Case Study: Can One Business Unit Have Two Revenue Models

In Case Study: Can One Business Unit Have Two Revenue Models, a unique circumstance related to a successful business employing two markedly different revenue streams is presented. Teomik (led by Emanuel) was a provider of research equipment, widely successful because of its established pipeline of genetic diagnosis and research technology patents. As such, their primary market included research labs and universities that needed equipment for gene-based studies. Siiquent (led by Isolde) was a DNA-sequencing startup that primarily sold their products to hospitals and big diagnostic labs that performed gene-based diagnosis. While Temik’s revenue model relied on earning large margins on patent-protected devices that help scientists conduct genetics research, Siiquent focused on more transactional type relationships for customers to purchase diagnostic supplies. These business models make fundamental sense because Temik relies on its intellectual property to drive its profits and growth while Siiquent relies on its expert customer service and subscriptions-like model to retain customers. By imposing the structure of a single revenue model, the company can simplify numerous operations, like reducing overhead expenses for certain departments (i.e sales, accounting, etc.). Additionally, there would be a much more simplified leadership structure that can deploy unified strategies, allocate resources efficiently, and focus on holistic organizational growth. And finally, the article mentions that customers were sometimes confused by different branches of a “merged” company contacting this separately, so a single revenue stream would eliminate such chaos. However, this would mean that the discretized success of the companies would be broken, which would definitely result in business friction in the early stages of implementation. They might see slightly sunken profits as they maneuver through consolidation. Also, many critical customers may be lost since the newer target audience might be undercut slightly. Should they continue operating as independent branches and entities, they’ll likely continue targeting their target customers, but this comes at the cost of potentially losing profits due to the patents expiring and customers switching to competitors. If I was a PM that was staffed on this merger, I would undoubtedly start with a breakdown of the pros and cons of eliminating either Teomik or Siiquent. I would try to make some financial forecasts to project which division could deliver higher long-term profits with little friction. I would also talk to many customers to inquire if we can continue relying on their business should there be operational changes. By gaining insight into their perspectives and prolonged business, I can assess which division would be more robust. Moreover, I would have a shareholder’s meeting to understand how the board views the closure of a particular branch as their executive decisions would shape the company’s future. And finally, I would interact with the company’s employees to understand how shifting positions and laying people off could shape the future of the business. Holistically, this merger process is extremely critical for the business and could define its entire trajectory.