REEBOK AND ADIDASA PRESENTATION BY IBS-

GURGAON TEAM

Presented by: Aakash Gautam Diksha Sharma Jasmine Ahuja Vimal Narwat

Richa Asthana Yogesh Kushwaha

The case study behold the story of two footwear producing giants REEBOK & ADIDAS. The merger of the two to nip Nike down to its knees.

It was a strategy articulated by Adidas of uniting two of the world's top sports companies and creating a much stronger challenge to Nike, particularly on the global giant's home turf: the prime North American market that accounts for about half of the category's sales worldwide. This case study encapsulates a detailed view on how these 3 global giants stood earlier and what was the impact of the merger on the footwear industry along with the information systems they preferred and improvised overtime to attain work efficiency.

BACKGROUND 1895 – Company founded as J.W.Foster and Sons in Bolton , England.

1985- company renamed as “REEBOK”

1979-Paul Fireman became CEO of Reebok

1991- Tom Trainer became CIO of the company.

2005-Adidas acquired Reebok as a subsidiary.

2006- Paul Harrington became president and CEO of the company.

Current CEO Matthew H.O.Toole.

Market Share of Reebok And Adidas before merger

COMPARISON: NIKE VS ADIDAS 2001: Henbert Hainer takes over

as Adidas CEO. 2002: Nike buys Hurley

(estimated $100-140M) 2003: Nike buys converse for

$309M. Signs Lebron James and Kobe Bryant.

Adidas launches Y-3 and signs David Beckham.

2004: Nike buys Starter and Phil knight steps down as CEO.

2005: Adidas signs Lionel Messi and launches Impossible is nothing campaign.

2006: Mark Parker becomes nike CEO.

2007: Adidas buys Reebok ($3.8 bn). Becomes NBA merchandiser.

2008: Nike buys Umbro. 2009: Nike launches yeezy .1

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

10

20

30

40

50

60

70

NIKE ADIDAS

2011-2016 2011: Adidas launches

ALL IN campaign. 2012: Nike Sells

Umbro ($225 M) 2013: Nike sells Cole

haan Adidas launches

energy boost running technology. 2011 2012 2013 2014 20150

102030405060708090

100

Chart Title

NIKE ADIDAS

Axis Title

Axis

Title

Why is business integration important to Reebok?

Business integration is important to any organization to achieve three main objectives:

efficiency effectiveness competitive benefits. In the case of Reebok, the company is lacking

behind in sales and revenues, and losing market to its competitors, mainly Nike. To revive the company sales and market share, business integration is important.

Old System

MANUFACTURING UNITS OF REEEBOK

HEAD OFFICE

LOCAL AGENCY

RETAIL OUTLETS

CUSTOMERS

Telephones and Fax

Telephones and Fax

Telephones and Fax

New System

HEAD OFFICE

MANUFACTURING UNITS

RETAIL OUTLESTS

CUSTOMERS

MARKETING DEPT.

OPERATIONS

MARKETING

CUSTOMER RELATION

Technology Used In The Process By Reebok

Reebok was having a hard time in improving it sales and before that it’s communications both internal and external. So to improve that they did a lot of re-engineering and transformed their information system.

Passport- Passport rationalized product codes and shoe sizes. It also gave small distributors and subsidiaries access to the system through personal computers. It also worked as a module by plugging into larger systems.

Lotus Notes- Lotus Notes, an application suite included the following components: E-mail Calendar and scheduling Address book Database Web server Programming

Hoover- A data capture system to “suck in” information from database around the world, is linked to customer database that tracked what customers have ordered and what they want.

Radnet Inc.’s web share- is a groupware system which Reebok installed to improve its website. The system included tools for e-mail, discussions groups and bulletin boards. It helped improving interactivity to the site and build a community of users.

Quick Time- The company used quick time from apple to create CDs for its salesperson.

AFS module- Reebok later developed a custom add-on system called the Apparel Footwear Solution which included:

Fast order entry to help speed up manual order entry. Credit card processing to prompt credit card details and auto dialing for

authorization. “Mark For” feature to help making direct deliveries to particular points. Rush orders if the stock needs to be shipped immediately. Value added services

Later when Adidas purchased Reebok in 2005, they adapted a new computer program Seer to scan internet blogs for comments about the company.

They also used media approaches such as You Tube and Second Life to market their products.

Market Share Of Reebok And Adidas After Technological Re-Engineering

Supply Chain Management System

TYPES OF SUPPLIERS Main suppliers. They have a direct contractual relationship with the adidas Group for the

supply of products, whether for export or domestic market consumption.

Subcontractors. These are factories that have been subcontracted by our suppliers to perform manufacturing operations the main suppliers are not capable of doing in their own facility.

Material and other service providers. These suppliers may not have a direct business relationship with the adidas Group, but supply goods and services to our main suppliers.

Licensees. Independent companies which manage the design, production and distribution of specific products, under licence to the adidas Group. In 2014, the adidas Group worked with 67 licensees whose suppliers sourced products from 448 factories in 49 countries.

Agents. Independent companies that act as intermediaries to source product manufacturing, manage the manufacturing processes, and sell finished products to the Group.

Problems Faced By Reebok And Its Solution.

PROBLEMS : Thinking globally acting globally. Company didn’t train the employees beforehand. A weak communication system and feedback.

SOLUTIONS : Reebok needs to think locally and act globally. They should

develop a system accommodating all the local variations and addressing the concerns globally. This will result in increased operational efficiency and cost reduction. This will shift company to meet the world requirement for sport shoes industry.