- Which markets do Isolde and Emanuel target respectively? How do their respective business / revenue models align with their markets? What are the pros and perils of “imposing the structure of a single revenue model” vs. “letting [the company] continue on its flexible way”? 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 (👨🏻💼)?
- Isolde serves as the head of Siiquent, a DNA-sequencing start-up, while Emanuel leads Teomik, a provider of research equipment. Siiquent’s market focuses on selling everything related to gene-based diagnosis to hospitals and big diagnostic labs, while Teomik provides everything that research labs and universities need for gene-based studies (🧬). Additionally, both companies offer an extensive range of services, like customised training, workflow optimisation, and hotline support in the event of equipment failure. Siiquent differentiates itself from Teomik by selling, as Isolde calls it, “the stuff that machines use,” while Teomik sells “the machines” themselves i.e. Teomik sells the research equipment while Siiquent sells “chemical and biological consumables” that Teomik’s equipment operates on. Siiquent initially sold test instruments too, but due to high operating costs and budgetary pressures, they pivoted to chemical compounds, test kits, and other consumables (🧪). They made their profit by slightly undercutting the reimbursements that insurers gave back to the hospitals and the national health service, which ultimately gave the hospitals an arbitrage opportunity to generate small amounts of profit. Thus, Siiquent serves as a revenue generator for many of its customers. Teomik operated slightly different, and had initially started out by selling biological research equipment and materials. However, since the materials market had high competition and low margins, they opted to concentrate their efforts on selling patented research equipment with high margins to big funders of genetic research such as the Max Planck Institute. While the genesis of both companies is similar, they are different in that they have elected to develop in alternative directions, pursuing complimentary (yet at times overlapping) revenue streams within their businesses (💶).
I think imposing the rigid, single source of revenue stream on both businesses has some benefits. It would reduce repetition between the two companies and would allow them to focus more on the future of the company, rather than their own “currently” lucrative products. Having a more cohesive approach to their revenue streams may also help the firms to future-proof themselves against growing competition in their respective fields, and any new technologies that may disrupt their current business practises (📲). I also think that merging the companies, and combining their customer service components, would be mutually beneficial considering that it is a paramount service to customers yet is still being offered largely free-of-charge. On the other hand, I think that it may be too early to merge both companies, especially if they are both continuing to produce ample amounts of income for the parent company. There is definitely a lot of overlap that could reduce costs and increase revenue, but both companies pride themselves on their flexibility and the impact that it has on their ability to operate efficiently. That being said, having two companies sell similar products to the same customers can damage the credibility of both companies’, and I believe that the internal competition will only lead to strife in the future (🤺).To be honest, as a star PM my life has already been made a lot easier by the fact that Isolde and Emanuel have cultivated a solid relationship with one another. My approach to helping set up the discussion for the merger would be to start from the ground up, gathering advice from the employees about the pain points they would like to see eradicated if the company was to merge. Once I had gathered all this data, I would set up multiple meetings with the two heads, the shareholders, the directors, and the board of investors, and allow everyone to share their insights. I would hope that the discussion would be amicable and that the company would enact the merge based on a mutual understanding between both companies about how they will be able to progress forward as a single entity. The decisions would be made based on a democratic vote, and I would ensure that concessions were made towards both company heads so that we could retain them after the merger take place, although I acknowledge that that may be harder than it initially seems (🏛️).
