Question

Explain what synergy means at the strategic level of an organization, using an original, specific example.

Answer 1

Synergy, also known as synergism, refers to the combined effects produced by two or more parts.
Synergy is a general strategy at top level to provide benifits of combining two or more operations of same nature. When two or more companies or agents come together to work on something with more accuracy and cost effective manner. It's the concept of the whole being greater than the sum of its parts. Positive synergy is called the 2 + 2 > 4 effect.

In general terms, synergy is studied or calculated at strategy of implimentation of M&A. M&A are made to improve the company's financial and operational performance.Two companies can merge and form a new company to produce more income than any could have been able to create independently,by elimination redundant processes and significant cost reduction.The objective of synegy is to get more profit from operation , which can be either achieve by reduction in cost or increase in net sales value. For example, Acquisition of AT&T Wireless by Cingular in year 2004 was a good effort to gain better customer benefits and growth that neither company could have achieved separately by giving bigger market coverage, high improved quality and reliability for consumers and end users.