*Views expressed in this report are those of the authors

COMMGMT 3001International Management III-2007

Group Assignment

The Adidas Group and Reebok: North America

Authors:Elizabeth Ansara

Matthew LovellPatrick O’NeilPeter Romeo

2

Table of Contents

Executive Summary.......................................................................................3Introduction....................................................................................................4Differences and Similarities between Germany and the US.......................5

Government and Politics in Germany and the US ........................................5Law in Germany and the US ........................................................................6Economy in Germany and the US................................................................6Cultural Value in Germany and the US ........................................................7

Competitors....................................................................................................9Nike Incorporated.........................................................................................9Adidas ........................................................................................................10Puma..........................................................................................................10Current Trends ...........................................................................................11

Structure and Operations of Reebok .........................................................12Parent Strategy ..........................................................................................12Organisational Structure.............................................................................12Reebok’s Fit ...............................................................................................13Strategy......................................................................................................14Summary ....................................................................................................15

International Management Opportunities and Problems .........................16Opportunities..............................................................................................16Problems ....................................................................................................17Competitors................................................................................................17Product Differentiation................................................................................18Cultural Differences....................................................................................18Manufacturing.............................................................................................19Social Responsibility ..................................................................................19Staffing .......................................................................................................19

Recommendations.......................................................................................20Possible Solutions......................................................................................20The integration process..............................................................................20Solution for perishable product issue .........................................................21Suggested solution for social responsibility issue.......................................21

Conclusion ...................................................................................................22Reference List ..............................................................................................23

3

Executive SummaryThe following report analyses the North American Reebok subsidiary, recently

acquired by the Adidas Group whose headquarters are located in Germany.

In assessing the Reebok subsidiary we found that the cultural differences

between Germany and the United States did not influence the operations and

management in Reeboks North American subsidiary as much as we first

expected. If the two organisations are to succeed in the years to come, the

cultural differences and similarities need to be considered and assessed for

cooperative decision making. The involved countries have comparable

characteristics in their political structures and subsequently it has not

adversely affected the two organisations since the acquisition.

As Reebok is the third largest sporting goods company in the world behind

Nike, combining Adidas and Reebok will prove to be a beneficial relationship.

Reebok and Adidas retain the second and third largest market shares in

footwear in the US. It was discovered that the acquisition was primarily

undertaken with the objective to obtain the largest market share over the

current US market leader, Nike.

Reebok adopts a decentralised Global Area/Geographic structure whereby

the North American subsidiary reports to the Reebok headquarters in Bolton,

England. The Adidas Group oversees the operations of the headquarters of

both Adidas and Reebok companies. The strategies of both companies were

aligned to utilise each other’s strengths to overcome each other’s

weaknesses. This strategy compliments the global area/geographic structure,

where Reebok and Adidas can pursue their individual goals while being

guided by a common strategic direction.

Thus, our recommendation following the acquisition is that Reebok should

balance their strong brand with Adidas’, each having separate identities and

ownership in different markets. The benefits of the merger should be focused

on areas such as distribution channels, economies of scale and

manufacturing networks. With the substantial savings generated by the

merger, Reebok should further diversify their markets and products.

4

Introduction

Reebok International Limited operates in the sportswear industry and is a

major producer of athletic footwear, apparel and accessories. Reebok was

founded in 1895, but was recently acquired in 2006 by another giant German

sporting company, The Adidas Group.

The following report analyses The Adidas Group’s acquisition of Reebok. The

first task in assessing the joining of corporations is to examine the many

differences and similarities among the United States and Germany. The report

will look at governmental, political, legal, economical and cultural

characteristics of the two companies. The next objective is to examine

Reebok’s top competitors in the sport’s apparel market. It is important to know

what other companies Reebok should be both watching out for and learning

from.

This report will then go on to the strengths and weaknesses of Reebok’s

organizational structure and operations. In addition a description of the Adidas

Group’s structure and operations is analysed. It is important to have

information about both the host corporation and its subsidiary for comparative

analysis.

The final component of this report discusses international management

opportunities and problems. Recommendations to resolve the issues

discussed.

5

Differences and Similarities between Germany and the US

Germany and the United States are two very different countries emphasised

by their dissimilarities in terms of geographics and population. Germany is

located in Europe and has a population of approximately 82.5 million people.

The United States has a population of over 301 million citizens and is

approximately 27.5 times larger in area than Germany (The World Factbook

2007). The Adidas Group began its operations with only offices in Germany.

However, overtime, the corporation expanded by acquiring Reebok. In

understanding how both of these organizations operate, it is first important to

analyse the differences and similarities between the United State’s and

Germany.

Government and Politics in Germany and the US

Despite their differences in geographical form and population, The United

States and Germany have some comparable characteristics. Germany is a

federal republic consisting of 16 states while the United States consists of 50.

Encyclopaedia Britannica online (2007) states that in Germany, “many of the

political structures were drawn from the models of the United States and other

federal governments.”

In both countries, each state has their own set of laws and government. Both

Germany and the United States are democracies with the formal head of

country being a president. In the United States, as well as having a president

there is also the senate consisting of 100 members and the House of

Representatives which has 435 members. In Germany, the Bundestag exists

which contains approximately 600 members, depending on the election

results (Encyclopaedia Britannica Online, 2007).

6

Law in Germany and the US

The legal aspects of the two countries have many similarities. The laws in the

United States are based on the constitution which was written in 1787.

Germany also had a constitution called the Grundgesetz. This took affect on

May 23, 1949 (Encyclopaedia Britannica Online, 2007).

Economy in Germany and the US

The economies existing in Germany and the United States are fairly different.

The US uses the dollar as their currency while Germany uses the Euro as its

formal currency. Currently, the Euro has a stronger exchange rate than the

US dollar. As of 3 May, 2007, on Yahoo! Finance (2007) one US dollar is

equivalent to 0.735 Euros. Therefore, what happens in the German economy

is crucial for both the rest of Europe and the entire world economy.

Throughout April, Germany’s economy has continued to improve.

Unemployment has declined a great deal and there are fewer than 4 million

Germans out work for the first time since October of 2002 (Moore, 2007).

There seems to be no big signs of future trouble within the German economy.

The US economy is the largest in the world. Countries like China and Japan

are continuing to gain economic recognition and the US seems to be playing a

smaller role as time goes on. Throughout the first quarter of 2007, the US

economy expanded at a slow 1.3 percent. This was the fourth quarter in a row

with economic growth that was just sub-par (NZ Herald, 2007). The German

economy seems to be growing in strength while the United State’s looks to be

slowing down.

7

Cultural Value in Germany and the US

The final component of analysis between the United States and Germany are

its cultural differences. Using Hofstede’s value dimensions, a better

understanding will be gained about the two cultures. The first dimension is

power distance which is essentially how willing the people in that culture are

in accepting a person that has a lot of power and influence over them. The

United States and Germany ranked 40 and 35 respectively (as shown in the

diagram below). Both counties ranked relatively low on this scale, meaning

that there is not a large gap between the people in charge and those that are

not.

The second value of Hofstede’s dimension is uncertainty avoidance. Germany

(65) is ranked higher in this characteristic than the US (46). This signifies that

Germany has a much higher desire for stability. Businesses in Germany are

likely to have stricter guidelines or rules for things that should be done than

those in the United States.

The third value is individualism verses collectivism. This compares people’s

preference to care for only themself and their immediate family, compared to

the notion that one’s identity is based on group membership. The United

States is much more individualistic than Germany, scoring 91 compared to 67.

This signifies that people in the US strongly believe that individual

achievement is ideal.

The final dimension is masculinity versus feminism. Germany (66) is only

slightly more masculine than the United States (62), meaning that in German

society, people are more likely to be assertive, materialistic and have less

concern for others. Due to the similarity in scores, Germany and USA are not

likely to have a great difference in behaviour based on this dimension.

(Deresky, 2006).

CountryPower

Distance IndividualismUncertainty Avoidance Masculinity

Long term orientation

Germany 35 67 65 66 31USA 40 91 46 62 29

8

Also of importance is the comparison of the long term and short term

orientations of each country. Both countries’ scores were similar and low,

indicating that managers use short term incentives and rewards for

employees.

A second way to assess the different cultural aspects of Germany and the

United States is through Trompenaar’s value dimensions. Both countries are

very universalistic, which means they have a high sense of obligation. They

rely on laws, contracts and rules. When it comes to emotional orientation in

relationships, Germany is more neutral while the US is more affective. The

United States is also more specific when involved in relationships whereas

Germany is more diffusive. The final value is achievement versus ascription.

There are a greater percentage of women and minorities in the workplace in

the US than in Germany. Also, in Germany status is based less on

competency and achievements (Deresky, 2006).

Having a better understanding of the similarities and differences between

Germany and the United States is crucial in assessing the Adidas Group and

Reebok in North America. The location of the subsidiary plays a significant

role in the organization’s competitors, how it is structured, problems,

opportunities that occur and what kind of solutions could improve the

company. By carefully analysing or considering the differences in the

respective cultures, problems such as miscommunication in management

could be easily avoided.

9

Competitors The three largest companies in the sportswear and sporting goods industry

are Nike, Adidas and Puma. Consequently, these companies also act as the

three strongest competitors to Reebok.

The chart below reinforces some of the arguments and analysis that will be

detailed.

Year End 2005 Adidas Reebok NikeEmployees 17,000 9,102 24,667

Major rankingsNo. 2 global maker of sporting goods

No. 2 U.S. maker of athletic shoes

No. 1 global maker of athletic shoes

U.S. athletic shoe mkt. share 8.90% 12.20% 36.30%

Global athletic shoe mkt. share 15.40% 9.60% 33.20%

Annual revenue $7.9 billion $3.8 billion $13.7 billion

Annual net income $326.5 million $192.4 million $1.2 billion

Current market cap. $8.9 billion $2.6 billion $16 billion

Wed. stock price close NA $57.14, up 30% this year$86.92, down 4% this year

Sources: Sporting Goods Intelligence, NPD Fashionworld, the companies, Reuters, USA TODAY research

Nike Incorporated

Nike is a major American supplier of athletic shoes (36.6%), apparel and

sports equipment with headquarters located in Beaverton, Oregon, USA. Nike

produces a wide range of sports equipment and is the largest sportswear

supplier in the world, with revenue for the 2006 financial year totalling $15

Billion. Nike has more than more than 26,000 employees working at over 500

factories, which are spread across 45 countries. Most of Nike’s factories are

located in the Asia. Nike has fierce competition form every sports brand due

to its large range of sporting goods. For a long time Nike had no direct

competitors because there was no single brand which could compete directly

with Nike’s range of sports and non-sports oriented gear until Reebok gained

market share in the 1980’s (Wikipedia).

10

AdidasAs discussed above Reebok is a subsidiary of Adidas. Adidas is a German

founded sportswear company that is part of the Adidas Group, consisting of

Reebok sportswear, Taylormade Golf Company, Maxfli golf balls, and Adidas

golf. It is the second biggest sportswear manufacturer in the world. Since its

formation in 1949, Adidas has been the official match ball supplier for every

FIFA World Cup and designs the official match ball for every edition of the

event. Adidas produces the kits of some of the biggest domestic and

international football teams including Real Madrid, AC Milan, Chelsea and

Liverpool, as well as 26 national teams. Adidas reported revenue of

$9.32billion for the 2006 financial year.

Puma

Another large competitor of Reebok in the sporting goods industry is Puma.

Puma is a German based multinational company that produces high end

athletic shoes and other sportswear (Wikipedia Encyclopaedia). Puma is the

third largest sportswear manufacturer in the world behind Nike and Adidas.

However, Puma does not compare to Nike in terms of employees with about

7,000 staff members compared to Nike’s 26,000. Since 1996 Puma has

expanded its operations in the United States. Puma is the main supplier of

racing shoes for Formula One and NASCAR and had the rights of sponsoring

the 2006 FIFA World Cup champions and the Italian national football team. In

February 2007, Puma reported that its profits had fallen by 26% to $43 million

during the final months of 2006. Most of the profit decline was from higher

costs linked to its expansion and consequently sales actually rose by more

than a third to $630m (http://news.bbc.co.uk/1/hi/business/6375175.stm).

11

Current Trends

The strongest sporting goods suppliers briefly described above are all

continuing to expand both production and sales internationally. It is important

to note that there are some risks associated with moving business to a global

level. The overseas markets in which all of the companies sell their products

are subject to the following risks which could have a negative impact on

financial position and business performance:

- changes in economic climate

- legal claims involving property rights

- negative impacts on product and corporate image due to the

occurrence of defective products

- unexpected changes in legal and regulatory systems

- terrorism, war, and other disruptions to the social climate

(ASICS Group, Summary of consolidated reports for the Fiscal year ending

March 31, 2006)

Working environments and conditions in overseas factories have become an

international issue, and sporting goods companies have been heavily

criticised in the past. Ever since the Nestle and Infant Formula scandal in the

1970’s there has been a growing increase corporations to be more socially

responsible and give back to the community (Rovenpor, 1996). By learning

about some of Reebok’s major competitors, trends and possible problems

with these trends, assessing and comparing the organization as a whole is

made much more effectively.

12

Structure and Operations of Reebok

Parent Strategy

The Adidas Group has a clearly defined corporate strategy. It states “Our goal

as a Group is to lead the sporting goods industry with brands built on a

passion for sports and a sporting lifestyle. We are focused on strengthening

and developing our brands to maximise the Group’s performance” (The

Adidas Group 2007). The development of this strategy can be clearly linked

to the corporation’s central group value, or in other words, its mission

statement to be the global leader in the sporting goods industry. They are

dedicated to sports and performance and are committed to using technology

and innovation to enhance this identity across their brands.

Organisational Structure

With a specifically stated Corporate Strategy, the company needs to ensure

that their organisational structure will allow for and be flexible to this strategy

being sought after. Their objectives outlined in the corporate strategy ensure

the mission statement will translate into action, while also guiding and

coordinating decisions. There is no purpose in having well thought out

strategic objectives, but no structure and cohesion to attain these objectives

(Melcrum publishing, 2006).

The Adidas Group comprises of a four person executive board, including one

Chief Executive Officer and three board members, each responsible for a

particular division. The company has also established a Supervisory Board,

consisting of six members representing the shareholders and six members

representing the staff. The Supervisory Board advises and supervises the

executive board in matters concerning the management of the company (The

Adidas Group 2007). It is the role of the supervisory board to ensure that the

pathway and vision determined by the executive board is forthrightly followed

by the rest of the organisation from the top, all the way down to those

entrusted with manufacturing their products.

13

The Reebok subsidiary utilises a Global Area/Geographic structure. The

Adidas group controls the Reebok headquarters in Bolton, England. As shown

in the diagram below, the North American, Asian and European subsidiaries

report to the headquarters in England. The North American subsidiary

consists of Canada, Mexico and the USA. Within each of these countries are

separate departments such as marketing, manufacturing, retail and design.

14

Reebok’s fit

Adidas has a clear mission “to be the leading sports brand in the world”

(Adidas Group, 2007).Adidas has always been primarily recognised as a

leading fashion brand compared to Reebok. This is highlighted with Adidas

establishing a Sport Style division directed at the fashion conscious consumer

(Anniss, E.; Carofano, J.; 2006). Reebok’s mission is to “always challenge

and lead through creativity”. Their strategic focus is to become a consumer-

driven brand, empowering individual achievement by supporting athletes and

consumers to realise their unique dreams and goals (Adidas Group 2007).

Reebok is an American-inspired global brand, not commonly linked to being

fashion savvy. They are built upon a strong authenticity in sports. Therefore,

with no effort of concealment, the Adidas Group openly states that the major

motive for purchasing Reebok was to help the company make inroads in the

US, a Nike dominated country. More than 50 percent of the Reebok business

is generated in North America. Reebok's products complement Adidas

traditional strength in sports such as soccer and give the German company

some big-name basketball player profiles (Norton, K.; Holmes, S.; 2006).

Strategy

The Reebok acquisition is an extension of a Growth/Expansion strategy. This

occurs when the purchased company (Reebok) is completely absorbed as a

subsidiary of the acquiring company (Adidas Group). The key role of the

Adidas Group management now is to use its knowledge of their organisation

and market to define and shape this expansion opportunity into a profitable

facet (Mishina, Y., Pollock, T., Porac, J., 2004). Furthermore with their

intention of tapping into the North American market, the Adidas Group’s use

of Reebok can be looked upon as a facet of a multi-domestic strategy. This is

purely for the fact that careful attention has been paid to customising their

product offerings and marketing in accordance with the local responsiveness

in North America.

15

Summary

The Adidas Group’s purchase of Reebok North America showed an obvious

attitude to ensuring that the Corporation’s overall objectives will be achieved.

With the acquisition, a focus on increasing the band’s apparel offerings and

sharpening the brand's image has been set. This will allow for an expansion of

global position and gaining a broader presence in key markets. To emphasize

this fact, Adidas has now replaced Reebok as the official apparel supplier to

the American National Basketball Association for the next 10 years. With the

two company’s combined strengths, an aim to widen the organisation’s overall

profile and global dominance is now more than ever possible (Kletter, M.,

Conti, S., 2006).

16

International Management Opportunities and Problems

The most important factor, in recent years, for Reebok’s success in their North

American subsidiary is the approval for the acquisition of Reebok by the

Adidas Group. This will result in numerous international management

opportunities and problems to be faced by Reebok North America.

Opportunities

Reebok retains the second largest market share in the US athletic shoe

market and integrated with Adidas, who retain the 3rd highest market share in

that industry, will prove a formidable competitor for market leader, Nike

(Howard T., Barry K., 2005). Significant opportunities exist in Reebok’s North

American subsidiary to further expand their operations, customer base and

market share through the diversification of their product lines and target

markets and the aggressive promotion of larger marketing campaigns. This is

feasible due to the substantial cost savings generated by the merger, which

can be re-invested into developing Reebok’s market presence. This

opportunity is reinforced by Adidas CEO, Herbert Hainer, who views the

merger as a way to fuel growth rather than to save money. Continued market

diversification and expansion into international markets will find new potential

customers (Olsson, J., 1996).

According to Reebok’s website, strategic and financial benefits of the merger

include an extended geographic reach, a broader portfolio of world-renowned

brands, enhanced Research & Development (R&D) capabilities and cutting

edge technology, strong operating cash flows and substantial operational

synergies.

Reebok’s mission is ‘to enrol global youth through sports, music and

technology,’ which complements Adidas’ mission, ‘to be the leading sports

brand in the world with a focus on performance and international presence.’

Herbert Hainer, CEO of Adidas, believes that the complementary nature of the

17

two businesses in various geographies, products and consumer segments

provides a significant opportunity for increased value creation.

Reebok North America can also benefit from sharing strengths with Adidas,

where Reebok has been quicker to seize on cultural trends, like hip-hop, but

Adidas has had a stronger tradition of design improvements. If utilized

effectively, Reebok can advance their existing products through design

improvements, and invest in developing new and market-leading innovative

products.

However, even though the combination of Adidas and Reebok looks great on

paper, the merger presents many potential problems, considering the

previous merger failures of Daimler-Benz and Chrysler, Quaker and Snapple

and HP and Compaq (Bliss J., 2005). Reebok North America faces a number

of problems in managing its new portfolio and executing its new products and

marketing plans that allow two big brands to complement each other rather

than duplicate efforts (Bhan, N., 2005).

Problems

Due to Reebok’s existing large global stature, their problems are mainly

limited to the threat from competition from rival companies and from

international managements’ perspectives of the company’s operations in

different geographical locations across countries (Jacob, L. & Herbig, P.,

1998).

Competitors

To keep-up with the competition's penetrating efforts will cost a lot of money

and put a lot of pressure on marketing and research and development

(Olsson, J., 1996). Reebok has to exhaust considerable financial resources in

developing products and developing marketing campaigns to attract new

customers and retain existing customers from competitors such as Nike and

Puma.

18

Product DifferentiationReebok is continually striving to establish product differentiation in terms of

brand identification and the product itself from its rival competitors. One

problem for Reebok is the highly perishable nature of their products, in

particular their footwear, which have extremely short product life styles. This

may be addressed through further international diversification by manipulating

the marketing of different product niches in different nations (Olsson, J.,

1996). For example, if the sale of one Reebok product is declining in North

America, the same product may be launched in South East Asia.

Another issue facing Reebok is the integration of Adidas and Reebok brands.

At this stage, Adidas and Reebok will continue to have their own sales forces,

distribution channels, marketing campaigns and brands. However, according

to Steve Stoute from Translation Consulting and Brand Imaging, who is

involved in current Reebok campaigns, he identifies that there is a potential

problem if consumers see the lines as being blurred.

Cultural Differences

According to Jeffrey Bliss, president of Javelin Group (a sports marketing

firm), the German mentality of control, engineering and production, versus the

US market-driven culture, in reality, will contribute to the merger not ‘denting’

the market, as Nike is already too dominant (Kiley, D, 2005).

Although Adidas’ headquarters is in Herzogenaurach, Germany and Reebok’s

headquarters in Massachusetts, United States, both have continued its

operations since the merger. However, potential conflicts could arise in the

management of Reebok, now that influence can be exerted by Adidas’

executives. The cultural differences between Germany and North America

that were talked about earlier could harvest internal management disputes

and miscommunication.

19

Manufacturing

Reebok’s Hong Kong based manufacturer, Yue Yuen Industrial Holdings Pty

Ltd (0551.HK), also makes shoes for Adidas, and concern has been

expressed for the greater demand of economies of scale and possible decline

in orders.

Social Responsibility

The manner in which a company is perceived by the societies within which it

is based and operates plays a major part in determining whether that

company is welcomed or rejected by that society (Werther W. B., Chandler D.,

2005).

Unfortunately, Reebok has encountered public exposure to violations of

health and safety conditions in manufacturing factories, breaching human

rights and in the ignorance of environmental sustainability for many years.

In March 2006, one of Reebok’s bracelets was linked to a child’s lead

poisoning death and later that year, a massive recall was initiated following

revelations that Reebok’s children’s wind-suits were a choking hazard.

Despite a number of attempts to address such pressing issues, the efficacy

and outcomes of such attempts is still uncertain.

Staffing

Although it has been stated that Reebok did not “anticipate significant work

force reductions”, distribution in Reebok facilities in Memphis and Hebron will

cease in 2008 and facilities in Stoughton, Norwood and Spartanburg will

cease in 2009, which will affect approximately 375 staff (Conroy, E., 2007).

Further work force reductions could occur due to the integration of Adidas and

Reebok distribution systems.

20

RecommendationsFrom the above analysis, it is clear that substantial deficiencies may arise

following the acquisition of Reebok by the Adidas Group. There are however,

numerous steps that Reebok and the Adidas Group can make to alleviate

some of these problems. Seemingly, it is thought that enhancing Reebok’s

strengths with Adidas’s strengths will be the most beneficial recommendation

the company could undertake to increase its global position.

Possible Solutions

Reebok should continue to come up with innovative ideas for advertising,

including using high profile sporting athletes in the use of product

endorsement.

With such an acquisition, the process of further enhancing the Adidas brand’s

fashion image as well as their own sporting market power with that of the

already established Reebok will help in the attainment of Reebok’s mission

and goals.

The combination could be powerful in growing markets like China. Adidas is

well-established in China, having set a goal of generating $1.2 billion in sales

there by 2010. Reebok has the most sought-after Chinese athlete as a

spokesman: the basketball star Yao Ming. This is an example of how the

relationship between Reebok and Adidas can be mutually beneficial.

The integration process

Careful attention should be paid to the integration process of the two

companies. Volker Riehm, fund manager at Activest stated that it won't be

easy to integrate the businesses. Adidas' focus is on sport, but Reebok's is on

lifestyle. Consequently the Adidas Group cannot assume that Reebok and

Adidas customers will want the same types of products. Thus any move to

eliminate one style of product could result in a loss of customers and sales

revenue.

21

Solution for perishable product issue

By diversifying into multinational markets it may be possible to pro-long the

very short product life cycles. This is done by manipulating the marketing of

different product niches in different nations. For instance, if the sale of one

product-line is declining in the USA, the same product may be launched in

South East Asia. The financial strength of the company makes it possible for

Reebok to continue to ensure market leadership with effective research and

development strategies. We recommend that Reebok continue to invest in

developing and designing innovative products.

Suggested solution for social responsibility issue

Reebok must continue to promote and raise awareness of such issues to

maintain and continually improve their social perception and responsibility in

order to warrant loyalty from its customers, employees, suppliers and to

comply with legislative regulations.

Reebok has exhausted vast resources in the implementation of a number of

programs to promote environmental sustainability, ethical business operations

and minimise violations of human rights. Continued investment into the

development of such programs is recommended.

22

ConclusionReebok North American has a lot to offer the corporation. Though both Adidas

and Reebok offer its clients sports apparel, each brand has different

objectives, target customers and style. The merger or acquisition of any

company can be difficult, especially if those companies come from different

countries and are world-known multi-million dollar corporations. However, with

joint cultural understanding, realistic goals, and strong organization, Reebok

North America can continue to grow and profit for The Adidas Group, making

the corporation its most profitable subsidiary.

Following its acquisition by Adidas, Reebok is in a strong position to increase

its market share in North America and overtake market leader Nike. Through

effective strategic planning and the alignment of a compatible structure,

Reebok will be able to increase their global strength in the sporting goods

industry.

Reebok North America faces many opportunities for diversification, expansion

and increasing their market share, but the internal management of such

processes and future growth opportunities, and the resolution of the problems

mentioned above, will ultimately determine its long term success.

23

Reference List

Adidas Group, 9th May, 2007 [last update], Strategy,http://www.adidas-group.com/en/overview/strategy/default.asp

Adidas Group, 9th May, 2007 [last update], Supervisory Board,http://www.adidas-group.com/en/overview/supervisory_board/default.asp

Anniss, E., Carofano, J., April 2006, Adidas Group, Rocky Reebok Still a Big Challenge for Adidas, Footwear News

Bhan, N., August 4, 2005, Business Strategy, Industrial Design, Innovation, When Brands collide- Adidas eats Reebok

Columbia Encyclopaedia, The; Sixth Edition (2006) Germanyhttp://www.encyclopedia.com/doc/1E1-Germany.html. Accessed 03/05/2007.

Conroy, E., April 26 2007, Hopes high for employer to replace Reebok, The Boston Globe

Deresky, H., 2006, International Management: Managing Across Borders and Cultures, Pearson Education, Inc. New Jersey.

Encyclopaedia Britannica Online (2007) Germanyhttp://www.britannica.com/eb/article-233600/Germany. Accessed 03/05/2007.

Howard T., Barry, K., August 4 2005, How Adidas and Reebok stack up against rival Nike, USA Today

Hunger, J. D., Wheelen, T. L. 2004, Strategic management and business policy, 9th edition, Prentice Hall, New Jersey.

Jacobs, L. and Herbig, P. 1998, Japanese product development strategies, Journal of Business and Industrial Marketing, vol. 13, no. 2, pp. 132-154.

Kate Norton, Stanley Holmes - Adidas: Stumbling over Reebok?

Kiley, D., August 4, 2005, Business Week Daily, McGraw-Hill, Reebok and Adidas: A Good Fit

Kletter, M., Conti, S., Adidas Maps Strategy for Reebok, WWD: Women's Wear Daily, 4/12/2006, Vol. 191 Issue 77, p9-9, 3/4p, 2c, 2bw; (AN 20602673)

Landler, M., August 4 2005, The New York Times, Two Brands Running as a Team to Overtake Nike

Melcrum Publishing (2006), ‘ The planning and logistics of strategy communication’.

24

Moore, M (2007) ‘German Jobless Rate Falls in April’ Houston Chronicle. Olsson, J., 1996, Reebok of America Inc. Case Study, http://www.geocities.com/TimesSquare/1848/reebok.html

New Zealand Herald, The; (2007) ‘US Economy Vulnerable’ http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10436936. Accessed 03/05/2007.

Problems adidas facing- Adidas Optimistic About '06 Despite Reebok Obstacles. From database

Reebok Press Release, 2007, adidas Group Announces Consolidation of adidas and Reebok brands’ US Apparel and Footwear Distribution Centers into New US Location by Fall 2009, http://www.reebok.com/useng/ir/press/2007/Distribution+Centers.htm

Reebok Press Release, October 3, 2005, Adidas-Salomon to Combine with Reebok and Create 9 Billion Footprint in Global Athletic Footwear, Apparel and Hardware Markets, http://www.reebok.com/useng/ir/press/2005/adidas.htm

Rovenpor, J.L., 1996, ‘Multinational Corporations and the Impact of Public Advocacy on Corporate Strategy: Nestle and the Infant Formula Controversy’, International Journal of Organisational Analysis, vol. 4, no.4, pg413

World Factbook, The; (2007) ‘Field Listing – Population’ https://www.cia.gov/cia/publications/factbook/fields/2119.html. Accessed 03/05/2007.

Yahoo! Finance (2007) ‘Currency Converter’ http://finance.yahoo.com/currency/convert?amt=1&from=USD&to=EUR&submit=Convert. Accessed 03/05/2007.