Isolde’s unit targets hospitals and big diagnostic labs, providing them with everything they need for gene-based diagnosis. Their revenue model is focused on consumables and services, selling the diagnostic equipment at cost and making profits on the reagents, test kits, and other supplies the equipment uses. They also provide regulatory assistance and optimization services for free to build loyalty.
Emanuel’s unit targets research institutions like universities, selling them equipment and supplies for gene-based research studies. Their revenue model relies on selling the research equipment at high margins, while consumables have lower margins. They also provide expert support services for free.
The pros of imposing a single revenue model are increased simplicity, consistency and strategic clarity. The downsides are reduced flexibility to adapt to changing customer needs and competition. Letting each unit continue with its own model allows responsiveness, but may cause confusion for customers working with both units.
As a PM mediating the discussion, I would:
- Have each leader present their perspective on their unit’s model, customers and value proposition.
- Lead a discussion identifying the pros and cons of each model and how they align to the units’ markets.
- Explore if hybrid models could work, e.g. high-margin equipment sales plus consumables.
- Discuss which aspects of each model bring the most value to customers.
- Come up with process for collaborative development of new models, piloting and testing different options.
The key is creating a open discussion where all perspectives are heard, and collectively developing fair evaluation criteria and a process for testing.
