The big question of this case study: “Can one business unit have two revenue models?”
Marco Bertini and Nader Tavassoli write in the Harvard Business Review about how two businesses navigated the process of consolidating their businesses into a single revenue model. This case study features two individuals, Isolde (the head of Siiquent) and Emanuel (the head of Teomik). Isolde’s company, Siiquent, tapped into selling consumer goods to hospitals and labs, such as chemical compounds and test kits. On the other hand, Emanuel’s company, Teomik, targets research units. The products that Emanuel’s company sold were powerful machines, rather than the consumable goods that Isolde’s company sold. In short, their companies differed in that Isolde’s company profited from selling consumables, while Emanuel’s company profited from machines, rather than stuff, as Emanuel claims in the case study.
To address the question of what are the pros and perils of “imposing the structure of a single revenue model” vs. “letting [the company] continue on its flexible way”, it’s important to consider this question from both a consumer and producer perspective. The main benefit of a single revenue model is that consumers would better understand how the business unit works; consumers would have a clear understanding of the business’s business model and overall brand. On the contrary, a drawback of imposing a single revenue model would be that it allows for the fluidity that a business would need in a time when medicine is evolving so rapidly. In the reading, I noticed that the two revenue models target such different aspects of medicine. As such, I can see “letting [the company] continue on its flexible way” being a viable option, if the business unit needs to quickly pivot in a different direction for its revenue model.
To ensure a fair merging process, there would need to be several conversations. There would be a variety of conversations, such as with Emanuel, Isolde, and both Emanuel and Isolde together. During these conversations, I would want to ask them where they see their company’s revenue model going in the next X number of years, what benefits and drawbacks they see with not only their revenue model but also the other company’s revenue model, and what ideas they have for merging the two revenue models into one cohesive revenue model. When navigating these conversations, I firmly believe that it’s important to remind them that it’s not a conversation about compromising, but rather finding the strengths in both revenue models to create one cohesive revenue model that allows the strengths to shine through.
