What is the concept of synergy in corporate strategy?

• A. The Idea That Combined Businesses Create Greater Value Due to Shared Capabilities, Economies of Scope, or Cross-Selling
• B. The Conflict Between Departments Reduces Overall Value
• C. Synergy Means Reducing the Number of Product Lines
• D. Synergy Is Only Achieved Through Mergers

Answer: (A)

Synergy in corporate strategy means that when two or more business activities are combined, they create more value together than they would separately. This happens when shared capabilities, economies of scope, or cross-selling opportunities allow the whole to be worth more than the sum of its parts. The best option captures this idea by pointing to greater value through leveraging common capabilities, spreading costs across multiple units, and selling more to existing customers.

That understanding helps distinguish it from the other statements: conflicts between departments describe a clash that reduces value, not synergy; reducing the number of product lines is a simplification decision rather than a value-creating collaboration; and saying synergy only comes from mergers ignores many other ways to achieve it, such as partnerships, shared services, or internal coordination.