apply the theory to build the IOT software development strategy

5 Scope of research

Due to limited time and resources, the author can only focus on basic

assessment of Vivas’s current situation and on the IOT solution for Smart Agriculture (not included forestry, fishery and livestock)

The author uses the tools for management of strategy, the hard data from the company in the period of 2014 – 2018, and the soft data gathered by questionnaire and interview to design the strategy and to forecast for the period 2019 – 2024

6 Research methodology

Porter’s five forces framework will be used to assess certain threats that may affect Vivas’ IoT product such as threat of new entrants, threat of substitute products or services, the bargaining power of suppliers/buyers and

the intensity of competitive rivalry

The author used the basic tools such as: Internal/External Factor Evaluation (EFE, IFE) and SWOT… combined with hard data and soft data to build the IoT software development strategy

In order to conduct the study and bring the elements of answers to the problem, a qualitative approach will be adopted The author uses the sources of data from a questionnaire with 10 questions undertaken by managers and employees

7 Thesis structure

CHAPTER 1 BASIC THEORY ON DEVELOPMENT STRATEGY CHAPTER 2 ANALYSIS AND DESIGN OF IOT SOFTWARE

DEVELOPMENT STRATERY FOR VIETNAM INNOVATION

VALUE ADDED SERVICES Co., Ltd DURING PERIOD 2019 – 2024 CHAPTER 3 PROPOSAL OF SOLUTIONS

CONCLUSION, LIMITATION AND IMPLICATION

CHAPTER 1 BASIC THEORY ON DEVELOPMENT STRATEGY

1.1 THE BASIC CONCEPTS

Since the mid-twentieth century, the strategic term has been widely used in the economic field In business, as in the military, strategy bridges the gap between policy and tactics Together, strategy and tactics bridge the gap between ends and means

Strategy According to B H Liddell Hart (3)

In his book, Strategy, Liddell Hart examines wars and battles from the time

of the ancient Greeks through World War II Concluding his review of wars, policy, strategy and tactics, Liddell Hart arrives at this short definition of strategy: "the art of distributing and applying military means to fulfil the ends

of policy." Deleting the word "military" from Liddell Hart’s definition makes

it easy to export the concept of strategy to the business world

Strategy According to George Steiner (4)

George Steiner is generally considered a key figure in the origins and

development of strategic planning His book, Strategic Planning, is close to

be a bible on the subject Yet, Steiner does not bother to define strategy except in the notes at the end of his book There, he notes that strategy entered the management literature as a way of referring to what one did to counter a competitor’s actual or predicted moves Steiner also points out in his notes that there is very little agreement as to the meaning of strategy in the business world

Strategy According to Henry Mintzberg (5)

Henry Mintzberg, in his 1994 book, The Rise and Fall of Strategic Planning, points out that people use "strategy" in several different ways, the

most common being these five:

- Strategy is a plan, a "how," a means of getting from here to there

- Strategy is a pattern in actions over time; for example, a company that regularly markets very expensive products is using a "high end" strategy

- Strategy is position; that is, it reflects decisions to offer particular products or services in particular markets

- Strategy is perspective, that is, vision and direction

- Strategy is a ploy, a specific "maneuver" intended to outwit an opponent

or competitor

Strategy According to Kenneth Andrews (6)

Kenneth Andrews presents this lengthy definition of strategy in his book,

The Concept of Corporate Strategy: "Corporate strategy is the pattern of

decisions in a company that determines and reveals its objectives, purposes,

or goals, produces the principal policies and plans for achieving those goals,

and defines the range of business the company is to pursue, the kind of economic and human organization it is or intends to be, and the nature of the economic and non-economic contribution it intends to make to its shareholders, employees, customers, and communities.”

Strategy According to Michael Porter (7)

In a 1996 Harvard Business Review article, Porter argues that competitive

strategy is "about being different." He adds, "It means deliberately choosing a different set of activities to deliver a unique mix of value." In short, Porter argues that strategy is about competitive position, about differentiating yourself in the eyes of the customer, about adding value through a mix of activities different from those used by competitors In his earlier book, Porter defines competitive strategy as "a combination of the ends (goals) for which the firm is striving and the means (policies) by which it is seeking to get there." Thus, Porter seems to embrace strategy as both plan and position (It should be noted that Porter writes about competitive strategy, not about strategy in general.)

What is strategy?

What, then, is strategy? Is it a plan? Does it refer to how we will obtain the ends we seek? Is it a position taken? Or does strategy refer to perspective Lastly, does strategy refer to a pattern in our decisions and actions?

To answer these questions, the author would like to borrow the basic

definition of Assoc Prof Dr Hoang Dinh Phi (8) on strategy: a strategy of an organization or a company is a document, either written, printed or electronic,

in which the responsible people set out long-term mission, vision, core value, and strategic objective for 5 years as standard, as well as the resources to be mobilized and solutions to be implemented in order to achieve the set objectives Embodied content is included:

1 Mission

1.1.2 The necessity of building strategy

In the early stages of the formation and development of strategic management theory, many people have argued that strategy is a long-term plan, an integral part of the organization's planning system and therefore they emphasize the function of strategic planning Although there are many different studies and presentations on strategic management, the current strategic management is defined as both science and art of planning, implementing and evaluating Throughout its development, the concept of strategic management has been greatly expanded Currently, the strategic management process is a continuous process, and requires the participation of all members of the organization

The undeniable importance of strategy has been widely stressed in the literature But In fact, many businesses, especially small and medium enterprises, have little interested in strategic issues, they even do not identify themselves any strategy The main reason is they are not aware of the important role of strategy The problem is not only big businesses need a strategy, but small businesses also need it, we must to make sure that any organization or business needs a strategy The presence of strategy in the enterprise depends on the awareness of the role of the strategy as well as the knowledge of strategic science of business managers A question asked by many managers is "Why organizations really do need strategies?"

To answer this question, Mintzberg (9) explained four basic reasons for managers and scientists to better understand the important role of strategy for

an organization in general and for a business in particular According to Mintzberg, businesses need a strategy because: 1 strategy is needed to set direction for themselves and to outsmart competitors, or at least enable themselves to maneuver through threatening environments; 2 strategy is needed to focus effort and promote coordination of activity; 3 strategy is needed to define the organization; and 4 Strategy is needed to reduce uncertainty and provide consistency

From this point of view, if its strategy is good, then the organization can make various mistakes, indeed can sometimes even start from a weaker position, and still come out on top Chandler (10) asserted that: "Business is like war in one respect-if its grand strategy is correct … any number of tactical errors can be made and yet the enterprise proves successful."

According to Whittington (11) strategy work is a “serious business”, Barry and Elmes (12) called it “the most prominent, influential and costly stories told

in organizations” It is very popular in business training schools, especially for MBA degrees that strategic management is considered as one of the most core subjects

There are many theories, many researchers have developed and implemented in strategic areas, along with many different approaches to business strategy (Table 1 below) Strategic management studies often deal with key questions about how to achieve and maintain a competitive advantage (Rumelt, Schendel and Teece (13)), and in a simplified word, what

is the source of competitive advantage

Table 1.1: Paradigms Strategy (Teece et al., (14))

1.1.3 Levels of strategy

Most academics classify strategies into three levels:

Corporate strategy - what business or businesses the firm should be in?

It relates to the future formula and structure of the company and affects the rationale of the company and the business in which it intends to compete Corporate level strategy defines the business areas in which company will operate It deals with aligning the resource deployments across a diverse set

of business areas, related or unrelated Strategy formulation at this level involves integrating and managing the diverse businesses and realizing synergy at the corporate level The top management team is responsible for formulating the corporate strategy The corporate strategy reflects the path toward attaining the vision of organization

Competitive or business strategy - how each business attempts to achieve

its mission within its chosen area of activity

Here strategy is about which products or services should be developed and offered to which markets and the extent to which the customer needs are met whilst achieving the objectives of the organization

Business level strategies are formulated for specific strategic business units and relate to a distinct product-market area It involves defining the competitive position of a strategic business unit The business level strategy formulation is based upon the generic strategies of overall cost leadership, differentiation, and focus

Operational or functional strategies - how the different functions of the

business support the corporate and business strategies

They are concerned with how the various functions of the organization contribute to the achievement of strategy It examines how the different functions of the business (marketing, production, finance etc) support the corporate and business strategies Such corporate planning at the operational level is means oriented and most activities are concerned only with the ability

to undertake directions The strategies at the functional level involve setting

up short-term functional objectives, the attainment of which will lead to the realization of the business level strategy

1.1.4 Definition of strategic management

According to Wheelen & Hungers’study (15), strategic management is a set

of managerial decisions and actions that determines the long-run performance

of a corporation It includes environmental scanning (both external and internal), strategy formulation (strategic or long-range planning), strategy implementation, and evaluation and control The study of strategic management, therefore, emphasizes the monitoring and evaluating of external opportunities and threats in light of corporation’s strengths and weaknesses From the perspectives of Dess and Miller (16), strategic management is a process that combines three major interrelated activities: strategic analysis, strategy formulation and strategy implementation

From Hoskisson’s point of view (17) strategic management is primarily concerned with the actions of the organization to gain a competitive advantage and create value for organizations and partners Strategic management can also be defined as a systematic process that identifies an organization's internal and external factors to define better targets, formulate, evaluate and implement strategies to achieve the target In the above definition, there are two main points to take note: competitive advantage and value creation

In simple terms, it can be understood as a process of developing, implementing and evaluating strategies according to the figure below It is a way to gain competitive advantage for an organization Regardless of the scale, every organization needs to adopt a strategy that is best planned to survive and compete in the market and try to optimize for tomorrow following today's trend This is also the purpose of strategic management

Figure 1.1: Strategic management model (Wheelen & Hunger 2006)

1.1.5 Process of building strategy

After having an overview of strategic management, we should find out the strategy-building process Wheelen & Hunger (2006) point out strategic management consists of four basic elements These are environmental scanning, strategy formulation, strategy implementation and evaluation

Figure 1.2: Four elements of strategic management (Wheelen & Hunger 2006)

The figure above illustrates how these four elements interact To do this, first, it is necessary to analyze the current situation and understand the company's position in the market It is then possible to decide what kind of strategy is best for the company Next, put the strategies into action and see how it works If it does not work, it must be reevaluated and change another one This is a complete recycle process

1.2 THEORETICAL TOOLS

1.2.1 Porter five forces’ framework

The five forces’ framework developed by Michael Porter (18) has dominated the strategic model ever since This theory is based on the concept that there are five forces that determine the competitive intensity and attractiveness of a market Porter’s five forces help to identify where power lies in a business situation This is useful both in understanding the strength of

an organization’s current competitive position, and the strength of a position that an organization may look to move into

Strategic analysts often use Porter’s five forces to understand whether new products or services are potentially profitable It useful to understand both the strength of current competitive product situation, and the strength of an opportunity that the organization is seeking to move to By understanding where power lies, the theory can also be used to identify areas of strength, to improve weaknesses and to avoid mistakes

In the model shown in Figure 1, the five undeniable competitive forces are: 1 Threat of new entrants 2 Risk of replacement threats 3 The bargaining power of buyers 4 The bargaining power of suppliers and 5 Rivalry among existing companies Basically, the companies should find and develop a position in their industry so that they can best protect themselves against competing forces or influence on them, thereby determining whether the company can achieve competitive advantage or disadvantage In 1985, Porter

(19) also noted that the fundamental basis of being superior to competitors

and achieving long-term outstanding profits is called a sustainable

competitive advantage

Figure 1.3: Porter five forces’ framework (business-to-you.com 2016)

Each element of the framework has contributed to the industry and the

firm’s profitability

The first force, “Threat of New Entrants”: New entrants in an industry

bring new capacity and the desire to gain market share The seriousness of the

threat depends on the barriers to enter a certain industry The higher these

barriers are entry, the smaller the threat for existing players

The second force: “Bargaining Power of Buyers” is also described as the

market of output This force analyzes the degree that customers can put

pressure on the company, which also affects customers' sensitivity to price

changes Customers have a lot of power when they have finite numbers and

many alternatives to purchase Moreover, they can also easily switch from

one company to another However, buying power is low when customers

purchase products in small quantities and when the seller's products are very different from other competitors Today, the customers become more informed by Internet and therefore more empowered They can easily compare prices online, receive information on a variety of products and have access to other different suppliers immediately Companies can take measures

to reduce the power of buyers by implementing loyalty programs or by distinguishing their products and services

The third forces “Bargaining power of suppliers”: This force analyzes the power and control capabilities of the company's suppliers (also known as the market of inputs) that are capable of raising prices or reducing the quality of purchased goods or services, which in turn would reduce the potential profit

of an industry The concentration and the availability of alternative suppliers are important factors in controlling the power of suppliers The fewer suppliers there are, the more power they have When having many suppliers, businesses will have a better position The source of supplier power also includes the conversion costs of companies in the industry, the power of distribution channels, the presence of available substitutes, and the uniqueness

or the difference of product or service

In the fourth force - “Threats of Substitution”: The existence of products outside of product boundaries increases the tendency of customers to switch

to alternative products To anticipate these alternatives, businesses not only look at similar products of different competitors’ brands but also all products that serve similar needs of customers

The last force is the intensity of “rivalry among existing competitors" This last force of the Porter’s Five Forces examines the current level of competition

in the market, which is determined by the number of competitors and the ability

of each competitor The competition is high when the industry grows slowly, when there are many competitors of similar size and strength, and when

consumers can easily switch to a competitor with low cost The concentration ratio of an industry is a good indicator of competition The lower this ratio is, the more intense competition will be When competition is high, competitors may be pushed in advertising and prices wars, which could hurt business profits In addition, the competition will be more intense when the barrier escapes from the industry, forcing companies to stay even though profit margins are falling Barriers to exit can be long-term loan agreements and high fixed costs

To sum up, in view of the above, the Porter's five forces model sets a broad context for strategic thinkers by determining the attractiveness of industry structure as the main factor determining profitability of the company This framework shows that by carefully analyzing an industry structure force, the company will be able to assess and determine its profitability in line with the industry's profitability, especially at an early stage when entering the market, and thereby, protect its competitive position with the aim of achieving a sustainable competitive advantage

1.2.2 IFE & EFE matrix

Internal Factor Evaluation (IFE) Matrix: is a strategy tool used to evaluate

firm’s internal environment and to reveal its strengths as well as weaknesses

Table 1.2: The EFE Matrix (Hoang Dinh Phi 2015)

1 Threat 1

2 Threat 2

3 …

Total

External Factor Evaluation (EFE) Matrix: is a strategy tool used to

examine company’s external environment and to identify the available opportunities and threats

Table 1.3: The IFE Matrix (Hoang Dinh Phi 2015)

Key External and Internal Factors

EFE Matrix: When using the EFE matrix we identify the key external

opportunities and threats that are affecting or might affect a company Where do

we get these factors from? Simply by analyzing the external environment with the tools like PEST analysis, Porter’s Five Forces or Competitive Profile Matrix

IFE Matrix: Strengths and weaknesses are used as the key internal factors

in the evaluation Raising questions about what we do better or have more valuable than our competitors to find our strengths and about and about which areas of our company we could improve or at least catch up with the competitors to find our weakness

Weights

Each key factor should be assigned a weight ranging from 0.0 (low importance) to 1.0 (high importance) The number indicates how important the factor is if a company wants to succeed in an industry If there were no weights assigned, all the factors would be equally important, which is an impossible scenario in the real world The sum of all the weights must equal 1.0 Separate factors should not be given too much emphasis (assigning a weight of 0.30 or more) because the success in an industry is rarely determined by one or few factors Weights have the same meaning in both matrices

Ratings

The meaning of ratings is different in each matrix

EFE Matrix: The ratings in external matrix refer to how effectively

company’s current strategy responds to the opportunities and threats The numbers range from 5 to 1, where 5 means a good response, 4 – above, 3 – average, 2 – below average and 1 – poor response Ratings, as well as weights, are assigned subjectively to each factor

IFE Matrix: The ratings in internal matrix refer to how strong or weak each

factor is in a firm The numbers also range from 5 to 1

Weighted Scores & Total Weighted Score

The score is the result of weight multiplied by rating Each key factor must receive a score Total weighted score is simply the sum of all individual weighted scores The firm can receive the same total score from 1 to 5 in both matrices The total score of 2.5 is an average score In external evaluation a low total score indicates that company’s strategies are not well designed to meet the opportunities and to defend against threats In internal evaluation a low score indicates that the company is weak against its competitors

1.2.3 SWOT matrix

SWOT analysis involves the collection and portrayal of information about internal and external factors which have, or may have, an impact on business SWOT is a framework that allows managers to synthesize insights obtained from an internal analysis of the company’s strengths and weaknesses with those from an analysis of external opportunities and threats

Figure 1.4: SWOT analysis (Hoang Dinh Phi 2015)

SWOT is an acronym which stands for:

Strengths: factors that give an edge for the company over its competitors Weaknesses: factors that can be harmful if used against the firm by its

competitors

Opportunities: favorable situations which can bring a competitive

advantage

Threats: unfavorable situations which can negatively affect the business

Strengths and weaknesses are internal factor of the company and can be directly managed, while the opportunities and threats are externals and the company can only anticipate and react to them SWOT is widely accepted tool due to its simplicity and value of focusing on the key issues which affect

the firm The purpose of SWOT is to identify the strengths and weaknesses to take better advantage of opportunities and suffer slightly from the threats

1.3 INTERNET OF THINGS (IOT)

1.3.1 IOT Concept

Recently, the term "Internet of things" (IoT) has attracted a lot of attention

of the technology world The explosion of IoT in the future will have a strong impact on human life, work and society

In fact, the concept of Internet of things appeared many decades ago However, until 1999 the new IoT phrase was created by Kevin Ashton, a scientist who founded the Auto-ID enter at MIT, which establishes global standards for RFID (the Wireless communication using radio waves) as well

as several other sensors

According to Ovidiu Vermesan & Peter Friess (20), IoT is a concept and a paradigm that considers pervasive presence in the environment of a variety of things/objects through wireless and wired connections and unique addressing schemes can interact with each other and cooperate with other things/objects

to create new applications/services and reach common goals In this context, the research and development challenges to create a smart world are enormous A world where the real, digital and the virtual are converging to create smart environments that make energy, transport, cities and many other areas more intelligent

As describe by Klaus Shwab (21), one of the main bridges between the physical and digital applications enabled by the fourth industrial revolution is the internet of things (IoT) –sometimes called the “internet of all things” In its simplest form, it can be described as a relationship between things (products, services, places, etc.) and people that is made possible by connected technologies and various platforms

IoT refers to the interconnection of uniquely identifiable embedded computing-like devices within the existing Internet infrastructure Typically, IoT is expected to offer advanced connectivity of devices, systems, and services that goes beyond Machine to Machine communications and include the domains, protocols, and applications as shown in Figure 2 below as researched by Cisco IBSG (Internet Business Solutions Group) team

Figure 1.5: IoT viewed as a network of networks (Cisco IBSG 2011)

1.3.2 Internet of Things review

The impact of IoT is very diverse, in many areas such as: infrastructure management, health, construction and automation, transportation One example is, in the health sector, IoT devices can be used to enable remote health monitoring and emergency notification systems Health monitoring devices can range from blood pressure and heart rate monitor to advanced devices, such as pacemakers or advanced hearing aids Special sensors can also be equipped in living space to monitor old people and so on

Siemens (22) in its forecasts has predicted that by 2020, 26 billion objects/devices will be connected via internet, which is in line with business consulting firm Gartner ABI Research (23) estimates that more than 30 billion devices will be wirelessly connected to the Internet of Things by 2020 This number is also predicted by international market research and consulting firm International Data Corporation (IDC) who has estimated that 32 billion objects/devices will be connected to the Internet by 2020 and they will produce 10% of all data generated worldwide A recent MIT Technology Review’s study predicts 28 billion Internet connected things as shown in the Figure below

Figure 1.6: Billions of Internet-Connected Devices (MIT Technology

Review 2014)

Whether it's 26, 28, 30, or 33 billion – when the number of devices and sensors connected to the network increases, they will create an ever-increasing amount of data that will have to be collected, analyzed and stored

as shown in the image below

Figure 1.7: The Digital Universe in 2020 (IDC 2012)

According to Analytics Insight (24), in 2018, organizations in Asia-Pacific have already installed more sensors, cameras and other connected devices this year, spent as much as US$291.7 billion on the Internet of Things (IoT), according to research firm IDC This increased by 12.1 percent over last year’s expenditure of US$260.1 billion IDC does not include Japan in its Asia-Pacific market predictions In 2018, China accounted for 64.2 percent of the spending, followed by Korea at 9.8 percent and India at 8.8 percent This region is the leader in IoT spending, accounting for more than 40 percent of the total worldwide IoT expenditure in 2018

From Microsoft point of view (25), the Internet of Things (IoT) is not just a futuristic trend; it’s the first step toward becoming a truly digital business With an IoT strategy in place, it can make business thrive The following top

10 benefits of IoT as defined by Microsoft Corporation below will be used to build the business plan & strategy for new and existing organizations:

1 Start with your things (Line-of-business assets and the data they

produce, your

Cloud Services, and your Business intelligence tools)

2 Get more out of your existing assets (Employees and Customers)

3 Make small changes, see a big impact

4 Improve efficiency

5 Connect any asset

6 Enable innovation

7 Increase agility

8 Build the ability to scale

9 Transform your business

10 Choose an enterprise-proven IoT partner

CHAPTER 2 ANALYSIS AND DESIGN OF IOT SOFTWARE DEVELOPMENT STRATERY FOR VIETNAM INNOVATION VALUE ADDED SERVICES Co., Ltd DURING PERIOD 2019 – 2024

2.1 COMPANY’S CURRENT SITUATION ANALYSIS

2.1.1 About Vivas

Formerly known as the IP Excellence Center of Alcatel Network System Vietnam (ANSV) - a joint venture between VNPT Group and Alcatel-Lucent Group since 1993, VIVAS inherited 18 years of experience in telecommunication and information technology Officially established in July

2011, since then, VIVAS has been providing diverse telecommunications and information technology solutions and services to partners and customers, participating in building a modern society, connecting to the future

Vivas always strives to build a humane working environment with a corporate culture based on encouraging teamwork spirit (team working and cross-team working), where individuals share information, support each other This is the foundation for stimulating and inspiring creativity in research activities, and technological development

Vivas owns the enthusiastic staffs with high qualification and strong foreign languages skills, professional management and working styles inheriting from the joint venture with leading technological group: Alcatel Lucent (between France and America) This help create the core value of the company which help Vivas develops sustainably

The major business areas of VIVAS include:

- Research and develop information and communication technology, telecommunications solutions, develop digital content

- Trading in information and communication technology, telecommunications services, digital content business

- Trading in leasing services for management, operation and maintenance the system

- Providing online payment services and payment by mobile devices

- Trading in advertising and mobile communication services

2.1.2 Major products of the company

Content Delivery Network: is a network of multiple servers located in many

different geographical locations, working together to deliver content to end users

in the fastest, and most reliable and secure way with optimal cost The solution allows the end user to automatically connect to the nearest storage server, instead

of having to connect to the original server of the Content Provider

Wi-Fi Service Management Platform: Wi-fi SMP is a solution including

Authentication (EAP SIM / AKA & non-EAP SIM), Billing, Fixed Ports, Location Services, User Analysis, Mobile Applications and Integration Mobile core The solution is divided into 3 functional planes including: Management Plane, Control Plane and Data Plane Wi-fi SMP is highly compatible and supports innovative business models and values when used for telecom operators and smart cities

OTT Communication Platform: is an OTT platform that helps provide

high quality VoIP calls (Including voice and video) and messages (Text messaging, multimedia sharing) via 3G / 4G & Wi-fi

Multimedia Streaming Platform: is the solution that allows businesses to

manage, trade and distribute live TV, Video, Radio, Music, Movies content

to users in a focused and best quality way

Dealer Management Solution: is a solution that connect products and

services with a distribution network including general agents, agents, direct sales to manage, promote and sell products, services

SMS Marketing Solution: is a marketing solution through text messages,

whereby the brand of the business and organization will be displayed in the

sender of the message, instead of the usual number display Currently, the solution allows sending customer care messages and advertising messages

Campaign Management System: is built on Precision Marketing solution

to help businesses and operators collect and analyze multi-dimensional data based on customer behavior The solution allows communication messages to

be delivered to the right customers, at the right time, with the highest efficiency

Mobile VAS services: that's all the out of standard voice calls services

designed to bring practical benefits to mobile phone users such as: ring-back tone, miss call alerts, online game and so on

Big data analytics: data analytics technologies and techniques provide a

means to analyze data sets and draw conclusions about them to help organizations make informed business decisions Driven by specialized analytics systems and software, as well as high-powered computing systems,

big data analytics offers various business benefits

Profit

Figure 2.2: Vivas profit line graph (Author 2019)

From the financial accounting perspective, the figures and numbers show that the company has been operating well in recent years There has been almost an increase year by year toward the firm’s revenue and profitability in the last 5 years In 2017, there is a slowdown compared to 2016 when the revenue and profit of the company were reduced, but the decline was still within the allowable range and this was anticipated by the senior board management of the company It is proved in 2019 when the company has experienced tremendous growth in production and business

2.1.4 Vivas IOT Technology Center and SCP Platform

Vivas formed a new department in 2016 for IoT, Big Data and System Integration Solutions The goal is to be recognized as a market-leading company for new IoT products and services by providing good quality products, on-time delivery and reducing costs for customers

In the first step, Vivas IOT Center collaborated with VNPT Technology to develop the Smart Connected Platform (SCP) solution (https://thingxyz.net)

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