Isolde and Emanuel target related, yet distinct markets that influence their respective revenue models. Isolde’s division, Siiquent, targets diagnostic labs and hospitals, following a razor-blade model where the profit is made on consumables rather than the machines themselves. This aligns with the market’s needs, as hospitals and diagnostic labs are often more focused on managing ongoing operating costs than on the initial purchase price of equipment. By providing consumables and services that help minimize downtime and streamline regulatory processes, Siiquent creates consistent revenue streams from these consumable products.
Emanuel’s division, Teomik, primarily targets research institutions such as universities and large-scale scientific labs. His business unit relies on selling high-margin research instruments, which is more aligned with the expectations of research markets, where institutions invest heavily in cutting-edge technology and can justify higher capital expenses for equipment that enables scientific discoveries.
The debate on imposing a single revenue model vs. maintaining flexibility has both pros and cons. Imposing a single model could simplify management and decision-making processes, providing strategic clarity and possibly reducing internal competition between the divisions. However, it risks stifling the flexibility that both divisions value in adapting to customer needs and market changes. In contrast, allowing the business to continue flexibly could promote responsiveness to market shifts but risks creating confusion in the marketplace and inefficiencies in internal operations due to lack of cohesion.
As the PM assigned to this merger process, I would scaffold interactions in such a way that ensures all stakeholders feel heard and understood. The two primary stakeholders being both department heads. Thankfully, it seems that they form a united front and share a similar opinion as to wanting to maintain the independence and flexibility of their respective unit’s revenue models. Although this may disagree with Peter’s desire for model unification, at least there’s only two general sides to consider instead of three.
First, it’s essential to establish a common ground between the division heads and Peter by setting clear objectives: what does the company hope to achieve with the merger? Are cost efficiency and market expansion the primary goals, or is maintaining flexibility more important? Next, I would create a space for both department heads to articulate their needs and concerns. Facilitating discussions around shared challenges and opportunities, allowing Isolde and Emanuel to propose potential synergies. Finally, I would establish a framework for testing different solutions, such as piloting a hybrid revenue model or exploring how the existing models can coexist without creating confusion in the marketplace. This approach ensures a balanced and fair process for merging the divisions while keeping strategic flexibility in mind.
