- Which markets do Isolde and Emanuel target respectively? How do their respective business/revenue models align with their markets?
Isolde is the head at Siiquent’s. Siiquent sold everything that hospitals and big diagnostic labs needed for gene-diagnostics. She described their business model “like a lot of business-to-business companies, we both sell two things: machines and stuff that the machines use. My unit makes its money on the stuff. It’s the classic razor-blade model: Sell the shavers at cost and make money on the blades.” Siiquent’s business model aligns with their market since by selling to hospitals and diagnostic labs, they have a recurring need of these products. They will be the machine once, but the stuff to make the machine work, they will buy it every single month.
Emanuel is the head at Teomik. Teomik provided everything that research labs and universities needed for gene-based studies. He makes “money on the machines, and it’s less relevant whether customers buy the stuff from you or from low-price competitors.” Since Teomik is selling to research labs or universities, they have a customer that is probably going to have a lower recurrence in buying stuff, but often will buy large number of machines to set up a new educational or research facility.
- What are the pros and perils of “imposing the structure of a single revenue model” vs. “letting [the company] continue on its flexible way”?
Pros of imposing a single revenue model:
– It allows sales reps to have a more structured playbook to reach out to new customers and sell the product.
– It avoids customers’ confusion on what they are buying
– It allows to have clear internal growth KPIs for the company
Cons of imposing a single revenue model:
– Different business models can target better different kind of customers (pricing has set up to the needs of customers)
– Customers currently have a budget to purchase recurrently the products that they get from these two companies. By changing the business model this might impact positively or negatively the pockets of customers leading to high risk of customer churn.
- Pretend that 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?
- Note: you are not asked to find a solution, but to find a viable process for finding a solution!
- First, I would identify all the areas that must align in this merger: machine production, stuff production, branding, marketing materials, sales playbook, pricing, legal agreements/contracts, etc.
- Then, I would set up an executive leadership team with individuals from both companies representing each of the areas mentioned in the previous point
- Then, I would agree on a common vision to each of these points by this executive team.
- Once this vision is approved, then I would set an executive report outlining the goals and OKRs for each area.
- Then, I would set cross-company teams with individuals from each company to work in setting up tasks to achieve the goals in each of these areas
- Then, I would create a timeline with details actions to execute on the plan at hand
- Then, I would start execution and track with sprints the development of the merger.
