Strategic Cooperation
Four Elements of Strategic Synergy
1. Product and market scope
The product and market scope indicates what industry the enterprise belongs to and its position in the industry. Because large industries are often too wide, their products and technologies involve many aspects, and the content of operations is too extensive, the scope of products and markets often need to be described by industry, so that the main line of common management of enterprises can be clearly expressed.
2. Growth vector
The growth vector, also known as the growth direction, does not involve the current product and market situation of the enterprise, but rather indicates the direction of the enterprise's operation, that is, the direction from the existing product and market portfolio to the future product and market portfolio.
Enterprise Growth Vector Matrix
Market penetration is through the current products and market share growth to achieve the purpose of enterprise growth.
Market development is to find new consumer groups for enterprise products, so that products bear new vision, as the direction of enterprise growth.
Product development is the creation of new products to gradually replace existing products, so as to maintain the growth of enterprises.
A variety of business is unique, its products and markets are new, the enterprise has entered a new business field.
In the first three options, the main line of joint operation of enterprises is clear, either to develop new markets, or to develop new products, or both at the same time. However, in diversification, the main line of joint operation is not clear enough.
3. Competitive advantage
The description of competitive advantage is the special attribute of a certain product and market combination of an enterprise, which can bring a strong competitive position to the enterprise. American strategist Michael. Machel Porter presents three alternative competitive advantages. That is: cost leadership, concentration and distinctiveness.
4. Synergy
Synergy is often described as a 1 1>2 effect, which means that the benefits generated by the joint efforts of the business units within the enterprise are greater than the sum of the benefits created by the individual efforts of the business units. Ansoff divides synergy into: sales synergy, I .e. the use of common sales channels and warehouses for various products of the enterprise, etc., and operational synergy, I .e. the use of the management experience and expertise of another unit in a business unit. If the synergy is used improperly, it will also produce negative synergy, resulting in a result of 1 1<2, which is called internal friction.
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