Samishi Business Theory

Samsung has realized that hot products can fetch higher prices, because they are exclusive and prized by early adopters.

Yun Jong Yong has a vivid way of describing his survival strategy in today's hypercompetitive consumer-electronics market, where today's hot-selling novelty can become a cheap commodity within months. The vice-chairman and CEO of Samsung Electronics calls it the "sashimi theory." When prime fish is first caught, it's very expensive at a top-notch Japanese restaurant. If some of the fish is left over, it sells the next day for half the price at a second-tier restaurant. By the third day, it goes for one-fourth the price. "After that," Yun says, "it's dried fish."

The bane of retailing is that once something becomes common, margins recede because noone wants to pay a premium for something everyone can have.