Berlitz International, Inc.

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Berlitz International, Inc.

293 Wall Street
Princeton, New Jersey 08540
U.S.A.
(609) 924-8500
Fax: (609) 683-9138

Public Subsidiary of Benesse Corporation
Incorporated: 1989
Employees: 3,885
Sales: $300.2 million
Stock Exchanges: New York
SICs: 8299 Schools & Educational; 7389 Business Services Not Elsewhere Classified; 2741 Miscellaneous Publishing

Berlitz International, Inc. is a languages services firm providing language instruction, cross-cultural training, translation services, and publishing products in 33 countries throughout the world. For language instruction, the company employs its proprietary Berlitz Method, which avoids tedious memorization exercises and grammar drills in favor of a conversational, usage-driven approach to virtually all living languages. Berlitz’s publishing division produces pocket-size travel guides and language phrase books, as well as bilingual dictionaries, trade paperback travel guides, and self-teaching language guides from audio cassettes to interactive compact discs. The company’s translation services provide technical translation, interpretation, software localization, electronic publishing, and other foreign-language-related services. In 1989, Berlitz Languages, Inc. and related divisions were acquired by Macmillan Co.—a leading publisher and subsidiary of the media magnate, Maxwell Communication Corp. plc (MCC) —and renamed Berlitz International, Inc. When MCC began to falter at the end of 1991, MCC sold a majority stake of Berlitz to Fukutake Publishing Co., Ltd., a leading Japanese publisher specializing in correspondence classes. Under the parentage of Fukutake, Berlitz underwent a major restructuring, designed to “ensure consistent, profitable growth for the long term ... and meet the growing, worldwide demand for language services,” according to company chairman Soichiro Fukutake in his 1993 Letter to Shareholders. Soon thereafter, Fukutake changed its name to the Benesse Corporation. Though the company’s parent shifted abruptly in the early 1990s, Berlitz stuck firmly to its own corporate identity—and language specialty—as it prepared for the 21st century.

Berlitz origins date back to 1878, when Maximilian D. Berlitz (1852-1921) founded his own language school in Providence, Rhode Island. Fluent in Greek, Latin, and six European languages, Berlitz was teaching at a small local college when he hired an assistant, Nicholas Joly, from France. According to one account, the assistant spoke virtually no English when he arrived. When Berlitz fell ill and was unable to provide classroom supervision over a period of several weeks, Mr. Joly conducted class strictly in French. When Berlitz recovered, he discovered that the students had made remarkable progress in French. Berlitz’s main tenet of language instruction—the transfer of usage by actually using nothing other than the language in question—thus gained credibility, providing the impetus for development and fine-tuning of the young school’s trademark pedagogy, the Berlitz Method.

Though Berlitz was convinced that his “direct” method of language instruction was the most effective available, it was initially regarded suspiciously by the public and the academic community. Starting with the first greeting by the instructor, the Berlitz Method dictated that only the target language was to be spoken in class. Emphasis was placed on the spoken word, with students learning to read and write only what they had already learned to say and understand. In the place of formal grammar instruction, students absorbed a grammatical system naturally, by using it. Above all, to develop fluency, students learned to think in the new language, not to translate—to associate new words with objects and ideas, rather than with the distractingly familiar words of their mother tongue. In order to encourage students in the use of the target language, instructors typically employed question-and-answer techniques to prompt dialogue while expanding vocabulary.

However unconventional, the young company, known as the Berlitz School of Languages, produced results that simply couldn’t be ignored; as the growing number of Berlitz-trained students continued to learn languages in an efficient and enjoyable manner, the school expanded. By the turn of the century, an explosive tourist industry prompted Berlitz to develop travel guides, self-teaching materials, and interpretation services to meet this growing demand. Through both world wars, the number of Berlitz schools multiplied with growing demand for language skills.

After World War II, Berlitz seized emerging opportunities in language training and translation services brought on by multinational companies expanding their business around the world. Such expansion was catapulted by the rise of computer information systems starting in the 1970s. With the advent of digitized communication networks, increasing amounts of information could be conveyed almost instantaneously between virtually any points on the globe, intensifying the need—and the market—for effective cross-cultural and cross-linguistic communication. Moreover, the 1980s saw the crumbling of key international trade barriers, as markets in the former Soviet Union, China, and various developing nations increasingly moved toward free trade. Indeed, the company’s 1993 annual report described cutbacks in Western European nations that were experiencing economic stagnation. Meanwhile, the company aggressively moved into rapidly growing markets in Central and Eastern European countries, establishing new facilities in the Czech Republic, Slovakia, Poland, and Eastern Germany. A December 5, 1993 article in The Warsaw Voice heralded the arrival of a new Berlitz school in Warsaw and plans for another in February, as well as other schools in cities like Poznan, Cracow, and Gdansk. To exploit global markets in the 1990s, Berlitz also opened new language centers in Brazil, Colombia, and Venezuela, as well as Mexico, which saw new language-training needs with the passage of NAFTA.

From the 1980s onward, Berlitz’s language instruction division increasingly developed options and additions to its classroom instruction facilities. The Berlitz Study Abroad (BSA) Program offered students a complete travel package and the opportunity to study their new language in its country of origin. The Berlitz Jr. program provided special foreign language teaching service for U.S. elementary, middle, and high school students both “on site” at schools or camps and at the Berlitz Language Centers. For slightly older students, Berlitz acquired the Language Institute for English (L.I.F.E.) in 1988, providing intensive English instruction, recreational opportunities, and accommodations to foreign students on campuses in Boston, New York, Miami, Orlando, San Diego, San Francisco, and Chicago.

Berlitz developed several products and programs to combine both language and social skills in tandem. The company also expanded on its popular Cross-Cultural Division, designed to instruct students in business and social etiquette and day-to-day activities to supplement language skills. In 1994, the company acquired Cross-Cultural Consultants of Brooklyn, New York, to ensure a stronger future in that growing market. Led by noted author and lecturer Dean Foster, the division held seminars and briefings designed to sensitize businesses to the intricate social, political, and cultural issues that can determine a company’s effectiveness in foreign markets.

In the spirit of a skilled language teacher, the company itself listened to the talk around it and continued to develop linguistic solutions to accommodate changing market trends. Joining forces with the University of Phoenix in 1991, for example, Berlitz put together a custom-designed language program for McDonnell Douglas Helicopter Co., which wanted the program to enhance its employees global competitiveness.

In 1995, Berlitz’s language instruction division responded to the lifestyle needs of contemporary language enthusiasts by introducing Club Berlitz, a network of groups that enabled members to speak the foreign language of their choice with groups of people at similar proficiency levels. Participants honed their language skills while engaging in activities ranging from international dinner parties to cultural evenings, theme events like plays and movies, and study abroad programs. “Club Berlitz reflects the growing interest in the study of language and culture for both business and personal use,” said Hiromasa Yokoi, vice-chairman, chief executive officer, and president of Berlitz International in a March 20, 1995 Business Wire article.

Berlitz’s dedication to world languages for “both business and personal use” spurred the development of two other business segments: publishing and translation. Since the early 1970s, Berlitz Publishing produced language and travel-related publications recognized internationally for their accuracy and user friendliness. By the 1990s, the division was responsible for more than 1,000 titles, ranging from a European Menu Reader to inexpensive pocket paperbacks and state-of-the-art interactive CD-ROMs.

In order to maintain its stature as a premier, single source provider of language services, Berlitz Publishing continued to develop innovative products into the 1990s. A 1991 joint venture with Sphere Inc. (doing business as Spectrum Holobyte), resulted in the co-development of a language learning game based on CD-ROM technology. The game “El Grito del Jaguar,” or “The Cry of the Jaguar,” taught users Spanish language and Mexican culture through an adventurous computer-driven challenge, setting the ground for similar projects in other languages. That same year, Berlitz’s parent company, Maxwell Communications Corp., in conjunction with the European industrial and electronics giant, N.V. Philips, announced a joint venture publishing company, Maxwell Multi Media. The new company planned to produce and sell self-teaching language courses for the home, office, and school using interactive Compact Discs (CD-I) as well as other new media formats.

Though Berlitz would leave the Maxwell empire within a year, some of the strategy from the Philips venture would contribute to later developments. In 1993, for example, Berlitz Publishing Co. signed a licensing agreement with Sierra On-Line Inc., through which Bright Star Technology, a wholly-owned Sierra subsidiary, would develop, manufacture, and market a new CD-ROM-based foreign language and culture series called “Berlitz Alive!” Using patented lip-synching technology and animated personal tutors, as well as Berlitz’s teaching methodology, Bright Star launched its first foreign-language educational series, “Japanese Alive!,” in September 1993. “Combining Sierra’s interactive multimedia technology with Berlitz’s language content, name recognition and proven learning methodology opens new markets for our educational products, expanding into adult education and foreign language,” said Alan J. Higginson, president of Bright Star Technology, in an August 4, 1993 PR Newswire article.

Riding the growing wave of digital media, Berlitz also moved onto the internet in 1995, as it assumed management of Prodigy, Inc.’s Foreign Languages bulletin board. On-line customers could gain information about a foreign land, talk in a native tongue, secure translation services, and obtain instant information on all Berlitz products and services.

Into the 1990s, the company’s translation segment, Berlitz Translation Services (BTS) maintained its reputation as a world leader in technical documentation translation and software/ multimedia localization, as well as full production capabilities in desktop publishing and graphics, audio visual services, and simultaneous and consecutive interpretation.

Founded in 1984, BTS quickly gained a top reputation for its accuracy and its ability to integrate linguistic services and versatile project management. Starting in the late 1980s, the translation segment greatly expanded its international scope through a series of acquisitions, including: the Institute for Fagspneg in Copenhagen (June 1989), Able Translations Ltd. in Baldock, England (Fall 1990), Kayer Coll. Technical Translators in Sin-delfingen, Germany (December 1990), Nordoc A/S (1991), and Softrans International Limited (1991). By the mid-1990s, the BTS International Network provided translation-related services in more than 37 locations across 16 countries.

In the late 1980s and early 1990s, Berlitz underwent several dramatic reorganizations that seemed to threaten the company’s stability but that ultimately left it in a strong position to enter the 21st century. In 1989, Berlitz’s main business divisions— Berlitz Languages, Inc., Editions Berlitz, S.A., Berlitz Publications, Inc., and other affiliates—were acquired by Macmillan Co., a U.S. based publishing house and subsidiary of the global media magnate, Maxwell Communication Corp. plc (MCC). The new entity was renamed Berlitz International, Inc. With the unexpected death of Robert Maxwell in late 1991, much of his media empire crumbled and fell into the hands of bankruptcy courts, casting doubt over Berlitz’s future. Berlitz, however, insisted that it maintained control of its assets and operated independently of the Maxwell chaos. Two days after Maxwell’s death, MCC sold its 56 percent stake in Berlitz for $265 million to Fukutake Publishing Co., Ltd., a leading Japanese publisher specializing in correspondence classes, which had already purchased a 20 percent stake in Berlitz Japan in 1990. By 1992, Fukutake’s share in Berlitz had grown to 67 percent, with the remaining stock held by public shareholders. Fukutake, a leading Japanese publisher of correspondence courses and other educational materials, combined its resources with those of Berlitz to provide optimal language services worldwide.

Fukutake planned to boost its services throughout the world, with special emphasis on regions of Asia where Berlitz was not as well positioned. With services in Taiwan (since 1989) and South Korea (since 1991), Fukutake announced plans to begin test marketing in China in the mid 1990s. “Economic development and a rise in willingness to learn supplement each other,” the company’s president said in a November 21, 1994 article in The Nikkei Weekly.

Under the management of Mr. Soichiro Fukutake, chairman, and Mr. Hiromasa Yokoi, vice-chairman, CEO, and president, Fukutake took aggressive steps to expand its services in tandem with those of Berlitz, as well as to streamline operations while leveraging the use of technology in the classroom toward greater customer satisfaction. In 1995, the company launched a campaign to maximize its customer services across the board. As part of that effort, in 1995 Fukutake changed its name to the Benesse Corporation. The new name combined the Latin words “bene” and “esse,” meaning well-being, to drive home the company’s commitment to support customers’ personal aspirations for a better life, according to company materials.

In 1995, Berlitz launched an identity-refreshing campaign of its own. The company introduced a new, clean-lined logo and a new, company-wide tagline, “Helping the World Communicate.” Berlitz’s identity-building efforts intended to reinforce not only its position as the world’s premier provider of language services in general, but its tendency to set world standards in those services.

Indeed, with its new Japanese parent, Berlitz would apply some of its own lessons in language instruction and cross-cultural skills to continue its impressive trajectory of growth. Whether Professor Maximilian D. Berlitz’s trademark methods were good, bon, bueno—or any other derivation thereof—their merit continued to bolster the success of this well-spoken company.