principles of management

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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
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Diebold headquarters believed that adapting themselves to local markets would be the key to increase products appeal and with that increase sales. For example, in part of Asia, many customers pay their utility bills with cash via ATMs. Then, to gain market shares, Diebold had to adapt its machines in the way that they can both accept and count stacks of up to 100 currency notes, and weed out counterfeits. However, we can also see that Diebold can use sometimes a global standardization strategy. With the acquisition of the Brazilian company Procomp, they found a potential large business area to deal with the electronic voting machine business. It had a huge success in Brazil, and as a consequence, Diebold saw an opportunity to globalize the electronic voting machine business to new areas and new markets. This strategy highly affected Diebold’s choice of entry mode. Since they believed it was important to adapt its products to the local market, the fact that they operated a foreign acquisition binge and had mostly wholly owned subsidiaries where truly important. In those cases, Diebold could maintain operational control over its acquisitions, but it could also take advantage of foreign management and technical expertise, better integrate its ATMs machines developments and operate quick execution of strategic priorities
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