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Synergy & Value Propositions

Aaker, D. A. (2011). Strategic Market Management. Hoboken: John Wiley & Sons, Inc.

1. What is synergy? What are the sources of synergy? Give examples.

2. Consider three industries, such as hotels, appliances, or computers. For three firms within the industry, identify what value propositions are representing their strategy. Were there multiple propositions? Evaluate. Are they successful or likely to be successful?

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1. What is synergy? What are the sources of synergy? Give examples.
Synergy is when two or more forces come together to constitute a power that is greater than the individual sums. Aaker points out that synergy between business units can offer sustainable competitive advantages. An example is Netflix distributing and streaming their own self-produced shows. The ability to be both the creator and distributor offers the company an advantage in the market place. Synergy is the result of taking advantage of assets and competencies. For example, Apple is able to maintain its pricing structure, quality of its products, and brand image by having its own retail stores. The combined power of multitude of Proctor & Gamble products works to strengthen the brand name in the minds of consumers. Synergy also comes from companies partnering together. Consider Walt Disney and McDonalds. The company's partner for toys in happy meals, both offering excitement to their youthful consumer, spreading the news of Disney's new films or attractions to McDonald's wide customer base. Another similar example is ...

Solution Summary

This detailed solution defines synergy, offers sources of synergy and examples. It also provides 3 companies in 3 different industries and their value proposition. It evaluates if these are successful. Includes reference.

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