expert
Experte mit der besten Antwort

Serhat

100% Empfehlungsrate

59 Meetings

530 Q&A Upvotes

319 USD / Coaching

Synergies framework

Anonym A fragte am 31. Mär 2019

Hello, I woud like to get some advice on how to structure a framwork to identify Synergies (Generally occuring in M&A cases). More specifically, once you break it down in Cost synergies and Revenue synergies what are the most recurrent ones for each cathegory (e.g. distribution channels, advertisment, production, raw material etc.).

Lastly, a few times it's hard for me to categorize if something it is a cost or revenue synergy. For example, in my view a distribution channel's synergy could be either a cost synergy, because I use the same channels a for 2 or more products, but it could be also a revenue synergy, since i would increase the sales on the single channel.

Thank you!

3 Antworten

  • Upvotes
  • Datum aufsteigend
  • Datum absteigend
Beste Antwort
Serhat antwortete am 26. Apr 2019
BCG | Kellogg MBA |82% Success Rate| 350+ coachees | 5+ year consulting | 30+ projects in ~10 countries
Coaching mit Serhat vereinbaren

100% Empfehlungsrate

59 Meetings

530 Q&A Upvotes

319 USD / Coaching

Here is the categorization for revenue and cost synergies

Revenue Synergies

  • Patents:
  • Complementary products:
  • Complementary geographies and customers

Cost Synergies

  • Shared Information Technology:
  • Supply Chain Efficiencies:
  • Improved Sales and Marketing:
  • Research and Development: E
  • Lower Salaries and Wages:
  • Patents
Vlad antwortete am 31. Mär 2019
McKinsey / Accenture / Got all BIG3 offers / More than 300 real MBB cases / Harvard Business School
Coaching mit Vlad vereinbaren

97% Empfehlungsrate

346 Meetings

4.800 Q&A Upvotes

319 USD / Coaching

Hi,

Hi,

For Synergies Calculation you can use the following structure:

  1. Revenue synergies - here you calculate the synergies in price (more monopoly power) and quantity (depending on the case it may be new geographies, new products, new distribution channels, bigger share on shelves crosselling opportunities, etc.)
  2. Cost synergies - typically you use a value chain structure tailored to the industry (e.g. supply-production-distribution-marketing-after sales support)
  3. Risks - major risks that can decrease the synergies (tip: don't underestimate the merging companies culture factor)
  4. Total synergies potential in $, adjusted by risk (probability of failure)

Distribution is a cost synergy when you get a cheaper distributor (or get discounts for volume). It's also a revenue synergy if it can increase your sales (e.g. access to new stores or geographies)

Best

Sidi
Experte
antwortete am 1. Apr 2019
McKinsey Engagement Manager & BCG Consultant | Interviewer at McK & BCG for 7 years | Coached 90+ candidates secure MBB offers
Coaching mit Sidi vereinbaren

100% Empfehlungsrate

297 Meetings

1.761 Q&A Upvotes

319 USD / Coaching

Hi! Don't use the value chain to disaggregate synergies on the first level! First you have to disaggregate into principle value dirvers, and the value chain comes into play WITHIN the cost analysis. I.e.,

(a) revenue synergies --> price/quantity --> subdrivers of quantity, and

(b) cost synergies --> value chain

Don't forget financial synergies (e.g., the new merged organization might get a better credit rating and, hence, lower costs of capital in the future).

Cheers, Sidi

Verwandte BootCamp-Artikel

Cost-Benefit Analysis

Investments or single business cases need to be evaluated based on a certain set of criteria. Since financial performance is the key criterion in most cases you need to have an idea about future financial impacts. A key tool to asses this impact is the cost-benefit analysis which is used to determine the net effect of potential revenues and costs.

1 Q&A

Competitive Response

In a competitive response case study, your job is either to analyze what your client should do in response to a move performed by a major competitor or to anticipate what competitors will do in response to a move performed by the client

Opportunity Costs

Opportunity costs are an economic concept to quantify benefits of (discarded) alternatives. They measure the lost benefits that occur if you choose the best alternative instead of the second best one.

Mergers and Acquisitions

Mergers & Acquisitions are often the answer to broader problems introduced in your Case interviews. Analyze feasibility, assets, target and industry to crack the Merger & Acquisition case

Verwandte Cases

General Holding

34,0 Tsd. mal gelöst
4.3 5 1172
| Bewertung: (4.3 / 5.0) |

Der Klient ist eine französische Holding, welche einen jährlichen Umsatz von €1 Milliarde hat. Sie halten fast alle Arten von Unternehmen, die meisten in der „Low tech Herstellung“, darunter unter anderem auch „Öl & Gas“ und „Automobil“ Firmenteile. Es gibt keinen bestimmten Bereich auf den sie ihr ... Ganzen Case öffnen

Chip equity

27,6 Tsd. mal gelöst
4.5 5 970
| Bewertung: (4.5 / 5.0) |

Unser Klient ist Chip’n‘Chip, eine Holding für Unternehmen aus dem Elektronikbereich. Sie möchten in OnBoard, ein Platinen Hersteller, investieren und fragen, ob es eine gute Investition ist. Wie würdest du ihnen helfen? Ganzen Case öffnen