Case Study: Rosetta Stone

1547 Words 7 Pages
History and Summary of Current Situation Realizing that a lot of countries around the world open their doors for globalization to grow their economy and languages become more important to communicate between individuals, Rosetta Stone wants to help people to learn languages quickly and effectively. According to The Nielsen Company in the textbook, they find out that “the language-learning industry produced over US 83 billion in consumer spending.” The founder, Allen Stoltzfus, used his own learning Russian experience to simulate the way people have learned their mother language in order to learn new languages. When the technology had improved in 1992, Allen along with his brother Eugene created Rosetta Stone in Harrisonburg, Virginia. Their …show more content…
Other investors will see the new potential deal to help the company to expand its own business. Besides new opportunities, other challenges can occur such as labor cost, local regulations, and other unpredicted potential issues. Risks will happen due to new development, but they can cover the intangible and tangible costs, and operating expenses with the company’s income. The analysis below will help the company have general thoughts about this idea.
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Growth through Concentric Diversification: Expanding the product by opening classroom or audio books. Doing this way, the company can target to across many people from non-smartphone users to elders. The classroom will create an interactive environment for everyone to learn quickly as well as marketing its product. In the other side, new services will come with new costs and other unpredicted problems. For instance, the company will have to pay for labor cost if it wants to hire professors for classrooms. International regulation can be one of the difficulties to deal with.
2. Pause Strategy: the company should improve the number of languages to the level five of proficiency and add on new languages. New feathers will help Rosetta Stone’s software to compete with other companies and increase the chance for customers to buy the product. However, cost of development will again become a challenge to the company.
3. Retrenchment: Reducing the amount of investment in research. The company will cut the cost of using 10.4% of its total revenue for development. The saving money can use to develop classrooms or publish books. However, its product quality may decrease as well as the company can face hard to develop new

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