How companies can create, dominate a market: Guest view
Ever heard of the Patagonian toothfish? No? Don't worry — most haven't.
In 1977, a struggling fish wholesaler named Lee Lantz traveled to a South American fishing village. Searching for a way to reinvent his business, he discovered the mouthwatering Patagonian toothfish. Right away, Lee saw a market opportunity — and a problem with calling it toothfish. He decided to rename the fish “Chilean Sea Bass.”
In doing so, he created a completely new revenue stream for his business. What Lee did is called “market invention,” and it put his business on top of the competition.
Just like the Chilean Sea Bass, our region is bustling with examples of market invention. We scoured the area, from Lancaster and Reading to York and both shores of Harrisburg, to uncover Patagonian toothfish opportunities for you. Our methodology asked three primary questions. First, is there a bigger opportunity where a local company can lead globally? Second, is there a significant amount of new revenue? Third, are there local opportunities for small businesses?
Here are the 2018 top market invention trends for Central Pennsylvania executives and businesses to explore.
1. Esports: It’s official: esports (competitive video gaming) is promptly becoming the largest globally viewed sport. The Intel Extreme Masters World Championship surpassed 46 million viewers in 19 languages, according to Business Insider. And by 2020, Newzoo expects the esports industry to grow to $1.5 billion. Last year, Harrisburg University announced a new esports varsity team. In doing so, HU has invented its own market. It is now positioned to become the Notre Dame of esports, offering 15 scholarships and being coached and directed by two professional athletes. The Whitaker Center has taken the lead as one of the largest esports venues and training centers in North America. Other regional colleges are jumping aboard the trend as well, such as Lebanon Valley College.
2. Cannabis: In 2017, cannabis revenue surpassed $1 billion in Colorado alone — that’s $247 million in new tax revenue for the western state. With the medicinal cannabis law that was recently passed in Pennsylvania, there is a bevy of opportunities for market invention. The first greater Harrisburg dispensaries are slated to open in April of this year with Lebanon Wellness Center, Organic Remedies, Firefly Dispensaries and Cansortium Pennsylvania. Now that the first dispensaries and growers have been awarded state permits, there are countless opportunities in the infrastructure surrounding the nascent industry. Credit unions in Washington, Oregon, Colorado and Maryland have started lending and accepting deposits from related cannabis businesses, while other companies are making fortunes by offering packaging and other services.
3. Smart factory: Smart factory, or factory automation, has become the biggest trend in production. With the Trump administration pushing for more U.S. manufacturing, companies are looking to remain competitive globally through increased efficiency. With this new trend comes great opportunity to supply products and services for the industry. Greater Harrisburg companies, such as PennAir, are among the first market inventors to supply robotics, hydraulics and manufacturing design services for the smart factory trend throughout the Mid-Atlantic.
4. Senior living: Pennsylvania now ranks fifth in the U.S. for numbers of people 65 and older. For the greater Harrisburg region, that’s approximately 340,000 potential customers. Many associate “senior living” with assisted living facilities, but the market invention opportunity is much larger. As the baby boomer generation gets older, opportunities emerge for in-home care, mobility, entertainment and products that maintain the quality of life to which boomers are accustomed. Pride Mobility is leading in the personal mobility category, while Rabbit Transit, 3P Ride and Lebanon Transit have created transportation solutions catered to senior living. Lancaster REC Fitness has tailored fitness and recreational programs for active boomers.
5. Freight automation: In 2015, Daimler unveiled its autonomous Freightliner truck. Last year Tesla, Uber and others did the same. In the U.S., the total freight shipping industry exceeds $719 billion in revenue, with a shortfall of nearly 50,000 drivers, according to Wired. Rock Real Estate states that this affects approximately 48,000 employees across distribution and warehousing in the greater Harrisburg region. One transportation market inventor in the Central Pennsylvania area is leading the field by catering to its drivers and paving the way for a successful integration of drivers with autonomous freight and technology.
Market invention comes in many forms for businesses. It could be a new channel to market, a new product, a new service or just smart brand positioning. Regardless, for those bold enough to pursue their Patagonian toothfish, the rewards are massive. Research shows that market inventors own 90 percent of markets they create, giving them a five-time higher valuation and two-time better margins than the competition.
Adam Vasquez is the president and CEO of Merit, a marketing firm based in Harrisburg. Several organizations named above are clients of the firm: Harrisburg University, Whitaker Center, Lebanon Transit and PennAir.