For much of its 144‐year history, Diebold Inc. did not worry much about international business. As a premier name in bank vaults and then automated teller machines (ATMs), the Ohio‐based company found that it had its hands full focusing on U.S. financial institutions. By the 1970s and 1980s, the company’s growth was driven by the rapid acceptance of ATM in the United States. The company first started to sell ATM machines in foreign markets in the 1980s. Wary of going it alone, Diebold forged a distribution agreement with the large Dutch multinational electronics company Phillips NV. Under the agreement, Diebold manufactured ATMs in the United States and exported them to foreign customers after Philips had made the sale.
In 1990, Diebold pulled out of the agreement with Philips and established a joint venture with IBM, called Interbold, for the research, development, and distribution of ATM worldwide. Diebold, which owned a 70 percent stake in the joint venture, supplied the machines, while IMB supplied the global marketing, sales, and service functions. Diebold established a joint venture rather than setting up its own international distribution system because the company felt that it lacked the resources to establish an international presence. In essence, Diebold was exporting its machines via IBM’s distribution network. Diebold’s switch from Philips to IBM as a distribution partner was driven by a belief that IBM would pursue ATM sales more aggressively.
By 1997, foreign sales had grown from the single digits to more than 20 percent of Diebold’s total revenues. While sales in the United States were slowing due to a saturated domestic market, Diebold was seeing rapid growth in demand for ATMs in a wide range of developed and developing markets. Particularly enticing were countries such as China, India, and Brazil, where an emerging middle class was starting to use the banking system in large numbers and demand for ATMs was expected to surge. It was at...
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