Advanced Corporate Strategy

ST104x

Synergies: Sharing of activities

Synergies arising out of sharing of activities are also referred to as “operative synergies”.
These operative synergies may be specific to the firm and represent specific activities that
multiple businesses may share.

Some examples of corporate advantage arising out of activity sharing may include
• common manufacturing facilities,
• distribution networks, or
• common warehouses.

Advantage arising out of operating synergies typically provide weaker advantage than when
intangible resources are shared.

Consider Wim Plast Limited, an Indian company that manufactures a range of products
including
• kitchen casseroles, jugs and flasks;
• molded furniture for home and office use;
• writing instruments – pens and accessories;
• oral hygiene products – toothbrushes;
• building materials – false ceilings and guard boards;
• as well as consumer durables like desert coolers for home and office use.

Wim Plast leverages its plastics manufacturing technology, moulding technology to enter a
variety of seemingly unrelated businesses. These businesses possibly would have common
suppliers, share manufacturing facilities, and are sold under a common mother brand “Cello”.

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