What does synergy in a business context mean?

Synergy in a business context refers to the concept where the combined efforts or resources of two or more entities result in a greater overall effect than the sum of their individual effects. This can manifest in various forms, such as improved efficiencies, enhanced innovation, or better strategic advantages. When organizations merge or collaborate, the goal is often to create synergy by integrating their strengths, which can lead to increased productivity and effectiveness.

For instance, when two companies combine, they might share technology, expertise, or market access, which together can unlock new opportunities and drive revenue growth in ways that would not be possible if they operated separately. The idea behind synergy is that the collaboration itself creates additional value that exceeds what each company could achieve independently. This is why combining activities for a greater outcome accurately captures the essence of synergy.