The Siiquent-Teomik Merger: Redefining Revenue Models
Isolde Kraft leads Siiquent and targets hospitals and large diagnostic labs whereas Emmanuel Geiger leads Teomik and targets research labs and universities. Siiquent uses a model similar to the razor blade: sell products for cheap and make a profit on recurring charges (in this case test kits, and chemical compounds instead of the instruments themselves). This works for Siiquent due to the financial constraints their target customers often face. Contriarly, Teomik uses a high-margin model in which they sell their product at a premium price. This model works for Teomik since their target customers are large labs and universities. Scherr is merging both companies. The question is how given their different business models?
Single vs. Multiple Revenue Models: Weighing the Pros and Cons
Peter Noll (from Scherr) has to decide whether or not a single model is possible for this merger. Mr Noll is compelled to come up with one model but due to the difference in target customers between the two companies; he needs help to figure out a shared model or allow the existence of two separate models.
A single model will provide a clear and consistent strategy for both companies. It will also make it easier for Scherr to streamline decision-making and allocate resources efficiently across the organization. However, adopting one revenue model may constrain the companies’ ability to cater to the different markets each company serves and reduce the overall adaptability in a rapidly changing industry.
A multiple revenue model will allow Siiquent and Teomik to continue diversifying their income streams by targeting various customer segments and adapting to market demands. However, managing different revenue models will likely introduce operational complexity and increase costs, as it requires more resources and coordination across the organization.
As the PM assigned to mediate this interaction between department heads, I will facilitate fair discussions, focus on shared similarities, and ensure alignment in business objectives. The biggest hurdle we will need to overcome is managing conflicting priorities and coming up with a cost-effective and flexible model for the two companies. Through creative brainstorming and clear metrics for evaluating different solutions, I hope to reach results that satisfy for both short-term /long-term goals and optimize resource allocation.
