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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 Weaknesses...