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Starbucks’ Schultz played a hunch

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in Leaders & Managers

Howard Schultz, later to become CEO of Starbucks, was traveling in Italy when he noticed something: Italians carried a passion for their strong coffee and the local coffee bars that served it.

That’s when it hit him: “If it works in Italy,” Schultz thought, “why not at home, too?”

Of course, that flew in the face of traditional business wisdom: giving customers what they ask for, not what they “should have.” Instead, Schultz wanted to educate American consumers and offer them something better than the traditional cup of American coffee they were accustomed to. A hard sell, but he sensed opportunity. By offering the kind of dark-roasted coffee Americans were not used to, he could create a sense of discovery, excitement and, he hoped, loyalty. In other words, he could create a new market instead of trying to muscle into an older one.

Schultz’s success hinged on his belief that American consumers were more sophisticated than other companies believed. It was a risky strategy for sure, but he took it.

Of course, what appeared at first to be a niche market for strong Euro-styled coffee quickly appealed to more people than anyone thought possible. And the rest is history.

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