When I first heard or Adidas and Reebok doing a joint venture in year 2005, my initial thought was why? I thought why? because they are both household brand names and I did not see why it would be necessary to collaborate. However, Adidas felt that they could do better together than apart. Bringing both brands together would build a driving force mechanisms to the world of sports.
Germany's Adidas Saloman agreed to buy Reebok international for 3.1 billion euros. Although, Nike is a huge brand as well, Adidas & Reebok combined are ready to give NIKE a run for their money. Investors are willing and ready to give NIKE a huge challenge, with this new collaboration with Reebok and Adidas. The key to this this collaboration is for Adidas to expand their geographic reach. Adidas will focus on one geographic area, while Reebok will focus on another. The most important geographic area for Adidas is North America, as Adidas feels it is very imperative to conquer. Adidas goal is to be number 2 in the sporting goods market worldwide, and to create footwear and apparel that addresses a wider demographic spectrum. (187)
In 2005 the companies already saw $150 million dollars in annual savings collaboratively. This kind of money was seen through the world of Hip Hop music. Adidas and Reebok began to target NBA players and Hip Hop artists with endorsements, and product identity. Hip Hop artist Missy Elliott supported Adidas tremendously, while other Hip Hop artists such as Jay z & 50 Cent supported Reebok. Although, Adidas and Reeebok had their share of celebrity support, NIKE also had their celebrity support with Michael Jordan and Tiger Woods, as NIKE is not too much into the urban world, but have fairly made great advancement with these urban personalities. Adidas has been feeling heat from other brands as well such as Puma. However, this just drives Adidas to concentrate on a higher margin of innovation, along with its collaboration with Reebok.
Articles
http://www.businessweek.com/bwdaily/dnflash/aug2005/nf2005084_8340.htm
http://sports.espn.go.com/espn/columns/story?columnist=rovell_darren&id=2123332
Posted By: Sparkle Callahan
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