synergy

noun

syn·er·gy | \ ˈsi-nər-jē

plural synergies

Definition of synergy

1 : synergism broadly : combined action or operation

2 : a mutually advantageous conjunction or compatibility of distinct business participants or elements (such as resources or efforts)

Did You Know? Example Sentences Learn More about synergy

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Did You Know?

An old saying, "The whole is greater than the sum of its parts", expresses the basic meaning of synergy. The word is sometimes used in a purely physical sense, especially when talking about drugs; sometimes a "cocktail" of drugs may be more effective than the sum of the effectiveness of each of the separate drugs. But the word is best known in the world of business. The notion that, when the right two companies merge, they'll produce a profitable synergy seemed exciting in the 1990s, when synergy became a trendy buzzword (even though it's actually been around since the 17th century). The idea of synergy was one factor in what became a "merger mania;" unfortunately, business synergy often turned out to be harder to achieve than to imagine.

Examples of synergy in a Sentence

A synergy has developed among the different groups working on this project. two companies that have found synergy

Recent Examples on the Web

The deal was projected to produce about $2 billion in cost synergies by 2021, and sources have estimated that the merger will eventually result in as many as 4,000 job cuts. — Ryan Faughnder, Los Angeles Times, "Disney lays off nearly 60 employees in media distribution following Fox purchase," 29 Aug. 2019 Philip Morris and Altria see scope in consolidating their manufacturing operations to generate annual synergies of more than $800 million, according to the source. — Reuters, The Mercury News, "Philip Morris, Altria said to be in merger talks," 27 Aug. 2019 Simply put, the cannabis plant consists of more than 80 cannabinoids, a variety of terpenes, flavinoids, etc that all work in synergy to bring the plant’s unique therapeutic qualities to life. — Mike Adams, chicagotribune.com, "What are the benefits of full-spectrum cannabis extracts?," 20 Aug. 2019 The joint company also possessed clear synergies: Showtime, which ended up going with CBS in the divorce, had a need for movies that Paramount, which stayed with Viacom, could provide. — Brian Lowry, CNN, "Viacom and CBS reunion likely marks first step into new frontier," 13 Aug. 2019 The addition of Aetna is expected to boost CVS Health's organic growth rate while resulting in $300 million to $350 million in cost synergies in 2019 and $800 million in savings next year, up from a prior forecast of $750 million. — Dallas News, "Motley Fool: CVS is in a prime spot, investing for your kids and this week's trivia," 11 Aug. 2019 The design of our project is to open up the neighborhood and the downtown and Water Street and create a synergy in the neighborhoods. — al.com, "Civic Center project pitches come to focus: ‘We are looking for an attraction’," 30 June 2019 There is a nice synergy there from the Emmy speech. — Channing Hargrove, refinery29.com, "Lena Waithe On Vintage Tees, Queer Designers & Sharing Clothes With Her Fiancée," 15 June 2019 The banks expect to save about $1.6 billion in annual net cost synergies by 2022. — Janna Herron, USA TODAY, "BB&T, SunTrust announce Truist Bank, the name of their post-merger bank," 12 June 2019

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'synergy.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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Last Updated

2 Sep 2019

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The first known use of synergy was in 1632

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More Definitions for synergy

synergy

noun

Financial Definition of synergy

What It Is

Synergy is the benefit that results when two or more agents work together to achieve something either one couldn't have achieved on its own. It's the concept of the whole being greater than the sum of its parts.

How It Works

Synergy is often one of the goals of a merger or acquisition. The two firms combined may be able to achieve higher profitability than either firm could achieve on its own. Synergy can be reflected in increased revenues and/or lower expenses.

For example, a company may acquire a similar firm, allowing it to expand its product offering and, as a result, increase its sales and revenues. This could not have been accomplished had the two firms remained independant.

In management, synergies may be created between management teams, resulting in increased capacity and workflow that was not possible when the teams were working independently.

As for costs, synergies allow for the creation of economies of scale. For example, a merger can reduce multiple levels of management and duplication and spread fixed cost technologies over larger operations.

Why It Matters

Synergies may be elusive, but they are one of the most important objectives in business. To acquire synergy will result in more efficiency, more efficacy and higher profitability.

Source: Investing Answers

synergy

noun