If the student answers the questions very similarly to the given answer below, give him/her full

credit. Give partial credit as you see fit if the student comes somewhat close.

QUESTION 1: Prior to 1997, Diebold manufactured its ATM machines in the United States, and
sold them internationally via distribution agreements, first with Philips NV and then with IBM.
Why do you think Diebold choose this mode of expanding internationally? (2 points) What were
the advantages and disadvantages of this arrangement? (6 points)

ANSWER 1: Diebold was able to use first Philips and then IBMs distributions systems,
knowledge about international markets, and reputation. A foreign consumer could trust IBM
more easily than a brand of which it had never heard. These were advantages. Disadvantages
were that Diebold could not control the attention its products received from Philips and IBM.

QUESTION 2: What do you think prompted Diebold to alter its international expansion strategy
in 1997 and start setting up wholly owned subsidiaries in most markets? (3 points) Why do you
think the company favored acquisitions as an entry mode? (3 points)

ANSWER 2: Diebold faced a saturated domestic market and increasing foreign demand,
especially in developing countries like China, India and Brazil. By pursuing acquisitions,
Diebold could get a running start in these developing markets.

QUESTION 3: Diebold entered China via a joint venture, as opposed to a wholly owned
subsidiary. Why do you think they did this? (5 points)

ANSWER 3: In China, there were no possible acquisitions, and Diebold wanted access to local
knowledge. A J-V gave them this.

QUESTION 4: Is Diebold pursuing a global standardization strategy or a localization strategy?

(2 points) Do you think this choice of strategy has impacted upon its choice of entry mode? (2
points) How? (2 points)

ANSWER 4: Diebold is pursuing a localizations strategy. The use of ATMs varies considerably
by location. Yes, entry mode was influenced by localization. The need for local knowledge was
met by their acquisitions of partners.