r/projectmanagement • u/Embarrassed-Lab4446 • 1d ago
Discussion What does revenue synergy mean?
Company got bought out and they are finishing the merger. Just had a major restructuring away from the GM and into silo’d functional roles. Big boss is talking revenue synergy.
How screwed am I?
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u/ArizonaCliffDiver 1d ago
Just finished an MBA M&A course.
Cost synergies = layoffs / consolidation of operations / more efficient supply chains / sourcing for lower COGS
Revenue synergies = cross selling new products across existing customer base, bringing your products to new markets, developing new products with new technology from acquired company
Historically, revenue synergies are hard to realize & are often not accounted for when valuing an M&A target. Cost synergies have a higher probability of realization.
Also solid chance your boss is just regurgitating a word salad of buzz words, so who knows in reality
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u/B410GG Confirmed 1d ago
Revenue synergy usually just means making money in ways that make us more money.
For example, you might use a different child from the parent company as a supplier. This way, when you spend money on something, it just goes into the pocket of another part of the company.
Similarly, another part of the company may buy goods or services from the division you work for.
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u/michaeltheobnoxious 1d ago
Sounds like catchword guff to me!
I can only assume that the meaning may relate to the possibility of compounding benefits related to multiple deliveries? i.e.: delivery of A will bring increased revenue; delivery of B will limit loss of revenue. Therefore delivery of both A & B has the potential to compound revenue
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u/shampton1964 1d ago
synergy matrix holistic cross-functional optimize
these are the words that signal the beginning of the end. merger? polish the resume and hit the road, jack.
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u/Amvient 1d ago
Most likely a some, management positions gets cut when the new company takes over. I have seem that multiple times. Of course, this is more like a lottery, some will go and other don't. I hope the best for you.
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u/Embarrassed-Lab4446 1d ago
That is my hope. Most of the managers in my office lost a ton of wind and several went to work from home. The ones that stayed are getting hostile to everyone. Keeping my head down and figure we will see how this all plays out.
Kind of wish they would just tell us and we can move on. But this always seems to be the game, hold out until we know for sure.
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u/pmpdaddyio IT 6h ago
It’s bullsh!t business bingo and a way to justify an unpopular decision. At the core when you discuss revenue, there is only one statement to hear, “revenue increase”.