Question

ROSETTA STONE INC.: CHANGING THE WAY PEOPLE LEARN LANGUAGES

Rosetta Stone Inc. is a leading provider of technology-based language learning solutions. Acclaimed for the speed, power and effectiveness of its Dynamic Immersion® method, Rosetta Stone has revolutionized language learning.

Rosetta Stone Inc. is changing the way the world learns languages. Rosetta Stone provides interactive solutions that are acclaimed for the lower speed and power to unlock the natural language-learning ability in everyone. Available in more than 30 languages, Rosetta Stone language learning solutions are used by schools, organizations, and millions of individuals in over 150 countries throughout the world.

            Rosetta Stone’s mission was to change the way people learn languages. The company blended language learning with technology at a time when globalization connected more and more individuals and institutions to each other.

The potential for profit in the language learning industry encouraged management to become more proactive and aggressive about Rosetta Stone’s growth. In 2007, an industry analysis commissioned from The Nielsen Company, a market research firm, found that the language learning industry produced over $83 billion in consumer spending. Of this amount, $32 billion, or 39 percent of the total, was spent on self-study options. In the United States, the industry generated $5 billion in consumer spending in 2007, of which $2 billion was for self-study. Over 90 percent of the $83 billion was spent outside the United States.

The company’s debut on the New York Stock Exchange brought capital and resources that placed Rosetta Stone in an exciting and promising position. Tom Adams, President and Chief Executive Officer, said “We are excited about hardware trends and the potential of educational technology in general. We are working in new ways with online socialization. We see our primary opportunity as growing through our own innovation… With added financial resources we can entertain mergers and acquisitions down the line.” To effectively compete, Rosetta Stone will have to push product and service development as well as attract and retain talented personnel.

Case Study Questions (25 marks each):

1. How should the company move forward in order to sustain its momentum? Discuss.

2. How can Rosetta Stone grow internationally? Elaborate.

3. Under which strategic type, can Rosetta Stone Inc. fall? Elaborate.

4. Choose any two variables from the societal environment and discuss whether they can be considered as opportunities or threats for Rosetta Stone Inc.

Answer 1

1)How should the company move forward in order to sustain its momentum? Discuss.

ANS:- The Company has to focus on three pillars of Sustainability : social, economical, and environmental. If the Company has to grow in a particular region it has to involve itself in the societal norms and practices of the region.

a) Social:- The company Rosetta has to understand the social norms and practice and adopt to it for further growth. For example, the company has to look after the literacy rate of that region for its social involvement.

b) Economical:- The company Rosetta has to get in touch with the local people for employment where it likes to operate, that way it indirectly helps in the economics of that particular region. For example, if Rosetta is based in US and wants to operate in India, then it has to hire people from local population to operate in India et, al.

c) Environment:- It has to be economically conscious in helping minimizing the adverse effects on the environment due to business related activities. For example, you have encourage the local population in E-learning in order to avoid traffic and adverse climate.    

2) How can Rosetta Stone grow internationally? Elaborate.

To grow internationally it has to partner with local businesses similar to Joint Venture with a local company of the same industry. Eg.:- Honda company partnered with Hero company in India in order to run its business in India.

3) Under which strategic type, can Rosetta Stone Inc. fall? Elaborate.

Rosetta falls under the category of the question mark where in which market share it less and high growth potential. So in that case it has to follow below strategy.

Product Differentiation and market positioning. It has to place itself a unique product solution to cater the need of the market. Unless consumer can spot the product from me-too competitors, you will have a difficult time making sales.

Quality :- Since the Rosetta is new in the market, it has to ensure quality service to bring confidence among the potential consumers for consistent growth.

Technology:- In our technology centric world, technological advantage can often translate into improved productivity, better sales, or even market denomination. It is not uncommon for organizations to even buy up smaller firms just to gain acces to their technology. Eg.:- Facebook buying Instagram.  

4) Choose any two variables from the societal environment and discuss whether they can be considered as opportunities or threats for Rosetta Stone Inc.

Two main variable should consider is

a) Homogenous or Heterogeneous the society :- For company like Rosetta heterogeneous society is a boon to it growth as it provides Multiple opportunity to grow in different dimensions. Eg:- India has a multicultural, multilingustic, multireligeous, multiracial in its structure which enables a potential demand in learning new languages and its related aspects. on the contrary a country like south korea which is mainly a homogenous in terms of above mentioned dimensions of society may not help in the growth of companies like Rosetta.

b) Younger or older the poplulation:- The need for the learning is prominent for younger population than the aging ones. Hence, Rosetta acts as stimulus for continence where younger population is more.