Purpose The purpose of this paper is to set a strategic model for localization through a theoretical background of localization, examined the current situation of Korean SMEs' direct investments in the Vietnamese market.
Methods This paper examined the current situation of Korean SMEs' direct investments in the Vietnamese market, the types of business conducted by Korean SMEs, and the trends and characteristics of the business types, and analyzed success and failure cases of localization by Korean SMEs. In addition, this study separately compared and analyzed the aspects of business management functions of localization related to production, sourcing, human resources, marketing, and R&D, which are the elements of the strategic model that set the aforementioned cases, harmonious relations with the local community, and the transfer of the authorities of the head offices to local subsidiaries.
Results According to the results of the analysis of the cases of Korean SMEs, which have entered Vietnam and have been carrying forward business, with regard to the localization of production and sourcing, most of the companies presented as examples established production plants and stores in Vietnam to promote the localization of production and sourcing.
Conclusion Hereafter, for Korean SMEs to remain successful in the Vietnamese market, they should carry out business management that fits the spot, understand the local sociocultural environment and corporate culture, and carry out information exchange with mutual participation of the head office and local subsidiaries in making decisions.