Product-market synergy Essay Example

profile, their activities and their products features. Synergy component of strategy is a natural companion to the competitive advantage. By evaluating the potential synergy described as individual skills, facilities, organizational or management skills, the items with the strongest potential are selected for the synergy component of strategy.

The use of synergy influences the New Product Development Process through the Synergy Strategy. When a business is linked to another business with the same firm or division, Synergy Strategy occur. This link facilitates the sharing of sales force, office or warehouse and can be a vehicle in promoting the new product in combination with the existing products. (Aaker, p. 8) Service is a type of product a firm can offer the consumers.

According to Atuahene-Gima, there are two main types of service-company synergy: 1. the Innovation-Market synergy, and 2) the Innovation-Technology synergy. The Innovation-Market synergy indicates whether the new service can be more efficient than the current service in terms of research, delivery, distribution, promotion while the Innovation-Technology synergy indicates whether the new service applies new and modern technological and engineering skills and resources.(Atuahene-Gima, 1996) Synergy Strategy may also be applied in service oriented firms, in that, firm having combination with the business catering to the materials and resources related to the service will give efficiency on the rendition. Customer satisfaction sustains the business of the firm.

The demand of the customer for the new product rely on their acceptance and satisfaction, perceived product quality, outstanding performance over the existing products, satisfies new needs and desires and the product-communication combination. (Storey and Kelly, 2001 based on Sampson’s work in 1970)