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Can I talk about synergies for a market entry? If no, what's the right term? Thankss

Anonymous A asked on Nov 17, 2019 - 6 answers

Thanks!

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Vlad
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replied on Nov 17, 2019
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Hi,

You can have synergies when the two companies are merging:

  • Revenue synergies
  • Cost Synergies
  • Financial synergies

I don't see how it's applicable to market entry unless you are acquiring a local company.

It's applicable to talk about key capabilities that will allow you to win the market share

Best

Deniz
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replied on Nov 17, 2019
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Hi,

Synergies could be applicable if M&A is involved with the market entry strategy. Synergies can be realized with top-line (additional revenues) or bottom line (lower costs) growth. There are also negative synergies (i.e. additional investments required in marketing etc.) that one needs to think about as well.

Best,

Deniz

Antonello
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replied on Nov 17, 2019
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Hi,
I would prefer "advantage" or "benefit".

Best,
Antonello

Carl replied on Nov 17, 2019

Look at capabilities.

Best.

Anonymous B replied on Nov 17, 2019

I agree with the other comment.

When looking at "synergies" for a market entry case, I would rather refer to this as the "current company capabilities". Here, you will be able to look into currently established distribution channels, cross-selling opportunities, connections/relationships, etc.

Naturally, I tend to connect the word "synergy" with M&A activity and you don't want to give the impression that you're mistaken on what the client is looking to do.

Federico
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replied on Nov 17, 2019
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Hi,

the definition of "synergy" will help you. A synergy takes place when the combined value and performance of two companies will be greater than the sum of the separate individual parts.

Depending on the market entry strategy, if it is rolled out by making mergers and acquisitions (e.g. Company X acquires local company Y to enter the ZZZ market), there could definetly be potential synergies to evaluate.

Hope that helps!
Federico

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