Diebold For most of its 142-year history, Diebold, Inc., never worried much about global strategy. As a premier name in

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Diebold
For most of its
142-year history, Diebold, Inc., never worried much about global
strategy. As a premier name in bank vaults and then automated
teller machines (ATMs) and security systems the North Canton
(Ohio)-based company focused on US financial institutions, content
to let partners hawk what they could abroad. But in 1998, with the
US ATM market saturated, Diebold decided it had to be more
ambitious. Since then, Diebold has taken off. Sales of security
devices, software, and services surged 38 percent last year, to
$1.74 billion, led by a 146 percent jump in overseas sales, to $729
million. The momentum has continued this year. With ATM factories
in Asia, Latin America, and Europe, international sales have gone
from 22 percent of the total to 40 percent in just two years and
will soon overtake North America.
The ventures overseas
have taken Diebold to whole new directions. In China where it now
has half of the fast-growing ATM market, it is also helping the
giant International Commercial Bank of China design its
self-service branches and data network. In Brazil, Diebold owns and
manages a network of 5000 ATMs, as well as surveillance cameras,
for a state-owned bank. In Colombia, it’s handling bill collection
for a power utility. In Taiwan, where most consumers still prefer
to pay bills in cash, Diebold
is about to introduce
ATMs that both accept and count stacks of up to 100 currency notes
and weed out counterfeits. And in South Africa, its ATMs for the
techno-illiterate scan fingerprints for identification. Diebold
didn’t plunge willy-nilly into overseas markets. “We tend to put a
high emphasis on analysing the daylights out of things before we go
in,” says Michael J. Hillock, Diebold’s international operations
president. In the 1980s, wary of doing it alone, it used foreign
electronics giant Philips to distribute its ATMs, before forging a
manufacturing and sales joint venture with IBM. By 1998, though, it
needed faster overseas growth to lift its bottom line. And Diebold
figured it knew enough to assert more control over foreign
operations. So, Diebold bought IBM’s stake, snapped up the ATM
units of France’s Groupe Bull and Holland’s Getronics, gained
majority ownership of its China ATM manufacturing venture, and
bought Brazilian partner Procomp Amazonia Industria Electronica, a
top Latin American electronics company.
Diebold found it could
serve much broader needs in emerging markets than in the United
States. Across Latin America, consumers use banks to pay everything
from utility bills to taxes. So, Diebold ATMs handle these
services, 24 hours a day. In Argentina, where filing taxes is a
nightmare, citizens can now fill out returns on a PC, store them on
disk, and have their disks scanned on one of 5000 special Diebold
terminals, most of them at banks. Red Link, which owns the biggest
network for the tax service, gave Diebold the job because “they are
extremely flexible and can adapt technology to solve any problem,”
says Commercial Manager Armando Avagnina. Diebold is also landing
new contracts across Latin America to manage bank ATM networks. The
$240 million acquisition of Brazil’s Procom also gave Diebold an
entree into an entirely new line: It landed a huge contract to
supply electronic voting machines for Brazil’s presidential
election last year. Now Diebold is getting into the voting machine
business in the United States. Globalization, it seems, can even
unveil new opportunities in the home country.
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