The battle over leadership in the sport industry: Adidas vs. Nike

Type :

Presentation

Pages :

3 pages

Format :

.doc

Published date :

01/12/2009

Category :

Business & market

Sub category :

Business strategy

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Summary :

Introduction.
The undeniable benefits of the deal between Adidas and Reebok.
1. Increase in market power.
2. The complementary strengths of Adidas and Reebok in different geographic locations.
3. The genuine motivation of the acquisition.
Stakes involved in the Adidas/Nike match.
1. Research and Development (R&D).
2. Methods of production.
3. Dominating the growing sectors: Female market and soccer.
Conclusion.
Bibliography.

Abstract

According to public opinion, sport is undoubtedly related to pleasure, relaxation and physical activity. However the reality is in fact poles apart from this simplistic landscape and sport is above all a colossal industry, which represents a billion-dollar market. The recent acquisition of Reebok by adidas is a good example of the stakes on this particular market.Indeed, on the 3rd of August 2005, German sporting goods giant adidas agreed to purchase Reebok International Ltd. for approximately $3.8 billion, that is to say 34% more than Reebok's share price at the time. As indicated by adidas CEO Herbert Hainer, "the deal represents a major strategic milestone for the group. This is a once in a lifetime opportunity to combine two of the most respected and well-known companies in the worldwide sporting goods industry ». Therefore, the posted goal is clearly to challenge the leadership of nike.
However, even though this deal represents a consolidation between the number 2 (adidas) and the number 3 (Reebok) on the sporting goods market, the combined company remains behind the apparently irremovable leader nike. As a result, we will focus our analysis on this burning issue: is adidas able to become the leader on its market after the acquisition of Reebok?