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The restructuring of Adidas was primarily aimed at eroding the market share of Nike. This plan involved the acquisition of companies whose products could be aligned with those sporting goods that were offered by Adidas.
However, this approach did not achieve the synergy among businesses because Adidas could not raise its effectiveness or improve the quality of products.
To a great extent, this plan failed to differentiate the products of Adidas. One may examine the differences in performance between various business units of Adidas in order to elaborate this response.
Overall, the management of Adidas was extremely concerned about the growing market share of Nike that clearly became the leader of the sporting goods industry. In response, Adidas attempted to diversify its products and acquired such companies as Solomon and Reebok.
However, the new divisions did not consistently display good financial results. For instance, many consumers were disappointed with Reebok’s failure to improve quality and styling of its products. As a result, its revenues declined during the period between 2007 and 2008.
The main problem is that these acquisitions did not add much value Adidas. More likely, they made the company more vulnerable, especially at the time of the global economic recession.
In this case, much attention should be paid to the process of differentiation. The management of Adidas had to show that their company could offer products which were superior to those ones of Nike in terms of quality or price.
However, they did not pay much attention to this issue. This is why Adidas failed to become more competitive than Nike and their restructuring plan did not make the company more efficient.
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