Synergy Analysis Synergy analysis seeks opportunities by finding the optimum bal
ID: 343229 • Letter: S
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Synergy Analysis
Synergy analysis seeks opportunities by finding the optimum balance between marketing efficiencies versus R&D–manufacturing efficiencies. While the textbook example involves external synergies through mergers and acquisitions, the concepts apply equally well to internal synergies sought in adding new products or seeking new markets. In this interactive exercise you will be given a number of various scenarios and asked to identify them as one of the following five synergy categories:
1. Market–product concentration
2. Market specialization
3. Product specialization
4. Selective specialization
5. Full coverage
Using diversification analysis from Chapter 2 and the market–product grid framework from Chapter 9, we can see two kinds of synergy that are critical in developing corporate and marketing strategies: (1) marketing synergy and (2) R&D–manufacturing synergy.
A critical step in the external analysis is to assess how these merger and acquisition strategies provide the organization with synergy, the increased customer value achieved through performing organizational functions more efficiently. The increased customer value can take many forms: more products, improved quality on existing products, lower prices, improved distribution, and so on. But the ultimate criterion is that customers should be better off as a result of the increased synergy. The firm, in turn, should be better off by gaining more satisfied customers resulting in increased sales and profits.
READ EACH HINT BELOW AND MATCH TO THE CORRECT COLUMN IN THE TABLE:
Redken-The four most popular categories of hair care products are shampoos, conditioners, hair sprays, and gels. Women and men are the primary market segments. The Redken brand sells shampoos, conditioners, hair sprays and gels primarily to women.
Reebok- There are six main product types of athletic shoes: jogging, tennis, basketball, aerobics, cross-training and walking. Women, men, girls, and boys are the primary market segments. Reebok makes several models for each type of athletic shoes and markets to men and women of all ages.
Burton: The skiing industry has three primary product categories: downhill snow skis, cross-country skis, and snowboards with segments of various ages and both genders. Burton focuses on snowboards only, for males and females of all ages.
Dockers: There are three main product categories of pants: jeans, casual, and dress with segments of various ages and both genders. The Dockers brand focuses on casual pants for men.
Clark Shoes: There are three broad categories of shoes: casual, dress, and athletic with segments of various ages and both genders. Clark Shoes focuses on casual shoes for males and females of all ages.
Asus: There are three main product categories of computers: desktops, laptops, and netbooks. The primary market segments are individuals, small businesses, and large businesses/institutions. Asus sells laptops and netbooks to individuals and small businesses.
Alpina: The skiing industry has three primary product categories: downhill skis, cross-country skis, and snowboards with segments of various ages and both genders, Alpina Sports, Corp. focuses only on downhill and cross country skis, primarily for adults.
Ryka Shoes: There are six main product categories of athletic shoes: jogging, tennis, basketball, aerobics, cross-training and walking. Women and men, girls and boys are the primary market segments, For the first few years of the company, Ryka Shoes made aerobic's shoes for women.
Rollerblade: There are four main product types of in-line skates: recreation, fitness, street, and speed. Women, men, girls, and boys are the primary market segments. Rollerblade maintains a product line for each type of skate and markets to men and women of all ages.
Eukanuba: There are three main categories of dog food: puppy, adult and mature. The primary market segments are affluent, middle class, and ultra value seekers. Eukanuba brand sells puppy, adult and mature dog food to primary the affluent segment.
SYNERGY EFFECT DROP AREA Market–product concentration Market specialization Product specialization Selective specialization Full coverageExplanation / Answer
Redken - All product lines to a single market segment (women): Market specialization
Reebok - All products in all segments: Full coverage
Burton - Only one product (snowboards) but for all segments: Product specialization
Dockers - One product (pants) for one segment (men): Market-product concentration
Clark Shoes - Only one product (casual shoes) but for all segments: Product specialization
Asus - Two grids are forming, viz, laptop and notebooks vs. individuals and small business, so presence in partial product lines and partial market segments: Selective specialization
Alpina - Serving to one segment (adults) two product lines (downhill and cross country skis) out of three (downhill skis, cross-country skis, and snowboards): Selective specialization
Ryka Shoes - One product (aerobic's shoes) for one segment (women): Market-product concentration
Rollerblade - All products in all segments (I consider boys and girls as men and women of early ages): Full coverage.
Eukanuba - All products (puppy, adult and mature) to one segment only (affluents) - Market specialization
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