Types of Synergies

Three kinds of synergies by combining and customizing

resources differently
Modular synergies:
Airlines and hotels (non-equity alliances best way)
Sequential synergies:
Rigid contracts or equity based alliances
Reciprocal synergies:
Acquisitions is the best way
Nature of Resources
Synergies should be created using hard or soft
resources?
Relative importance of soft to hard resources:
Low:
non-equity alliance
Low/medium:
Acquisition
High:
equity alliance
Extent of Redundant Resources
High:
acquisition/ merger preferred
Medium
Equity Alliance
Low:
Non-equity alliance

Market Factors
Degree of Uncertainty:
For a particular collaboration, the degree of
uncertainty can be low, high or medium
High uncertain:
Equity alliance
Low/ Medium:
Acquisitions
Low:
Nonequity alliance
Forces of Competition
Degree of competition for resources:
Low: non-equity alliance
Medium: equity alliance
High: Acquisitions