The business models of the two companies in the case study made sense as a B2B business they sold both machines and the consumables that the machines used. They had different strategies on where they made profit from.
Isolde (Siiquent) : like a razor-blade model: sell the shaver at cost and make money on the blade. They made money on the consumables. They made sure that they positioned themselves as a revenue generator for the hospitals (using their equipment for diagnostic labs). They gave great maintenance and helped hospitals follow an exacting regulatory framework. They followed their pricing and offerings based on customer feedback.
Emanuel (Teomik) was flexible. He made money on the research instruments and not on the consumables (biological and chemical). They made margins on patent-protected devices for research. They didn’t’ offer regulatory assistance but would provide expert support on the machines.
The pros of imposing structure of a single revenue model vs letting the company continue to be flexible is that the company would be more streamlined and focused without creating internal competition. This choice is undoubtedly more efficient in that there would be a clear goal. A major con would be the the single revenue model would not be flexible to changes in the market and circumstances. A flexible structure would allow them to keep up with a dynamic marketplace.
A viable process to scaffold the discussion between department head to ensure a fair merging process would be to bring the department heads together to discuss their biggest goals and what they need to accomplish them. Furthermore for them to discuss what would be best as a whole, how the departments could now work together and complement each others’ goals, either as a bigger combined team for a specific goal or two separate internal teams working together for the same overarching goal. I believe that if they goals were aligned and each department head understood how the other was going to work towards this goal a fair merger could be achieved.
