Isolde targets hospitals and large diagnostic labs while Emanuel targets research institutions, universities, and labs that are involved with gene-based studies. Isolde relies on a sort of “razor-blade model” where her team profits off of consumables that hospitals and labs need for operations while selling the diagnostic machines at cost. The hospitals and diagnostic labs were more concerned with the compounds and test kits that were used by the machines, rather than the machines themselves. Emanuel’s team differed in that they generated their profit off of the machines themselves. This makes sense for Emanuel’s market because the research equipment was much more relevant to these universities and research labs.
Single Revenue Model
Pros:
- Unified strategy: The company can work together around one specific focus and develop a single, targeted approach toward generating revenue.
- Understanding competitive landscape: Having one model makes it easier to understand the competition and measure relative performance
Cons:
- Little flexibility: Having one model could make it harder to innovate and adapt. If the market changes, having multiple options for generating revenue could allow for an easier strategic pivot.
- Strategic misalignment: Each unit may not mesh equally well with the unified model which could result in one of them falling behind and ultimately reduce the competitiveness of the company as a whole
Continued Flexibility
Pros:
- Adaptability: The company can continue to make adjustments depending on the market and competitors.
- Innovation: The flexibility allows for more innovation.
Cons:
- Lack of strategic focus: Each group following its own model could result in different goals and lead to inefficiency and difficulty communicating and working together.
- Internal competition: With different incentives among the different team, they may end up competing against each other which would ultimately undermine the company as a whole.
If these divisions were to merge, I would first make an effort to better understand each individual business unit on their own and how they operate. From here, I would look for similarities among the two groups and begin the merger by placing an emphasis on these shared goals. Next, I would look for similar roles in each group and see how they might hold similar responsibilities, even if for different goals; I would encourage these individuals in similar roles to work together and explore what their individual strengths and weaknesses are to see if there is a simple way that they can work together in their new roles and make each other’s lives easier. Throughout this process, I would also make every effort possible to ease cultural integration so that these teams can actually get along with each other.
