BUSINESS ADMINISTRATION
STRATEGIC MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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overcome its competitive disadvantage against Nike.
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get access to the superior technology of Reebok.
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overcome its principal-agent problems.
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pursue an unrelated diversification strategy.
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Detailed explanation-1: -Adidas acquired Reebok in order to compete more effectively with Nike. This acquisition allowed the now-larger Adidas group to benefit from economies of scale and scope that were unachievable when Adidas and Reebok operated independently. The management at Torque Autos Inc. and RedWing Automobiles Inc.
Detailed explanation-2: -Acquiring complementary products was the motivation behind Adidas’s acquisition of Reebok.
Detailed explanation-3: -In 2005, Adidas acquired Reebok at an estimated value USD 3.78 Billion. In just a year, Adidas’ sales revenue shot up by 52 percent, the largest in the previous eight years. Seamless cultural blend, despite individual divergence, was a key reason for this success.
Detailed explanation-4: -Overall, was the Adidas acquisition of Reebok a success? No. Adidas has slipped from number two in the U.S. market to number three. Overcome its competitive disadvantage against Nike.
Detailed explanation-5: -"Poison pill” is a colloquial term for a defense strategy used by the directors of a public company to prevent activist investors, competitors, or other would-be acquirers from taking control of the company by buying up large amounts of its stock.