business news in context, analysis with attitude

Excellent piece in the January 13, 2003, issue of The New Yorker, entitled “The Tastemakers.”

The piece purports to be a brief but pithy examination of how Starbucks has managed to continue growing despite the tough economy. But it also makes a larger point about business that seems worth emphasizing:

“Broadly speaking, there are two ways to build a business,” according to writer James Surowieki. “You can give people what they want but give it to them more efficiently, as Wal-Mart and Dell have done. Or you can persuade them to want something they didn’t previously want, as Starbucks has done. One might call this the tastemaker approach.”

Successful tastemakers, the piece notes, “tend top have history’s wind at their backs.” And, they are right on in terms of defining a business and then executing it, they can be “powerful engines of economic growth.”
KC's View:
Here are the questions that this New Yorker piece makes us ask:

• Since Wal-Mart has the first approach to business pretty much sewn up, does the retailer competing with Wal-Mart have any choice but to take the tastemaker approach?

• Is the food retailing business doing enough to create tastes, has opposed to simply responding to obvious and existing consumer trends?

Simple questions. But we’re not sure the answers would be reassuring -- to anyone without a home office in Bentonville, that is.