Adidas-Salomon Executive SummarySince its inception in 1949, adidas has been a leader in innovation; which is also their main competitive advantage in the market. Along with innovation, the company differentiates itself in the market through its strong brand equity, supported by a strong global marketing and advertising program. With the acquisition of Salomon in 1998, the company became adidas-Salomon and the number 2 sporting goods company in the world. Although there were good strategic fits between the core competencies of adidas and Salomon, it is obvious that the divisions failed to discover these synergies. Salomon's future performance remained below expectations and failed to deliver the long-awaited growth. Even more, it dragged down the overall growth rates of adidas-Salomon. To recover the lost ground, adidas-Salomon must return to its core business, namely footwear and apparel, and exploit the opportunities in this division; i.e. the historical and sports style footwear and clothing lines which are expected to grow by 40%. The company also needs to increase its market share in North America in order to substantially increase its growth rates and profitability. The debt used for the Salomon acquisition was a major problem for the company's finances. Although financially strong and unlikely to be insolvent, the company must seek to reduce its debt to increase its profitability.1 Adidas-Salomon Strategy OverviewSince its inception in 1949, adidas has been a leader in innovation; which is also their main competitive advantage in the market. Along with innovation, the company differentiates itself in the market through its strong brand equity, supported by a strong global marketing and advertising program. At first glance, the acquisition of Salomon (and indirectly, Taylor-Made, Cliché, Mavic, Arc 'Teryx, Bonfire and Nordic) seems to be a good fit for adidas. Both companies operate in the sporting goods sector and have well-known brands. Both have strong clothing lines and are present in similar geographic regions. However, it is also obvious that the durable goods categories of Salomon (skis, bindings, boots and the like), Taylor-Made (irons, woods and the like) and all Mavic products are unlikely to create synergies with the apparel and footwear industries of adidas. The company will achieve savings on administration and management costs at all levels by consolidating the management of the companies. The combined purchasing power of all business units will also provide better bargaining power overall.2 Strategic fit of adidas-Salomon businesses