- Which markets do Isolde and Emanuel target respectively? How do their respective business/revenue models align with their markets?
Because they meet the needs of the clients, Isolde and Emanuel’s models are both appropriate for their markets. As the head of Siiquent, Isolde serves institutions such as hospitals and labs with gene-based diagnosis supplies. Teomik directly sells research equipment to institutions. Siiquent’s approach is like “selling razor blades” since they sell supplies. They offer below-market rate with added customer service that their clients rely on and love. On the other hand, Teomik’s approach is like “selling razors” because they directly sell expensive equipment to niche businesses that do not mind the steep price because they require it for their business.
- 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 pros of “imposing the structure of a single revenue model” is that it provides focus. This means, starting from customer discovery, understanding pain points, and doing deep dives on specific roadblocks to building competitive advantage. For competitive markets that are fighting over margins, this could be a key differentiator, but it is not clear if this company falls in this category due to its unique relationship with clients. The peril with lack of flexibility might be that if there is a hit on this revenue stream due to any external reason, the whole business is affected. On the other hand, “letting the company continue on its flexible way” comes with the benefit of really milking the full potential of the status quo, which is flourishing. It will be easier to adapt due to market changes and a single competitor is unlikely to knock the whole business down. The peril is obviously that it runs the risk of being not focused enough, and as the competitive landscape gets more crowded, winning the race of margins might get very tricky.
- 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?
If I were the PM, I would do two things:
1) Sit with them each before. Really get inside the way the core of the business—its mission, teams, success metrics, offerings, distribution channels, marketing, and revenue details.
2) Once I hear both sides and what they bring to the table, I would consolidate their cases by focusing on both their points of unity and points of differentiation.
3) Finally, I would have them present their cases by giving them some questions that show each of their strengths as well as their willingness to compromise.
Since this is standard procedure for a merger, I believe it will go well and we will also account for alternate scenarios before the discussion begins and have them agree on some norms.
