CASE STUDY: Can One Business Unit Have Two Revenue Models?

Isolde targets hospitals and large diagnostic labs, while Emanuel focuses on the gene-based research needs of labs and universities. Both sell machines and related supplies, but Isode uses a razor-blade business model, selling machines at cost and making money on supplies, while Emanuel earns revenue from the machines.

Imposing a single revenue model would reduce internal conflicts and costs, and help the company select customers and navigate the competitive landscape. However, it may limit flexibility and creativity needed to adapt to a dynamic marketplace. Allowing the company to remain flexible helps quickly respond to customer and competitor initiatives, but also leads to constantly deviating from the original revenue models, resulting in waste and damage.

To discuss the merger, we can begin by explaining the rationale and potential benefits as decided by the CEO. Then, allow department heads to express concerns and reservations. Next, discuss shared goals and how a merger can better achieve them. Brainstorm potential solutions and compromises, including the possibility of a new revenue model. Finally, evaluate and weigh options, reach a consensus on the solution, new responsibilities, and a merging timeline.

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