International business
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
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