Different Markets

Isolde and Emanuel, in general, sell the same thing… equipment and consumables for labs. However, these two market their products significantly differently. Isolde, on one hand, targets hospitals and diagnostic laboratories. Understanding that these entities often operate under tight budgets, Isolde aligns his revenue model, selling equipment at just above cost. This presents itself as extremely attractive for hospitals looking for ways to stay lean. This also ensures consistent cash flow for Isolde regarding consumables, and is where they really make their money. On the other hand, Emanuel targets esteemed research labs and universities that have higher budgets to afford more premium pricing on equipment. So, instead of focusing on turning a profit on consumables, Emanuel leverages high margins on the machinery.

Pros/Cons of Diversifying Revenue Streams

There are significant benefits to following both a single revenue stream and a multi-modal revenue stream. Regarding the benefits of a unified revenue stream, there is a lot of focus and attention that can go into truly mastering one niche. On top of this, it can be a lot easier to manage things on the business side, such as training, marketing, budgeting, and analyzing data, just because there are fewer moving parts. However, this is where the benefits of a multi-modal revenue stream come into play. Instead of just focusing on one customer profile to sell, flexible revenue streams allow the business to market to a much broader range of individuals, often times allowing for more “shots on goal”. Beyond this, it reduces reliance on certain factors that may have a significant negative impact on your operation. For example, if you sold only physical products, then if the manufacturing process broke down, it would be difficult to bounce back. But if you had a software business model in addition, you could utilize the funds being drawn in to make up the difference until you get back on your feet. Bottom line, a single revenue stream can provide simplicity and clarity, whereas multiple revenue streams can provide flexibility.

Merge Tactics

After a merging order sent by the CEO, I would want to encourage a very collaborative process. However, this may be easier said than done. In order to minimize any potential halts, I would first lay out very clear expectations for what the CEO has in mind. I would then try to relay the idea that this is not a competition between the two departments, but a new team with a new mission. I think the aspect of collaboration would be most vital to facilitate as the head PM. In my personal life, I feel as though I navigate these interesting relationship dynamics all the time. In fact, as the eldest of 10 brothers, I often find myself trying to soothe possible conflict between two parties. One thing that usually keeps my brothers focused on the task rather than being the “better” brother is assigning clear roles and targets to hit. In a business setting, I believe this would work wonders as well.