How do you find and use strategic synergies?

1 Identify potential synergies

The first step to finding strategic synergies is to look for opportunities where you can combine or leverage your resources, capabilities, or markets with those of another entity. You can do this by analyzing your internal and external environment, such as your strengths, weaknesses, opportunities, and threats (SWOT), your value chain, your customer segments, and your industry trends. You can also use tools such as the Ansoff matrix, the BCG matrix, or the McKinsey 7S framework to identify possible growth strategies based on synergies. For example, you might find synergies by entering a new market with an existing product, diversifying your portfolio with a related product, or partnering with a complementary business.

2 Evaluate feasibility and impact

The next step to finding strategic synergies is to assess whether they are feasible and worthwhile. You need to consider the costs, risks, and benefits of pursuing a synergy, as well as the alignment of vision, culture, and values between the entities involved. You can use tools such as the VRIO framework, the Porter's five forces analysis, or the balanced scorecard to evaluate the value, rarity, inimitability, and organization of your resources and capabilities, the attractiveness and competitiveness of your industry and market, and the financial, customer, internal, and learning perspectives of your performance. For example, you might evaluate a synergy by estimating the return on investment, the market share, the customer satisfaction, and the innovation potential.

3 Implement effectively

The final step to finding and using strategic synergies is to implement them effectively. You need to plan and execute the actions and changes required to realize the synergy, such as merging, acquiring, collaborating, or outsourcing. You also need to monitor and measure the results and outcomes of the synergy, such as revenue, profit, efficiency, quality, or customer loyalty. You can use tools such as the SMART goals, the project management triangle, or the key performance indicators to set specific, measurable, achievable, relevant, and timely objectives, to balance the scope, time, and cost of the project, and to track and evaluate the progress and impact of the synergy. For example, you might implement a synergy by creating a joint venture, a cross-functional team, or a shared service center.

4 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?