1,200 products – focus on niche architecture and customers that value unique, high quality over commodities The capability to tailor products to precise customer needs has generated a positive synergy for Samsung allowing the company to charge a premium for their niche component architecture. This competence of creating over 1,200 different products has given rise to a series of interrelated reactions that are hard to imitate (inimitable) by others but are continually replicated by Samsung (appropriable).
In this practice Samsung has developed close relationships with customers that are relying on Samsung as a partner in the development of specific memory and speed characteristics leading to important cost and time reductions for customers in their development process. Measuring this monetary advantage might provide a better insight that in this high tech environment the direct price of Samsung? s product might not be the most important factor. Customers seek to work with Samsung in projects where they need support in the development of special characteristics that are not provided by the general alternative.
This characteristic allows Samsung to charge a premium price for customer support throughout the product lifecycle. The inimitability factor of this niche market is based on the fact that to provide more you need a higher contribution margin, since competitors are focusing solely on price resources would be limited and the level of customization would have to be reduced. By providing a customized product that meets the desired characteristic of each customer, Samsung is also able to exploit the fact that customers see them as collaborator improving the company? s reputation while strengthening the cultural bond between customers and Samsung.