Reebok is one of the most famous footwear manufacturers across the globe, meaning that the business is successful in its international activities. That is why it is necessary to identify a specific entry mode that the organization used to expand internationally. Reebok emerged in 1895 in England, but it only obtained its current name in 1958. According to Shires (2017), the company extended internationally in 1979 when an American businessman, Paul Fireman, got a license to produce and distribute footwear in the United States. Anderson and Gatignon (1986) admit that this entry mode is beneficial for a company because it can minimize resource commitment and mitigate possible risks. Furthermore, it contributes to the fast entry of the business in the new market. Simultaneously, one should admit that licensing is a low-control mode, denoting that the company has a limited impact on its licensee. Finally, the presence of the license supposed that the company would obtain lower returns because the licensee would obtain a part of the benefits. In 2005, Adidas acquired Reebok, which contributed to its further development.
At this point, it is reasonable to consider whether the restrictions identified by the discussion post’s author influenced the choice of this entry mode. According to the given piece of writing, there are no specific limits or quotas of footwear. It happens because these products do not have specific technical products that would require some restrictions. That is why the footwear producers are free to choose any entry mode that is the most suitable for them. As a result, it is not a surprise that Reebok agreed to expand internationally with the help of licensing. Since it started losing its market position, it is not a surprise that Adidas acquired it. Now, the two firms are the main competitors of Nike.
References
Anderson, A., & Gatignon, H. (1986). Modes of foreign entry: A transaction cost analysis and propositions. Journal of International Business Studies, 17(3), 1-26.
Shires, R. (2017). The history of Reebok footwear. Mainline Menswear. Web.