Isolde’s company, Siliquent, targets the “stuff machines use” while Emmanuel’s company, Teomik, targets “the machines” themselves. Specifically, Isolde targets the market for “gene-based diagnosis” and Emmanuel provides every piece of equipment required for “gene-based studies.” Informally speaking, in Isolde’s words, both ventures follow the razor-blade model, where one makes money on the “stuff” while the other hits breakeven on the “machines.” Something that unites both companies together, despite their slightly different target markets, however is that both companies offer “comprehensive services, such as customized training, workflow optimization, and hotline support from teams of PhDs in case of equipment failure.”
The pros of imposing a single structure is that, at a high level, there are fewer moving pieces for leadership to manage. When they are aligned, it allows for a more homogenous strategy that can be implemented across both companies, and reduces the overall complexity of the business at hand. However, the downside of imposing a shared, single structure across both companies is that you might be limiting the productiveness of either or both companies. That is, by forcing one company to adopt a particular revenue model that is incompatible with the way they’ve normally done things may ultimately lead to the demise of either company. This is because the cost of switching over to an inherently unnatural business model may undermine the different relationships and operational “know-how” that a company has built over the years, resulting in starting from square one.
My main recommendation to finding a viable solution would be to first evaluate the businesses independently from each other – identify the many revenue leaders and losers for both companies. Another factor as part of my argument is a calculation of the productivity and business the companies are jointly losing due to unhealthy internal competition, and why it is in their best interest to merge strategically/operationally. Once these calculations are complete, I would – along with the departmental heads – collectively determine a joint business model that defines new goals that, with some compromise, ensures that both units are generating enough revenue together to sustain the joint business and minimizes internal competition.
