BENEFITS OF GROWTH - SYNERGY

Question 1

DEFINE SYNERGY

Answer 1

When yuo put two bs togehter and as a combiend unit they perform beter than they did as individual parts

Question 2

how else can you descibe synerrgy

Answer 2

1+1 = 3

Question 3

example of synergy in bs terms

Answer 3

put company with strong design team with another bs that generated hihg level of funds from its existing product but struggling to find new areas to invest in - they work better

Question 4

how can you use a synergy in a essya

Answer 4

as an advantage of mergers and takeover

can come form cost/rev side but more commonly cost

Question 5

explain how a synergy can be help cut costs by cutting down staff

but give a consideration

Answer 5

Eahc bs got 1 board of directors , hq and 1 of each functional team - when they join together cost savings occur as only need 1 of each therefore cost synergies have concurred

• can create insecurity/resistance/demo as people lost their jobs
• safe to argue thse that kept it see how imp is and feel more valued so work harder

Question 6

explain how synergy can create cost synergies through purchasing EOS

Answer 6

eahc bs ordder illy units from supplier at £1/unit if one bs takes over hte other and still relies on sam esupplier - they get more negotiating power over supplier so may be able to make order of 2 million units at less than £1/unit

so cost synergies have occured through purchasing EOS