Write a Paper Analysis on Compensation Decision Making

From Wall Street Journal:Wellness Programs Hurt by Rules, CEOS Say
,create a 1-page analysis including the following sections:

  1. Author – List who wrote the article
  2. Title – List the title of the article
  3. Source – List the name of the article’s source as well as the date of the publication (e.g. New York Times, Aug. 3, 2005)
  4. Summary – This is a brief summary (1 paragraph) of the article
  5. Key Points – List at least 3 points that reflect how this article relates to the topic for the week.
  6. Reaction – This is a 1-2 paragraph analysis of what you learned from reading the article.
  7. Must be in APA format


Author: Mark
Landler of the New York Times

Title: Adidas to
Buy Reebok for 3.8 Billion, Challenging Nike

Source: The New York Times, August 3, 2005.

Summary: This
article is about the rivalry between the three major shoe companies. Adidas’s
chief executive Hubert Hainer and Reebok’s chairman Paul B. Fireman struck a
deal to merge their companies to compete with Nike’s dominance in the
athletic-shoe market. The merger between Adidas and Reebok caused both of their
stocks to rise dramatically, which confused many financial analysts. These
analysts claim that even though Adidas and Reebok will catch up to Nike in the
athletic-shoe market, the sales generated because of the merger will be meek.
Mr. Hainer sees the merger more as two companies complementing each other, not
for the sole purpose of money but for growth.

Key Points:

  1. The
    deal for Adidas to buy Reebok was worth $3.8 billion. For the first time
    in over a decade, Nike will now have real competition in the athletic-shoe
    market. Before the deal, media analysts compared Nike to its competitors
    as “Snow White and the three dwarves.” Mr. Hainer and Mr. Fireman both
    hope those kinds of comparison are over.
  2. Mr.
    Fireman will personally earn $650 million from the merger. He will remain
    the chairman of Reebok and own 17% of the newly formed companyarrow-10x10.png. Although
    the companies did merge, they will both still run as separate businesses.
    They will both keep their names and both stay in their current locations.
    Both companies stock soared aftr the deal was announced. Reeboks went up
    29.5%, and Adidas went up 6.9%, confusing many financial analysts.
  3. Mr.
    Hainer hopes that the merger between Adidas and Reebok will have a
    dramatic effect on the global athletic-shoe market. Adidas, which hopes
    its sales in China by the year 2010 will exceed $1.2 billion, is counting
    on Reebok’s most popular Chinese’s basketball player, Yoa Ming, to
    generated millions in revenue. Adidas and Reebok both have their eye on
    the United States shoe market as well, which accounts for 50% of the
    global market.
  4. Adidas
    and Reebok believe that their marketing strategiesarrow-10x10.png will be vital for the
    success of their merger. They believe that icons such as Jay-Z, Allen
    Iverson, and 50 Cent, will help them compete with Nike’s present day
    dominance of the athletic-shoe market. Marketing makes or breaks shoe
    companies nowadays.

Reaction: I felt
this article was very insightful and educationalarrow-10x10.png as a person who wants to be a
manager of a company. I enjoyed how two competitors in the business world
joined forces to compete with the leader in their particular market. Both
managers of Adidas and Reebok saw that the only way to compete with Nike was to
merge and become one. I believe to make the merger successful, Mr. Fireman and
Mr. Hainer had to do careful planning before and after the merger finally went
into effect. Without careful planning and decision making, the merger would
have never taken place or been as successful. I also liked how Adidas
recognized that there was a profit to be made in the global athletic-shoe market.
They recognized the profitability of selling their product in China and have
taken the necessary steps to sell their 
product in that countries market.

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