Which markets do Isolde and Emanuel target respectively? How do their respective business/revenue models align with their markets?
The razor-and-blade model summarises the difference between Siiquent and Teomik’s business models: Teomik leverages the razors for profit, while Siiquent leverages the blades. This means that Isolde targets customers who would use the expensive machines (diagnostic labs, hospitals) while profiting off materials and selling the machines at a loss, while Emanuel is going for the larger organisations (universities, research centres) that would actually purchase his more expensive equipment, not really dwelling on selling materials. He models his business around how he can keep a competitive advantage and takes into account how his pricing policies affect his prospects. Both companies are loved by their customers for the thoughtful service they provide, but what made them join forces was the expiration of their respective patents in order to become more cost-effective. Changing their focus to services could have made sense, but would’t change much in terms of profitability.
What are the pros and perils of “imposing the structure of a single revenue model” vs. “letting [the company] continue on its flexible way”?
The single-revenue model is seemingly the most obvious solution for the two companies to merge in a structured and understandable way. This will help them with revenue, since they’re not always adjusting for the sake of being flexible, which saves them time and cuts down costs. The flexible model is far more taxing in terms of effort but allows Emanuel and Isolde to really hone in on what their customers need and keep the businesses customer-focused. This is definitely more aligned with their ethos around customer satisfaction, but again, takes tremendous effort.
Pretend that the CEO has decided the department heads must merge their divisions together. As a star PM assigned to mediate this interaction between department heads, how would you scaffold the discussion to ensure a fair merging process?
As for my suggestion, if Isolde and Emanuel don’t think that a one-name, singular revenue model for their joint business doesn’t make sense, I wouldn’t advise them to try to fit everything into one bucket. Rather, I’d focus on unifying the parts that do make sense in cutting costs and communicating with customers: bring the two together, align their visions, and distinguish the parts of their business models that they could not live without (still, compromises will probably have to be made). With these in mind, structuring an approach for every user category they can think off, strategies on warding off competition, and the lowest-effort way of keeping as many customers happy as possible should be on their agenda.
