International business

Topics: Diebold, Automated teller machine, Electronic voting Pages: 2 (704 words) Published: October 29, 2014
Diebold
For much of its 144 year history, Diebold Inc. did
not worry much about international business. As a
premier name is bank vaults and then automated
teller machines (ATMs), the Ohio based company
found that had its hand full focusing on U.S.
financial institutions. The company first started to
sell ATM machines in foreign markets in the
1980s.Wary of going it alone, Diebold forged a
distribution
arrangement
with
the
Dutch
multinational
electronics
company
Phillips
N.V.Under the agreement, Diebold manufactured
ATMs in the United States and exported them to
foreign customers after Phillips had made the sale.

The company also realized that in addition to local
distribution, it would need a local differences in the
way ATMs are used, requiring customization of the
product. In parts of Asia, for example, many
customers pay their utility bills with cash via ATMs.
To gain market share, Diebold had to design ATMs
that both accept and count stacks of up to 100
currency notes, and weed out counterfeits. In other
countries ATMs perform multiple functions from
filling tax returns to distributing theatre tickets.
Diebold believed that locating manufacturing close
to key markets would help facilitate local
customization.

In 1990,Diebold pulled out of the agreement with
Phillips and established a joint venture with
IBM,Interbold,for the research, development and
distribution
of
ATM
machines
worldwide.Diebold,which owned a 70% stake in the
joint venture, supplied the machines, while IBM
supplied the global marketing,sales,and service
functions.Diebold established a joint venture rather
than establishing its own international distribution
system because the company thought it lacked the
resources to establish an international presence. In
essence, Diebold was exporting its machines via
IBM’s distribution network.

To jump start its international expansion, Diebold
went on a foreign acquisition binge. In 1999 it...
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