The concept of synergy and its importance for the strategic planning of the company. Synergy strategy Motives for integration

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Fragment of work:

Introduction 3
Chapter 1 Strategic Alliances 5
1.1. Strategic alliances: integration without losing identity 5
1.2. Corporate strategic alliances 12
1.3. Benefits of strategic alliances 16
Chapter 2. Synergy strategy 19
2.1. Synergy Opportunities 20
2.2. Using synergy 21
2.3. Effective use of synergy 23
2.4. Agenda 25
Conclusion 26
List of used literature 30

Introduction

This paper deals with the topic "Strategic alliances, strategy of synergy".
Strategic alliances are agreements entered into between companies for cooperation that go beyond the normal business relationship between firms, but do not mean mergers, acquisitions or the creation of a general partnership.
In recent years, news about new acquisitions or sales of companies taking place on the Russian market. Mergers and acquisitions are becoming a tool that provides a fairly quick solution to a number of problems facing Russian companies: for example, increasing the size of companies, entering new markets, increasing business stability, obtaining operational synergies, improving the capital structure, etc. Solving these problems becomes especially important today, when Russian business is not only facing a growing concentration of the competitive environment, but also with the emergence of global players in the Russian market. It is easier for a large and developed company to successfully compete with transnational corporations.
Consolidation has become the most common thing in modern business. Many industries are dominated by a few large corporations. How can small businesses not only survive in such conditions, but also increase their market share? According to seasoned entrepreneur and consultant Robert L. Wallace, the answer to this question lies in creating joint ventures and strategic alliances with other companies. The opinion is obviously correct and therefore the relevance of the topic of the work is beyond doubt.
The purpose of the work is to analyze the strategy of synergy in strategic alliances.
The object of the study is a strategic alliance and the implementation of a synergy strategy within its framework.
The subject of the study is the essence of a strategic alliance, the need to create alliances, their advantages and features, the use of a synergy strategy, its mechanisms and capabilities.
Synergy is understood as the benefits arising from joint actions or sharing. The organization must actively evaluate all predictable opportunities available to it, which may mean its penetration into other industries. Ansoff (1965) created a logical and systematic method for evaluating and selecting options. His scoring system takes into account the concept of synergy, usually explained in terms of "two plus two equals five". This means that when a new business area is added to an old business area, there must be an interaction between them that means that the profit generated is greater than if these business areas were operated as two separate parts. Synergy is related to factors such as the skills of the people in the organization, the talent of its managers, the marketing channels, the physical distribution operations, and the results of the R&D efforts. What all this means is that while an organization may become a conglomerate by applying these principles, it will not become a garnished united trust that operates on the basis of risk splitting coupled with profit maximization.
For some types of organizations, this may be the best way to develop strategy, although current research shows that conglomerate companies do not always add shareholder value to their subsidiaries. Porter (1987), in one of his influential articles, argues that the head office has only a very limited number of ways to add value to a diversified organization.
Let us consider in more detail the strategy of synergy in strategic alliances.

Chapter 1 Strategic Alliances

1.1. Strategic alliances: integration without losing identity

AT last years news about the formation of strategic alliances appear in the press almost every day, while both the most famous multinational corporations and companies whose scale of activity is not so large act as partners.
It can also be noted that strategic alliances are concluded both between companies operating in the same industry and even being competitors, and between companies whose main activities are focused on completely different, at first glance, markets. An example of the first option is the conclusion in 2000 of an agreement on a strategic alliance between longtime competitors - Corel Corporation and Microsoft. At the same time, in 2001, an agreement was reached on a strategic alliance between Samsung and AOL Time Warner, companies that at first glance operate in different industries.
Research data (by Jeffrey H. Dyer, Prashant Kale and Harbir Singh) shows that approximately 20,000 strategic alliances have been formed in the last two years. Today, each of the 500 largest global companies participates in an average of 60 major strategic alliances.
The globalization of the business world, the general spread and interpenetration of technologies, which no longer allows such a clear distinction between industries, has become a factor that greatly contributes to the formation of alliances.
Economic science has also recently paid special attention to strategic alliances; almost all works on strategic management written over the past decade, one way or another, touch on the topic of creating and developing strategic alliances.
From all of the above, we can conclude that today the creation of strategic alliances can already be considered a common practice in world business. It is at least not reasonable not to take this into account in long-term planning, since any company, especially a competitor, must be evaluated not only as an independent business unit, but also as a member of possible alliances. Competition in modern world becomes a struggle of teams, not individuals.
In this article, we will try to define what exactly is a strategic alliance, what is its difference from other types of cooperation, what can be the prerequisites for a company to join strategic alliances. In future publications on this topic, we will take a closer look at the process of forming alliances and various aspects effective management them.
In the relevant literature, alliances are often identified with conglomerates, networks, sometimes even with diversified companies. In our opinion, these concepts must be distinguished because of their different nature and, accordingly, differences in management methods.
Companies that diversify their business through acquisitions or the creation of new business units seek to achieve a synergistic effect by combining different lines of business. Until recently, it was believed that the most reliable way to create a new business is to combine core competencies through mergers and acquisitions. At the moment, under the influence of global macroeconomic factors, the effectiveness of this approach is significantly reduced. Perhaps this was the impetus for the development of strategic alliances as a fundamentally new type of partnership.

Synergy (doel. - acting together) is a strategic advantage that arises when efforts are combined (the whole becomes greater than the sum of the parts, or 2 + 2 > 4).

Synergies within and between firms are possible.

Intra-company synergy is associated with the company's ability to provide a level of income that exceeds the sum of similar indicators of its divisions or business units operating separately. Business synergy is said to exist if the return on investment for each individual branch, business unit within a company is greater than if they were independent companies.

The effect of intra-company synergy is possible when implementing strategies integration and diversification, while expanding the scale of the business.

However, in the modern economy, more and more often, a synergistic effect is obtained by combining the efforts of companies within the framework of a strategic partnership (network structures, alliances, outsourcing, etc.). The significance of such inter-firm synergy lies in the fact that it helps to obtain higher efficiency when companies combine their efforts than when they compete with each other.

A well-known specialist in the field of strategic management, I. Ansoff, suggests the existence of four types of synergy.

1. Marketing synergy, which is created by common distribution channels, a joint system of logistics and promotion. This synergy is most often seen in the consumer goods market.

Marketing synergy is extracted retail chains stores, vertical marketing networks, it arises from joint advertising of various goods, for example, advertising of financial services of Uralsib Bank on Shishkin Les water packaging and cereals Pros to.

2. Production (operational) synergy is provided through the use of economies of scale (better use of production equipment and personnel, distribution of overhead costs). Bulk purchasing and outsourcing can also create manufacturing synergies.

Production synergy is extracted from the contract manufacturing of clothing, footwear in China, the manufacture of jeans at the Gloria Jeans company under its own brand and by order of foreign companies.

• 3. Investment synergy arises in large diversified companies by facilitating access to sources of capital and the possibility of cross-subsidizing (using resources received in one business area for the development of another).
• 4. Management synergy is provided through the intra-company transfer of information, knowledge, technical and managerial experience (intra-company synergy corporate governance), as well as through the transfer of accumulated management experience under a franchising agreement (intercompany synergy).

Companies McDonalds Baskin Robbins RostikS, Sela and others transfer their management experience and business model to their partners when concluding a franchise agreement.

Intra-company synergy of management arises when project teams are formed in the company to solve targeted problems, and when branches are opened.

The concept of synergy has been developed within the framework of the resource approach, according to which the company is considered as a set of tangible and intangible resources (assets). Within the framework of the resource approach, Hirouki Itami considers the combinatorial advantages that arise if a company can use its resource (technology, competence) in more than one product market segment. He identifies two types of combinatorial benefits / effects: complementary (complementary) and synergistic, which accompany each other.

The table discusses the effects that arose from the merger of the Novosibirsk company OAO Sibirskoye Moloko with the Wimm-Bill-Dann (WBD) group of companies.

Combinatorial Attachment Effects

Complementary effects for OAO Siberian Milk
Realm of Manifestation	Reasons for the appearance	Form of manifestation
	Coating accounts payable Replenishment of working capital Access to relatively cheap credit resources	Improvement in financial condition. Competitive advantage in purchasing milk
Production	Investment in production: - launch of milk sterilization line - launch of the packaging line	Range expansion. Release of high-margin products (yogurts, dessert group). Improving product quality
Synergistic Effects of Attachment
Control	"Copying" the control system of the WBD group	Improving the quality of management. Perception modern methods management
Marketing	The right to produce the well-known trademark "House in the Village". Assistance in the development of their own brand "Merry Milkman"	Higher level of marketing. Using the effect of WBD advertising. Market share expansion
Innovation	Access to production technologies, scientific potential, R&D and know-how of WBD	Increasing the innovative potential. Reducing innovation risks

The complementary (complementary) effect arises due to the fuller use of the same tangible asset of the company. This effect occurs in the company in the case of the production of several goods or activities in several markets. The purpose of managing the company's activities in this case is the most complete use of available resources.

Unlike the tangible assets of a company, its intangible assets, such as key competencies, reputation, trademark can be used in more than one area of ​​activity at the same time without compromising their usefulness.

With simultaneous use, an intangible asset not only does not lose its value, but also increases it. Accordingly, there is a synergistic effect associated with the simultaneous use of resources in several areas of activity without any damage to each of them. Such synergies, in fact, are focused on exploiting the “free rider” effect (the free rider does not pay, but uses what is paid for by others).

Just as the joint use of tangible assets of different companies is about achieving a complementary effect, the joint use of intangible assets (license agreements, franchising, management contracts) provides a synergistic effect.

Some call the complementary effect structural synergy, since it arises by combining or supplementing the resources of a company or a number of companies, and the actual synergistic effect - managerial synergy.

The tangible assets underlying the complementary effect can be relatively quickly obtained by competitors, it is more difficult to acquire (copy) intangible assets, respectively, synergy based on intangible assets provides the company with more sustainable competitive advantages.

The example discussed above shows that complementary and synergistic effects are closely related, go hand in hand. Complementary effects are a guarantee of profit, but they are usually not unique, competitors are able to take advantage of them. The long-term return on synergies based on the use of advanced management methods, a high innovative culture, the reputation of the company and its products, brand awareness is much higher.

Strategic Synergy / Ed. E. Campbell, C. S. Lachs. - St. Petersburg: Peter, 2004. - Chapter 3.

The strategy of synergy consists in obtaining competitive advantages by combining two or more business units in one hand. The ability to manage synergy creates a competitive advantage that is realized at the level of the enterprise as a whole and, ultimately, will manifest itself in various product markets in reducing costs or in acquiring unique properties for products. This strategy aims to improve performance through better use of resources (technology and cost synergy), market infrastructure (common marketing) or business areas (planning and management synergy). The significance of this strategy lies in the fact that it helps to increase the profitability of production when the interconnection of business units is greater than in a situation where they are managed separately. But a synergistic effect cannot appear on its own, it must be planned and able to extract. Synergies must be identified, defined and built into the rationale for the plan.

Synergies are most pronounced at the corporate level, but are also possible within a strategic business unit.

The conditions for the use of this strategic advantage is the joint ownership of resources and areas of activity or a voluntary association of efforts. However, the emergence of a synergistic effect is a very complex event. Its achievement depends on the successful combination of many elements. Before proceeding with its planning, specialists should conduct a collective discussion of the possibilities of achieving this effect. Great managerial skill must be applied in order to achieve the realization of potential synergies from business unit managers.

When choosing a synergy strategy, managers should consider three considerations:

1. Does the enterprise have a tradition of using synergies?

2. What level of interconnection does top management involve and what managerial experience does it have?

3. What requirements and instructions will be set by the conditions of the external environment?

It is believed that the higher the expected turbulence of the external environment and the stiffness of competition, the higher the value of synergy for the success of the firm. This strategy underlies the creation of various alliances and other structures, both national and international.

In Russia, the most common types of strategy are product differentiation (in the food industry) and the strategy of synergy (which manifests itself in the diversification of activities - along with the main production, enterprises are engaged in trade, securities transactions, and invest in other enterprises).

The low-cost strategy has not yet gained popularity, because the effect of the manifestation of external factors, such as inflation and the imperfection of laws, significantly overlapped the possible savings of internal resources.

The focus strategy is used, as a rule, by small enterprises. In the Russian Federation, a special kind of strategy has also appeared - crushing strategy. This strategy is associated with the division of the enterprise into a number of small subsidiaries, the creation of holding structures on the basis of pre-existing large enterprises.

Rapid response strategy

The rapid response strategy involves achieving success through a quick response to changes in the external environment (technological, consumer and others) 5 . For example, in order to adapt manufactured products to new market needs, time is needed. The firm that has chosen this strategy will make every effort to ensure that in the shortest possible time to implement adaptation . If she does it faster than her competitors , it will have the opportunity to receive additional profits due to the temporary absence of competitors of the new (modified) goods (services). This strategy in its simplest form can be implemented by imitation firms that counterfeit the branded products of world famous manufacturers. In the most difficult case, ¾ firms that were able to create the prerequisites for constant adaptation to changing conditions (i.e., created the appropriate corporate culture a company focused on constant innovation and finding effective ways to solve everyday problems).

Synergy strategy ¾ is a strategy for gaining competitive advantage by combining two or more business units (business units) in one hand . The presence of the synergistic effect and the ability to manage this effect creates a specific competitive advantage, which is realized at the level of the company as a whole and which ultimately manifests itself in different product markets in reducing costs or in acquiring unique properties for products. Strategy synergy involves increasing the efficiency of activities through the sharing of resources (synergy of technologies and costs), market infrastructure (joint marketing) or areas of activity (synergy of planning and management).

The value of the synergy strategy is thus that it helps to obtain a higher profitability production when business units are interconnected than when they are managed separately. But it should be added that the synergistic effect, no matter how large it may be, will not manifest itself, it must be planned and extracted. And this is possible if synergy is identified, defined and incorporated into reasonable plans.

The synergy strategy involves the implementation of related or unrelated diversification activities (i.e., or strengthening positions in the industry due to horizontal or vertical integration or penetration into other areas not related to industry production).

Thus, any specific organization must clearly decide for itself what kind of competitive advantage it wants to obtain and in what area it can actually be achieved, given that, in essence, these strategies are alternative.

Strategy synergy 6 is a strategy for obtaining competitive advantages of business units competitive advantage, which is realized at the level of the enterprise as a whole and which ultimately manifests itself in different product markets. synergy of planning and management). The value of the synergy strategy is, therefore, that it helps to obtain a higher profitability of production when the business units are interconnected than when they are managed separately.

Here, I. Ansoff notes that the main problem of developing a synergy strategy is related to the contradiction between management flexibility and synergy, increasing management flexibility reduces potential profit and potential synergy. At the same time, it is believed that the main danger of this strategy is the lack of flexibility, as well as possible compromises and delays in decision-making. These disadvantages can negate any cost advantages.

Most strategies are based on differentiation, either low costs or a combination of both, complemented by other competitive advantages. Of course, real life situations are much more complicated than theory, and it is often impossible to clearly define (classify) the strategy of an enterprise. Observation of the activities of Russian enterprises indicates that the most common types of their strategies are product differentiation (this strategy is especially pronounced in the food industry) and the strategy of synergy, which manifests itself in the diversification of activities along with the main production, enterprises are engaged in trading activities, transactions with securities, investments funds to other enterprises and organizations.

A synergy strategy is a strategy for gaining competitive advantage by combining two or more business units (business units) in the same hands. The presence of the synergistic effect and the ability to manage this effect creates a specific competitive advantage, which is realized at the level of the company as a whole and which ultimately manifests itself in different product markets in reducing costs or in acquiring unique properties for products. The synergy strategy involves increasing the efficiency of activities through the sharing of resources (synergy of technologies and costs), market infrastructure (joint marketing) or areas of activity (synergy of planning and management).

The value of the synergy strategy is thus that it helps to obtain a higher profitability of production when the business units are interconnected than when they are managed separately. But it should be added that the synergistic effect, however potentially large it may be, will not manifest itself, it must be planned and extracted. And this is possible if synergy is identified, defined and incorporated into reasonable plans.

The synergy strategy involves the implementation of related or unrelated diversification of activities (ie, either strengthening positions in the industry through horizontal or vertical integration or penetration into other areas not related to industry production).

Is it possible to consider that an attempt was actually made to implement the strategy of synergy What is theoretically necessary for its successful implementation

Diversification is the process of a firm penetrating into other industries. The diversification strategy is used to ensure that the organization does not become too dependent on one strategic business unit. The idea of ​​diversification has a long history. Many companies today, with large amounts of capital from their core businesses, see diversification as the most appropriate way to invest capital and mitigate risk, especially if further expansion in core businesses is limited. When implementing a diversification strategy, a firm 1) either goes beyond the industrial chain within which it operated and is looking for new activities that complement existing ones in terms of technology or commercial in order to achieve synergy effects (concentric diversification) 2) or develops activities that are not related with its traditional profile, in order to update its portfolio (pure diversification).

Consequently, each enterprise has many strategic alternatives, the choice of which is also not an easy task. Possible criteria for selecting alternative strategic decisions can be grouped into five groups (Fig. 9-1) - Strategic alternatives need to be assessed in terms of whether they correspond to the opportunities and threats of the external environment (external analysis). To achieve competitive advantages, which are part or basis of the strategy, it is necessary to use the resources and areas of the enterprise. Therefore, the chosen strategy should correspond to the external environment, the goals of the enterprise, be feasible and not contradict other strategies of the enterprise. With a strategic choice, an enterprise, as I. Ansoff notes, contradictions arise between three groups of benchmarks between long-term and short-term indicators of profitability and sales volume, between profitability and management flexibility, management flexibility and synergy. How decisions are made to choose the best competitive strategy

What are the three main types of overall firm strategies. What is the effect of synergy or strategic leverage

The scope of activities and features of the company's strategy. These concepts define the limitation or, conversely, the expansion of planning opportunities. The planning benefits associated with the synergistic effect are available only to large firms. Therefore, they have the necessary potential to foresee their future, namely

Growth is certainly important, but Growth for Growth, compared to Profit for Profit, is an even more dangerous strategy, as most firms have learned the hard way. Indeed, a special computer program designed to determine the causes of company failures in the 1980s found that too rapid sales growth was a harbinger of imminent bankruptcy.5 It's not hard to see why. Accelerated growth, involving unexpected opportunities, hidden threats, and organizational restructuring, is almost unmanageable. Moreover, ultra-fast growth inevitably entails high financial risks, as the firm is forced to increasingly resort to leverage. Finally, since in the stock market the offer price of shares usually exceeds their real value by at least 50%, the acquiring firm should aim for a huge increase in the efficiency of the combined company. In practice, many of these firms conduct only a superficial analysis of the synergies of a potential merger. Deals are often made only on the assumption that rapid market growth, inflation and ever-increasing asset prices will turn an expensive purchase into a truly valuable acquisition.

For more on synergy, see Ansoff, I. New Corporate Strategy. - St. Petersburg. Peter Kom, 1999 Koch R. Management and finance from A to Z. - St. Petersburg. Peter Kom, 1999.

Secondly, competitors who have successfully mastered the production of inexpensive products are trying to penetrate the market segments focused on goods with enhanced consumer qualities. So, over the past 25 years, Japanese companies have been moving in this direction in the production of cars, photographic equipment, chemicals and many other areas. Thirdly, another reason why large corporations use the strategy of conquering new niches is the achievements in the field of management. Modern managers learn how to reorganize the structure of the company so that each of its divisions is focused on its niche. Each SBU has its own marketing strategy and internal organization, but at the same time they have synergy in the joint conduct of R&D, distribution of products and distribution of limited company resources. For example, such a powerful industrial group as ABB has 1,300 firms and 5,000 SBUs, each of which is focused on its own niche, but at the same time can use common material and intellectual resources.

An acquisition strategy makes sense if the victim has a high synergy potential for effective synergies where the buyer is able to reduce overall costs or improve their marketing strategy. An important role is played by the potential of the buyer's own brands and the overall financial situation in his company. If the buyer produces similar products, and his marketing opportunities are small, but he derives the maximum benefit from his goods, the acquisition of trademarks is indicated for such a company. On the contrary, it is preferable to create and develop own brands if they have to enter an emerging market, if the company owns potentially strong brands and has serious marketing and creative potential. The five factors given in Table. 6.4, play the role of the main criteria in deciding whether to create or acquire a trademark.

A portfolio of unrelated brands. Often a company's acquisitions are a jumble of different brand names from different countries, conflicting positioning strategies, and lack of business unit synergies.

Determine by expert opinion on a scale from 0 to 10 and enter in each box the value of the level of synergy that the provider of the SBA currently offers to the recipient. Mutual support of strategic economic zones is evaluated in terms of the transferred strategies, ideas, products, services, etc.

In this chapter, we will begin our discussion of synergy, one of the main components