BUSINESS: Can One Business Unit Have Two Revenue Models?

Isolde and Emanuel target different markets within the gene-based technology industry. Isolde’s unit, Siiquent, uses a razor-blade model that targets hospitals, where they make a profit based on consumables (blades) rather than machines (razors). Teomik, on the other hand, focuses on research institutions and universities, selling machines to make the most of its profit. Their respective business/revenue models align with their markets since they address different needs within their markets. Siiquent targets hospitals that rely more on consumables and would provide them with a continuous stream of revenue whereas Teomik targets labs that are more willing to purchase more expensive equipment long-term for research. “Imposing the structure of a single revenue model” reduces confusion among units, can potentially increase profit by focusing on one niche as well as consistency in products and sales approach. A single revenue model can streamline sales strategies, improve internal coherence, and offer a clear narrative to customers and investors. However, this approach can also possibly reduce profit by only focusing on one revenue model would be stifling, and reduce the creativity in both departments, and in the example in the reading, as it won’t be responding to market needs and flexibility has been key to winning customer loyalty (e.g., the pay-per-test model). This can also lead to the potential for disorganization and inefficiency as there’s a lack of structure. If I was the PM in this situation, I would explore a conversation between both parties around shared goals and possible collaboration. I would ask both sides on how they imagine the merger to be and what they think should remain or change under the merger. I would then work with them to explore a model that combines elements from both businesses. We can also explore different revenue models or continue with the same one based on customer segments or product lines, however, the solution needs to ensure stability as well as being cost-efficient. I would also conduct customer interviews and feedback to assess the needs of our clients to help define goals for the merger so that the team can arrive at a solution that allows them to retain what has working while still being realistic to our business goals.