What is the evidence for synergy and what were the reasons for failure in the two examples: Quaker Oats and Snapple, and Sony Pictures Entertainment?

Synergy is the concept that the performance and value of two business organizations merged is

greater than total sum of the individual business units. As such, this term is commonly used in

situations of mergers and acquisitions. Prospective financial benefit attained through

combination of two or more companies is actually the impetus of most mergers and acquisitions.

Shareholders benefit if share price increases after sealing off a merger because of its synergistic

effect. Generally, prospective synergy realized through a merger is an outcome of various

factors such as combination of talents and technologies, cost reduction and increased revenues.

The major goal of mergers and acquisitions is to improve companies’ financial performance for

their shareholders. Two companies combine to form a single company that can produce more

revenue than each individual company can do independently, or establish a single company that

eliminates redundant processes and reduce cost of production. Owing to this understanding of

this concept, prospective synergy is evaluated during deliberations on a merger and acquisition

deal. When two companies realize merging will enable them to create greater scale or efficiency

the result is also known as synergy merge.

The rise of Quaker Oats began with the acquisition of Gatorade in 1983. Acquisition of

Gatorade led to better market positioning of Quaker at the top of a beverage market that was untapped. Up to date, the company commands 80% of the beverage market (Winer 1). The

acquisition of Gatorade has enabled Quaker to realize a consistent double-digit growth since

1980s. In 1990s, Quaker’s decision to acquire Snapple another beverage market player gave the

company another opportunity to achieve vital synergies (Winer 1). Even though, Snapple was

not competitive enough to face major market players like Coke and Pepsi, Quaker believed it had

adequate financial resources and vast leadership experience needed to market it and expand

nationally and globally (Winer 2).

PLACE THIS ORDER OR A SIMILAR ORDER BELOW TO GET AN AMAZING DISCOUNT. See also, capstone project assignment help in UAE, UK, USA