Isolde uses a more traditional “razor-blade” model where they sell both the machine and the stuff the machine uses. They make the most money on the actual stuff the machine uses. This aligns well with the market because as long as the machine is being used, there will always be a need for the stuff the machine uses. Meanwhile Emanuel targets customer needs, adjusting pricing policies as customer demands, accounting guidelines, and competitive threats change. Since this market is always rapidly changing, they are able to keep up with this flexible model.
One main pro of “imposing the structure of a single revenue model” is that the company is able to focus their efforts and resources on one mode of revenue. This allows for the company to maximize its efficiency and profit (theoretically). However, this prevents them from gaining potential revenue from the other mode (which in this case both have independently shown that they’re profitable). This is why “letting [the company] continue on its flexible way” is effective because they can profit more from both effective modes of revenue, which increases their net revenue. However, this could potentially strain their teams and spread resources too thinly, resulting in less net profit.
Scenario: the CEO has decided the department heads must merge their divisions together. As a star PM assigned to mediate this interaction between department heads, how would you scaffold the discussion to ensure a fair merging process?
This is a difficult situation to mediate since both Isodle’s and Emanuel’s methods have been proven to be highly effective. Additionally, they both have high customer loyalty (since it seems both of their methods are dependent on consumers and still profit). So, my first impression would be to “[let the company] continue on its flexible way” and invest in both models. However, in order to make a proper informed decision, I would first look a the facts: how much is each division making? Based on current data and informed predictions, which one would make more money? I would have to start answering these questions by analyzing past and current market trends and work towards narrowing our scope. The most effective solution would get the “best of both worlds” and be able to profit off of these two different loyal customer bases, while maximizing revenue efficiency. Currently, I don’t have the exact answer, but after more research I could start developing a plan that would benefit from all of the proven pros of each division.
