Isolde and Emanuel have two distinct approaches to targeting markets and revenue models. Isolde’s focus is a mass-market approach, where large, established entities such as hospitals and large diagnostic labs are the primary customers. Her model is an example of the razor blade model, where a steady income is generated by selling supplies for machinery, which they previously sold the machinery itself for a low price. This approach drives up demand and results in predictable and steady revenue streams. In contrast, Emanuel targets smaller customers in the fast-growing section of the market. His customers include research and university labs, a dynamic sector which undergoes frequent change. Emanuel’s model leverages flexibility, which is appealing to customers in this smaller sector.
Adopting a single revenue model would streamline operations, and present an organized, unified structure for the business and its customers. With a clearly defined revenue model, the strategies are clearly laid out and resources can be properly aligned. However, such rigid structure could risk losing segments of the market that are not benefited by the model. It could either stifle innovation in the smaller, more agile market sectors or leave out larger establishments that value long-term contracts. This loss of flexibility can lead to stagnation and the neglect of certain customers in the diverse market.
If I was tasked to mediate the interaction between department heads, I would first identify the shared goals between Isolde and Emanuel. This would require both parties to outline their key priorities and concerns regarding the merger. Finding common ground is essential to sustain the long-term growth of the company. Next, I would explore how the merger could possibly create new opportunities or capabilities that were not possible when the entities were separate. Finally, I would evaluate the risks and differences posed by both parties to brainstorm what could be done to address the foreseen challenges. I think the best way forward is to find a balance between structure and flexibility – one where the common ground is organized into a single plan and the differences are addressed by going beyond what the model requires.
