- Which markets do Isolde and Emanuel target respectively? How do their respective business/revenue models align with their markets?
Isolded and Siiquent target large hospitals and diagnostic labs that do testing for gene-based diagnostics. Siiquent operates on the “razor-blade model,” selling the machines themselves at lower costs and making the money off of the recurring sale of what is consumed in the diagnostic process.
Emanuel and Teomik focus on research labs and universities, who are interested in high-quality research instruments. Teomik generates most of its revenue from selling the instruments themselves at good margins, with consumables being a less significant revenue driver.
- What are the pros and perils of “imposing the structure of a single revenue model” vs. “letting [the company] continue on its flexible way”?
Pros:
Consistency, Clarity, and Efficiency:
A single model would streamline operations and create a clear strategy for the entire company. It would reduce confusion in the sales force and improve alignment between different units. Essentially, without the single revenue model, all sales and rev operations would have to be separate, as their implementation differs so much.
Cost Reduction:
Consolidating revenue models might allow for more efficient resource allocation and reduce costs related to maintaining different pricing and support structures for each unit. Considering the training for new hires of the different groups, far less human time and money would be spent in growing the company further.
Perils:
Loss of Flexibility:
Both Isolde and Emanuel heavily stressed the importance of flexibility in their revenue models, especially following the end of their patent and new competitors in the space. Imposing a single model could limit their ability to respond to changing market conditions, customer needs, and competitive threats, potentially harming revenue.
Customer Response:
Each unit serves different customer bases with different demands favors. Forcing both to adopt the same revenue model could result in dissatisfaction, especially if customers are accustomed to more tailored approaches.
- 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?
- Note: you are not asked to find a solution, but to find a viable process for finding a solution!
Understanding that both Emanuel and Isolde are unified and in agreement that both revenue models are necessary in their business lines, I would opt for a debate and discussion of building a hybrid model that incorporates facets from both business lines. The goal would be to find where the best aspects of each model can be preserved without stifling flexibility, which is key to both models.
Upon finding this hybrid, I would move to install a pilot program with some of our more loyal and established customer that are at less risk of loss. In doing so, I would place a heavy focus on customer feedback with targeted questions on the new changes that have arisen in the hybrid model.
