Isolde and her company, Siiquent, sell products to hospitals and diagnostic labs for gene-based diagnoses. Emanuel and his company sell products to “research labs and universities…for gene-based studies” (citation: our reading).
In Isolde/Siiquent’s case, they sell machines like Emanuel’s company does, but they focus on the accessories that the machines use, selling them for below-market-rate, because to upcharge already-expensive machines would alienate most of their customer base. Conversely, Emanuel’s company relies on the patents they possess to charge premium prices for their machines, garnering high margins on those devices. They both offer customer regulatory support as well.
Siiquent’s business model tailors to hospitals etc. by focusing on selling the ‘stuff,’ because not many hospital budgetary boards and labs can foot the cost of upcharged-machines. Teomik’s business model focuses on selling machines because research institutions can incur the bloated cost of the company’s machines. I am assuming this is possible, because these institutions are not held to as strict of budgetary standards as hospitals or the institutions really need these patented machines to conduct research and submit to journals. Isolde’s company also offers the regulatory support tailored to her customers bound by a specific framework for these hospitals, and her company makes sure her customers satisfy all requirements. In Emanuel’s case, his company offers support to researchers so their work can pass muster when submitted to prestigious journals.
The pros of imposing a single revenue model center around creating clarity. Currently, diagnostic labs, one of Siiquent’s markets, are becoming more like research institutions, and they are now buying compounds from Teomik, who is selling them cheaper than Siiquent. The revenue cannibalism is counterproductive; if both Siiquent and Teomik are unified in pricing structure, they have more leverage in the market, and they can reduce confusion among their customers. Secondly, given that Teomik’s machine-pricing models are based on their patents, once those expire, their revenue will plummet. Siiquent is being undercut by Teomik’s pricing for compounds/ ‘stuff,’ as well. If they unified to sell one thing, ‘stuff’ or ‘machines,’ they could react to industry landscape changes faster and remain competitive: instead of two large problem areas to solve, they would have one.
The perils of a single revenue model is, as Isolde states, it would prevent the companies from adapting to customers’ needs, a value that has won them loyalty and retention in a competitive market. However, the perils of letting the companies operate as is, as Peter mentions, is that such flexible business models place both companies at the whim of their customers, which is not sustainable.
If I were the PM, I would first have the department heads and I focus on what is the most important KPI for both companies. For example, for Siiquent, it would be ‘stuff’ sales. For Teomik, it would be ‘machines’ sales. Then I would look for overlap in their interests: do the machines Teomik sells use the accessories that Siiquent sells (and vice versa)? Which SKUs are the highest-selling from both companies? I’d propose we investigate which of these high-selling SKUs are Siiquent-Teomik compatible. Then we could discuss lower machine prices, higher ‘stuff’ prices, so the companies work in tandem. Furthermore, given both companies offer customer support, these respective branches could merge so the ‘customer-tailored’ experience persists. In summary, the key would be to unify these companies on their passion for being customer-first by seeing where these companies overlap.
