principles of management
Diebold
1. Before 1997, Diebold manufactured its ATM machines in the United States and sold them internationally via distribution agreements, first with Philips Electronics NV and then with IBM. Why do you think Diebold choose this mode of expanding internationally? What were advantages and disadvantages of this agreement?
Diebold didn’t have the need to expand its business across the boarders before the 1980’s since they already had a massive demand inside of the United States. They used a key international business alliance, distribution alliances when they thought it was time to export their ATM machines internationally.
Distribution alliances, such as joint ventures, allow a company to acquire new capacity and expertise, to enter related businesses or new geographic markets, to access greater resource or to share risks. In Diebold’s case, the company was first worried of entering foreign markets alone since it lacked the resources to establish an international presence. Therefore their alliance with Philips and later IBM, permitted them to use their global marketing, sales and service functions. These two alliances made it possible for Diebold to use Philips and IBM distributions systems and knowledge about international markets, and reputation. Diebold could also take the advantage of using the Brand awareness among consumers. But on the contrary, distribution alliances also has it’s disadvantages such as a clear awareness by both parties of the objective and strategy, an imbalance in levels of expertise, investment or assets, difference in cultures and management styles and sharing profits. In Diebold’s case, the biggest disadvantages were the dissatisfaction of Philips and IBM’s sales efforts, since Diebold’s ATMs were simply part of their product portfolio and therefore not their first priority. But Diebold did not have the proper control of its product in foreign markets, and they didn’t have the ability to adapt to local markets . They also had to
1. Before 1997, Diebold manufactured its ATM machines in the United States and sold them internationally via distribution agreements, first with Philips Electronics NV and then with IBM. Why do you think Diebold choose this mode of expanding internationally? What were advantages and disadvantages of this agreement?
Diebold didn’t have the need to expand its business across the boarders before the 1980’s since they already had a massive demand inside of the United States. They used a key international business alliance, distribution alliances when they thought it was time to export their ATM machines internationally.
Distribution alliances, such as joint ventures, allow a company to acquire new capacity and expertise, to enter related businesses or new geographic markets, to access greater resource or to share risks. In Diebold’s case, the company was first worried of entering foreign markets alone since it lacked the resources to establish an international presence. Therefore their alliance with Philips and later IBM, permitted them to use their global marketing, sales and service functions. These two alliances made it possible for Diebold to use Philips and IBM distributions systems and knowledge about international markets, and reputation. Diebold could also take the advantage of using the Brand awareness among consumers. But on the contrary, distribution alliances also has it’s disadvantages such as a clear awareness by both parties of the objective and strategy, an imbalance in levels of expertise, investment or assets, difference in cultures and management styles and sharing profits. In Diebold’s case, the biggest disadvantages were the dissatisfaction of Philips and IBM’s sales efforts, since Diebold’s ATMs were simply part of their product portfolio and therefore not their first priority. But Diebold did not have the proper control of its product in foreign markets, and they didn’t have the ability to adapt to local markets . They also had to