Synergies Definition
In business, a synergy is the creation of a whole that is greater than the sum of its parts. When two or more companies come together to form a new company, the new company has the potential to create synergies – that is, it can be more successful than each of the individual companies could have been on its own.
The concept of synergy is often used in mergers and acquisitions, as well as in joint ventures and strategic alliances. In these situations, the hope is that the combined company will be more successful than either company would have been on its own. For example, two companies may decide to merge because they believe that they can eliminate duplicate costs and better serve their customers by offering a wider range of products.
Synergy can also be created within a single company. For example, two departments that are working towards the same goal may find that they are able to achieve more by working together than they would have been able to achieve on their own.
The key to creating synergies is identifying opportunities where two or more entities can work together to create something new or better than what currently exists. To do this, businesses need to think creatively and outside of the traditional boundaries of their organization.
