Although Isolde and Emanuel sell similar items, they target very different markets. Isolde works for Siiquent and sells to hospitals and diagnostics labs for actual diagnosis. Meanwhile, Emanuel works for Teomik and sells to research labs mostly for studies and research. They both sell machines and things that the machines use, but what they profit off of is very different. Siiquent makes money off the things that the machine uses, while Teomik makes money off selling the machines.
When Siiquent went to sell its machines for high margins, it realized that hospitals and labs didn’t have the budget to buy at these prices. Instead Siiquent decided it would need to sell the machines at a lower margin and sell “compounds, test kits, and other consumables” for more profit. On the other hand, Teomik focused on a research market where there were many fewer regulatory restrictions on chemical compounds and other components of the machines so the margins for those were slimmer. Research institutions were able to pay higher prices for these patented machine, which allowed for wider margins on machines. Both companies offered additional service and support, but neither company made a profit on the services provided. Siiquent and Teomik were able to align their revenue plans with their markets as research institutions were able to pay more for machines while hospitals were not.
Some pros of a single revenue model versus a flexible model is that everyone is on the same page; it is clear how the company intends to generate revenue. A peril may be that in a dynamic field products and needs are changing and the current revenue framework may not be able to accommodate that as well as a different revenue framework. In a flexible revenue framework in a larger company, it may be difficult to get everyone quickly onboard and understanding when revenue frameworks shift.
In order to mediate the interaction for the merger, I would first bring the department heads together for a meeting. I would try to help them find common ground, no matter how broad it seemed (ie both want a revenue plan that will allow for a profit). Once common ground was found I think it would be important for each department head to talk about how their department runs and aspects that are the most important for them. It is important to give each department head uninterrupted time to talk to show respect and listening from the other side. After each side has talked, I want to leave time for each side to ask and answer questions or concerns. Then, in order to build a new plan going forward, it will be important to start from scratch and build up.
