THE SUMMARY OF CASE STUDY

“DIEBOLD”
BY GROUP 6

Diebold Inc, a premier name in bank vaults and then Automated Teller Machines (ATMs), based
at Ohio, US. For much of its 144-year history, Diebold Inc did not worry much about
international business. However, the company went to foreign markets in the 1980s and then
decided to distribute their ATMs to electronics company Philips NV until 1990. After that,
Diebold collaborated with IBM to research, develop, and distribute ATMS worldwide because
they believed that IBM would pursue ATM sales more aggressively. Due to the lack of the
resources to establish an international presence, Diebold was responsible for supplying the
machines while IBM was in charge of providing the global marketing, sales, and service
functions.

By 1997, foreign sales had grown noticeably from the single digits to more than 20 percent of
Diebold’s total revenues because of the rapid growth in demand for ATMs in numerous
countries. While the US market was in a saturated phase, demand for ATMs was expected to
surge in several countries such as China, India, and Brazil due to the large numbers of people
using the banking system of the middle class. It was at this point that Diebold decided to take the
plunge and establish its own foreign distribution network. As a first step, Diebold purchased
IBM’s 30 percent stake in the Interbold joint venture. This was because of two main reasons: the
lack of sales efforts and the insufficiency of focusing on Diebold’ ATMs of IBM’s salespeople.
Also, Diebold felt that fifteen years of accumulating international business expertise was enough
for going it alone, which can help the company attain a greater market share.

The managers at Diebold recognized the need for local manufacturing in various regions due to
differences in how ATMs are used, which required customised products. In order to gain market
share, Diebold had to develop ATMs that could accept and count stacks of up to 100 currency
notes, as well as identify counterfeit bills and perform multiple functions from filing tax returns
to distributing theatre tickets. Diebold believed that having manufacturing facilities near
important markets would enable them to customise their products and boost sales.

To jump-start its international expansion, Diebold went on a foreign acquisition binge. In 1999,
it acquired Brazil’s Procomp Amazonia Electronica and the ATM units of the two major players
in Europe namely France’s Groupe Bull and Holland’s Getronics. In China, Diebold established
a manufacturing and distribution joint venture in which it took a majority ownership position. By
2022, therefore, Diebold successfully had a manufacturing presence in Asia, Europe, and Latin
America, as well as the United States, and distribution operations in some eighty countries.
Diebold's acquisition of Pro Comp, a Brazilian electronics company, brought them into the
electronic voting machine business. Procomp, with its success in outfitting Brazilian polling
stations, led Diebold to realise the potential of this global market. Diebold expanded its presence
in the electronic voting sector through the acquisition of Global Election Systems in 2001,
becoming the global leader in electronic voting machines with sales exceeding $100 million by
2003.