So, it was an important opportunity for Adidas and Reebok to have a combined competitive strength over the leader Nike, a famous brand in its fashion, status, colours and combinations. Moreover, airlines incorporate strategic decisions geared towards attracting new and larger markets through provision of effective and efficient airline services that meet the growing demand. Nike, on the other hand, is not worried about them and is only concerned with themselves. In a On a like-for-like basis, Reebok segment sales declined by 5% in 2007. Merger Integration: Delivering on the Promise A Series of Viewpoints on Mergers, Acquisitions, and Integration Executive Summary From airlines to automobiles to advertising, the urge to merge has escalated steadily over the past decade. This happened in 1972 Olympic games in Munich where 1164 out of 1490, athletes who were competing, were wearing Adidas shoes.
Meanwhile, the Herzogenaurach, Germany-based Adidas posted a 30 percent gain in second-quarter net profit and improved sales. The athletic clothing and footwear industry not only manufacture products for professional athletes, but also college students as well as the general public. The case presents the rationale behind the decision to merge. Following the acquisition of Reebok in August 2. Nike was the common competitor for both Reebok and Adidas. Although there were reports of declining sales of Reebok in the North America in the early years of its acquisition but this was due to the currency-neutral sales in the Reebok which is now associated to the turnover. With the merger, the borrowings of the united company will be high.
The company's clothing and shoe designs typically feature three parallel bars, and the same motif is incorporated into Adidas's current official logo. Both the companies are diversified in terms of products, management and financials, the management had designed a separate strategic marketing methodology to improve the performance of both the companies. Type SeeensdnbjjdS Subsidiary Industry Sports Equipment Founded 1895 in England, in United Kingdom Founder J. The share prices of both the companies recorded an increase on the day of the announcement of the deal. A merger of the size like Adidas-Armani has repercussion for the labor force of these companies transversely to the world.
For a global organization like adidas its marketing mix is tailored to specific markets. This management case study discusses the merger between Adidas and Reebok. Adidas is a premium brand and Reebok is a wholesaler brand and hence the merger entity can acquire the upper, middle and lower level markets around the globe. An acquisition may be private or public, depending on whether the acquiree or merging company is or isn't listed in public markets. The company's clothing and shoe designs typically feature three parallel bars, and the same motif is incorporated into Adidas's current official logo.
The customers will have a wrong perception in getting accustomed to the brands if and only if the management is able to establish and clear off the doubts of the customers. The combined entity will have a more complete portfolio of brands that caters to a global consumer base. Every merger and acquisition has its own reasons based on organizational goals. The use of online tools has helped to enhance the accessibility among users. Obstacles and Disadvantages due to the Merger The merger will always have some obstacles or disadvantages along with the advantages. Scope Highlight the impact of Leadership on Mergers and Acquisition. Even the investments will be encouraged in both the companies thus wiping out the chances of any discrimination.
Though the brand names are not changed and made into single entity, both the brands as separate had many advantages due to the merger. As an aspirational global sports. Words: 1344 - Pages: 6. It can be identified through performance measurement and evaluation. The company had increased the sales as well as the market capitalization due to the merger. Their web sites are well- prepared and updated promotions attract online shoppers.
Nike is the world's largest sports goods, apparel and equipment maker. By the year 1960 Adidas became the favorite brand in footwear among athletes in Olympic games in Rome where 75 percent of athletes were wearing Adidas shoes. The substitute products of the premium branded Adidas will risk the brand value of the same. The distribution system performs transactional, logistical, and facilitating functions. The share prices of both the companies recorded an increase on the day of the announcement of the deal. Nike had strong market share in the United States and the European Union. Mergers enhance the existent position of either company as it creates a stronger financial base for the merging companies through an increase in revenues realized together with a reduction in the operational costs incurred.
Reebok which has very little presence in the Asian continent will gain power with the help of Adidas. Threats Adidas and Reebok served as two different brands till the merger. A merger of the size like Adidas-Armani has repercussion for the labor force of these companies transversely to the world. Emerging markets: The market analysts were doubtful about the merger being a strategy to withstand the competition from the nearest rival, Nike. In today's global, competitive environment, mergers are sometimes the only means for long-term survival.