Case 18.

Adidas in
2008: Has Corporate
Restructuring Increased
Shareholder Value
Compan
y
Overvie
w

Image : courtesy from

meetthebosstv.com
1920 – Adi Dassler
makes his first shoe Timeline
in his workshop
1993 – Robert Louis-
1936 – Jesse Dreyfus becomes
President of ADIDAS 2006 – adidas-
Owens won 4 gold
AG Saloman AG acquires
medal in Berlin 1997 – ADIDAS Reebok International
games announces the Ltd. With a new
1949– Adi Dassler
acquisition of the name Adidas AG
registers the ADIDAS
Salomon Group
brands andthe three 2008 – Adidas
(Saloman,
stripe trademark. business focus on 3
TaylorMade,
1954 – German team 2001
Mavic –and
Dreyfus step
Bonfire) core brands – Adidas,
wins the world cup for down and replaced by Reebok and
the first time. (boots Herbert Hainer as the TaylorMade-adidas golf
with screw in studs) CEO of ADIDAS –
1978 – Adi Dassler Saloman AG
dies at the age of 78.
2005 – ADIDAS-
His son Horst
Saloman AG enters into
Dassler carries on
a sale and purchase
the
1987Adidas heritage
– Horst Dassler agreement to sell its
unexpected death. Saloman business
Nike become segment
undisputed leader in
BCG
MATRIX Relative Market Share

Low (Cash Generation) High

High

Reebok
(Cash Usage)
Market Growth
Rate

Adidas Solomon
Taylor
Made
Low
FINANCIAL ANALYSIS
 ADIDAS’S CORPORATE STRATEGY

Focusing on three core brands:

i. Adidas
ii. Reebok
iii. TaylorMade-adidas Golf

Company’s Corporate Strategy:

i. Focus on product design and innovation contributed to
the differentiation strategies. (Product Innovation)
-TaylorMade Golf (r7 CGB Max Limited driver), Adidas
( Super Nova and Response), Reebok's (Trinity KFS III
and Rbk Edge)
Cont….

ii. Creating differentiated image for the products offered

(Promotion Strategy)

iii. Expanding controlled retail space (Location/Distribution

Strategy)

iv. Achieving efficiencies in global supply chain processes

and activities. (Production Strategy)
HAS CORPORATE RESTRUCTURING
INCREASED SHAREHOLDER
VALUE?
 YES
The potential benefits of the merger(Adidas and Reebok)
were:
 greater sales growth
 improvement of financial performance
 stronger and wider distribution networks
 attainment of “critical mass” in the USA for Adidas
 increased bargaining power with suppliers and retailers
 acceleration of product innovation.
Cont….

Decision that Adidas makes is worth because :

 Increasing retail sales as a percentage of total sales
 Reebok contribute 80% of brand revenue in 2008
 Integrated and repositioned Reebok help increase
profitability
 Benefit from synergy which simply refer to financial
benefits.