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With Adidas and Reebok Combined,

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With Adidas and Reebok Combined,
With adidas and Reebok Combined,
Will Nike Still Crush the Competition?

September 21, 2005

Letter of Transmittal

September 21, 2005

"Will adidas ' forthcoming takeover of Reebok help the new company achieve sustainable competitive advantage over industry leader Nike?" After researching the many aspects of this question, we were able to come to a conclusion. In order to address the full scope of the question our team evaluated the following areas:

• Background Information
• Corporate Culture
• Market Shares and Manufacturing
• SWOT Analyses

The combination of adidas and Reebok appears to be a step in the right direction. However, it is important to analyze the strategies behind the acquisition and to consider possible obstacles the company will face. Overall, each issue will need to be addressed so that adidas and Reebok can compete to the best of their advantage against Nike, but we don 't foresee them taking Nike 's spot as the industry 's leader.

Executive Summary

The purpose of this report is to evaluate the impact of adidas ' pending acquisition of Reebok on the sporting goods industry in relationship to Nike 's position. Evaluation of background information and corporate culture combined with SWOT analyses have helped form the arguments presented in this report and have assisted in answering the question, "Will adidas ' forthcoming takeover of Reebok help the new company achieve sustainable competitive advantage over industry leader Nike?" Nike 's current position in the industry along with the strengths, weaknesses, opportunities, and threats concerning adidas ' acquisition of Reebok help convey the following arguments.

Arguments
• Nike 's Current Position o Strong brand recognition o Top endorsers o Global leader in athletic shoe market

• adidas-Reebok Strengths o Complementary global strengths o Complementary brand identities and market segments o Shared R&D, patents, and technology

• adidas-Reebok


References: Abelson, Jenn. 2005. CEOs say merger will strengthen their brands. [online]. Ohiolink Batabases. [cited 10 September 2005]. Available from World Wide Web: (http://etextb.ohiolink.edu/bin/gate.exe?f=doc&state=c7759p.2.1) Adidas-Salomon Cordes, Renee. 2005. Nike bid for Puma in doubt. [online]. TheDeal.com. [cited 18 September 2005]. Available from World Wide Web: (http://www.thedeal.com/NASApp/cs/CS?pagename=TheDeal/StArticle&bn=NULL&c=TDDArticle&cid=1125016658268) Driscoll, Marie. 2005. "Standard & Poor 's". Stock Report. Investment Rationale/Risk. EBSCOhost. 2005. adidas-Salomon SWOT Analysis: Threats [online]. Business Source Premier [cited 10 September 2005]. Available from World Wide Web: (http://search.epnet.com/login.aspx?direct=true&db=buh&an=16895217) EBSCOhost Forrey, Crystle. 2004. Situation Analysis: New Balance. [online]. New Balance. [cited 12 September 2005]. Available from World Wide Web: (http://www.personal.psu.edu/users/a/r/arq102/newbal.htm) The Economic Times Kiley, David. 2005. Reebok and Adidas: A Good Fit [online]. BusinessWeek Online [cited 7 September 2005]. Available from World Wide Web: (http://www.businessweek.com/print/bwdaily/dnflash/aug2005/nf2005084_8430.htm) King, Jennifer Koch, Christopher. 2004. How (and Why) Nike Recovered from Its Supply Chain Disaster. [online]. CIO. [cited 12 September 2005]. Available from World Wide Web: (http://www.cio.com/archive/061504/nike.html) Knight, Philip H New Balance. 2005. Our History. [online]. About Us. [cited 18 September 2005]. Available from World Wide Web: (http://www.newbalance.com/aboutus/misc/history.html) New Balance NikeBiz. 2005. Company Overview. [online]. About Nike. [cited 11 September 2005]. Available from World Wide Web: (http://www.nike.com/nikebiz/nikebiz.jhtml?page=3&item=facts) NikeBiz. 2005. NikeBiz.Com the inside story [online]. Corporate Governance.[cited 14 September 2005]. Available from World Wide Web: (http://www.nike.com/nikebiz/investors/corporate_governance/executives/print.jhtml?ex=hatfield) NikeBiz. 2005. Mission. [online]. The Nike Mission. [cited 8 September 2005]. Available from World Wide Web: (http://www.nike.com/nikebiz/nikebiz.jhtml?page=4) October 2004. New Balance Athletic Shoe SWOT Analysis [online]. Business Source Premier [cited 10 September 2005]. Available from World Wide Web: (http://search.epnet.com/login.aspx?direct=true&db=buh&an=16895953) Osborn, Andrew Puma. 2005. Consolidated Income Statement (Nature of Expense Method) [online]. [cited 17 Septmber 2005]. Available from World Wide Web: (http://about.puma.com/downloads/ck2mpkrxrn63ftch.pdf) Puma. 2005. Company History [online]. Company. [cited 19 September 2005]. Available from World Wide Web: (http://about.puma.com/puma.jsp?type=company&parent=13&id=13&lang=eng&year=2000&detyear=2000&).) Reebok. 2005. Reebok Human Rights [online]. [cited 16 September 2005]. Available from World Wide Web: (http://www.reebok.com/Static/global/initiatives/rights/home.html) Sneakerhead. 2005. Identifying and Avoiding Fake Sneakers and Fraudulent Web sites. [online]. Sneakerhead Self Defense. [cited 18 Sepetember 2005]. Available from World Wide Web: (http://www.sneakerhead.com/avoid-fake-sneakers.html) Sporting Goods Intelligence, Inc. 2005. 2004 Worldwide Sales in Branded Athletic Footwear Sales [online]. Sporting Goods Intelligence. [cited 10 September 2005]. Available from the World Wide Web: (http://www.sginews.com/sginews/mfus.html) Teather, David (http://www.nosweat.org.uk/article.php?sid=1258)
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