The interesting thing about this case study is that one doesn’t need to know too much about business revenue models to realize the challenge of merging two different models, especially when both leaders of said companies agree to leave the other model alone. Isolde, head of Siiquent, has implemented a profitable model by selling biological and chemical compounds, test kits, and other consumables at a reduced price to Germany’s ‘biggest hospitals and diagnostic labs.’ They offered sweet deals to customers by having them pay by tests performed, rather than how many resources used. Emanuel, head of Teomik, focuses on the genetic research (labs) market selling highly-priced patent-protected devices and instruments. Neither company made profit from the robust customer service they provided.
Isolde and Emanuel both mention things — other than revenue — that they want to maintain in a more flexible model. Emanuel wants to preserve their image of customer service given by PhDs in order to appeal to the research scientists. Isolde wants to preserve a more ‘respond to the market’ business model of catering to customers and responding to ‘competitiors’ initiatives’. They both refused Peter’s idea of selling services. All in all, it seems that both Isolde and Emanuel still want to preserve their previous identities and way of business before the merge. Even though they have both agreed to disagree, it does not seem like they are willing to compromise on their previous models.
Peter makes strong points about too much reactivity to the market and not enough strategy for how to deal with the competitive landscape, even though he may have had a strong, less professional reaction: “This random reactivity is crazy!”. It’s not necessarily random, nor crazy. Their business models have been profitable in the past and they’ve responded correctly to customers, market, etc. Firstly, Peter needs to be respectful of both models and at least reflect some open-mindedness in his language. Secondly, I think Peter needs to remind both leaders what it means to merge companies and how that has historically affected the business model. If there’s any data that shows what happens if merged companies preserve two business models, find it and show it! Show what has been commonly & successfully done. And remind the leaders that change is super hard. Everyone will have to let go some of their power. Both leaders have to be okay with the possibility of merging into a single business model, regardless, because it has to be an option. If I were Peter, I would ask the leaders to table their proposal and help generate multiple strategies for business. I would ask them to consider the hypothetical of a single business model: what would it look like? what sacrifices would be made? etc. I need the leaders to be just as open-minded as I am and need them to consider things that they possibly wouldn’t agree to. But, ideating/brainstorming could help them realize that a single revenue model is not that bad. They might learn to identify compromises between the two models.
