Adidas-Reebok Merger Case Solution
Challenges Involved in Merger
Culture Differences: The cultures of Adidas and Reebok are very distinct. One is a firm based in the United States, while the other is based in Germany. Adidas, located in Germany, was more process-oriented, and Reebok, based in the United States, was more entrepreneurial.
Fears of Employees: Employees of the acquired business are typically concerned about layoffs throughout the merging process. Other concerns include relocation, professional advancement, and so forth.
Perceptionof Consumer:Many of Adidas and Reebok products were overlayingeach other. The difficulty was to figure out how to cope with it. Two multinational corporations cannot transform their image in the eyes of their customers overnight. A decision here will have far-reaching consequences for both firms for the rest of their lives. They should place their items in such a way that they do not compete with one another.
Structural Complexity: Adidas and Reebok are worldwide corporations with extremely complicated supply systems. The integration of two such sophisticated organizations into one is extremely difficult.(Is the Adidas Reebok merger working?, 2008)
Actions Done By Adidas
- Clean Team was created to handle the acquisition process:
Before the acquisition was finalized, a clean team did the preliminary work, allowing the merged organization to get up and running quickly after the deal was approved. After the acquisition was completed, the CEO quickly appointed first-line managers to alleviate uncertainty and set clear yet challenging synergy objectives for each business function and unit inside the new company, which were backed up by specific value-creation projects. It's worth noting that as soon as the acquisition was done, certain Adidas executives were placed in important positions at Reebok to conduct a thorough examination of the company's senior management.(Chaturvedi & Mikkilineni, 2005)
- Communication Strategy to alleviate Employee apprehensions:
- Herbert Hainer paid a visit to Reebok's headquarters and met with the whole staff. Additionally, a dedicated intranet site was developed to keep staff updated during the purchase process.
- Both CEOs' videoconference files were accessible for download. Reebok workers felt a great feeling of belonging because to Adidas' efforts. As a result, Reebok employees may already feel more a part of the Adidas family.
- Adidas also informed Reebok workers that the acquisition's goal is not to reduce positions in the company's structure, and that in future Heiner will continue to invest in Reebok's headquarters leadership.
- Mechanism used in Integration:
- 8 "merger teams" were created, each with an equal number of Adidas and Reebok management. Each company's geographical and functional hierarchies were represented in the teams.
- Cost and revenue synergies for each area have been found in the teams. Procedures, organizational structures, and potential development have also been examined in order to provide "outlines" to new shared, comprehensive organizational hierarchy of the team.
- Drive Uniform Culture Strategy:
- Throughout the company, Adidas made it clear that "diversity is the key to success" and their vision statement is to be "the world's top sports brand."
- The new organization developed a well-designed communications strategy to create a unified culture and guarantee that everyone worked together.
- In addition to the typical fare of CEO letters to all workers, town hall events in key cities, and e-mail updates, the business conducted monthly pulse-check polls of around 150 company executives across the world to discover key problems which the employees were worried about.
- The communications approach was then tweaked to meet the problems. Internal opinion leaders were also brought in to disseminate messages throughout the business via face-to-face briefings. Results from all these strategies gave a sense of belonging to the employees.
- Company Restructured:
With the target audience in mind, Adidas and Reebok chose to remain separate brands. As a result, the new organizational structure kept some aspects of the two firms apart in order to retain their respective brands' particular qualities. While sourcing, operations, finance, and other functions were consolidated, the Adidas and Reebok brands' product development and marketing remained distinct............................
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