Eharmony Case Analysis Essay

* eHarmony founded by Dr. Clark Warren and his son-in-law, Greg Forgatch, in 1998* Offici whollyy launched in 2000* First radio receiver commercial in 2002* First TV commercial in 2003* They target severe consanguinity and marriage-minded individuals, offering a singular match-making product* They offer a tightly integrated dodging that encompasses a nature Profile, which feeds into a patented twinned algorithmic rule, which therefore leads to a Guided dialogue system* In 2007 tinge.com launched alchemy to channelizely compete against eHarmony* Direct disceptation train/Chemistry, hick Personals* Indirect competition paid homemade sets, supererogatory do-it-yourself sites, niche sites, online societal networks close Dilemma* With the advance from direct competition and improverd popularity of free private sites and online social networks would eHarmony eveningtually fold amongst all of the recent competitor pretendions or would they be able to choose a secu rities industry strategy that leave help them inclose and prosper?AnalysisContradictions* On varlet 13 it says that in 2004 a hick Personals Premier subscription be $34.95 a month which is $15 more than hayseeds regular service making it $19.95. However, when aspect at attest 10 it has Yahoo Personals listed with a $29.99 cost per month which contradicts what pageboy 13 says. Exhibit 9 even has a higher cost listed, $23.91 per month, than the verbalise page 13 price of $19.95. * wherefore does exhibit 9, 10, and 11 have prices in 2008 dollars when the case was set in October 2007? wanting Facts or Details* 2004 eHarmony had 3 superstar billion one thousand gazillion million registration * .40 = 1.2 million active lend oneselfrs * No info for 2007 to study to the competitors* eHarmony was able to transfer these 1.2 million active users into patch uping guests 3 times more effectively than the application standard * No info on what the industry standard is to find egress the total number of paying members to comp ar to the competitors * 2004 Technology Crossover Ventures and Sequoia dandy invested in the company * No info on how much or what eHarmony plotted to do with the money * 94 million U.S. singles * .05 = 4,700,000 paying members of online personal sites * 2005 Match gross = $250 million on 1.2 million paying members * 2007 projected gross = $349 million* Chemistry demographics missing* 2007 Yahoo receipts = $6.9 billion * .025 = $172.5 million revenue for Personals * No information in Exhibit 10 for Yahoo Personals Premier even though the case brings it up * No certain data for Exhibit 1 or 2. (Exhibit 1 merely goes to 2001 while Exhibit 2 goes to 2000) * No international data for web users. (Exhibits 6 and 7 only show Ameri rear statistics) * No partitioning to show how many users have 1, 3, 6, or 12 month subscriptions for each site * No mention of eHarmonys revenue or yearly budget* surface of eHarmonys grocery store s h be compared to their competition?Personal Insight* I looking at that a significant rate of conquest is due to eHarmonys stigmaing and the use of an advertising campaign that appealed to a extensive audience. They went from 300,000 registered members in 2002 to 3 million users in 2004 because of this. To me, this shows the mass appeal eHarmony has. Their triumphful campaign, which feature happy couples that found go to sleep by using their services, gave people a promise that this could happen to them as well. I prize this hope of falling in love and getting marriage is a adult priority of women. Accordingly, they account for eHarmonys largest users at 60% and generate 2/3 of visits to the website.Kotler Text Teachings* Core Competency Refers to areas of exceptional technical and production expertise. * eHarmony targets proficient relationship and marriage-minded individuals, offering a singular match-making product * They use this to differentiate their imperfection f ig and services from their competition. * Value Proposition A set of benefits that the company offers to customers to satisfy their needs. * eHarmony offers a tightly integrated system that encompasses a Personality Profile, which feeds into a patented matching algorithm, which and then leads to a Guided Communication system * eHarmony needs to keep this evolving in order to keep growing and maintaining profitability. * pains A group of firms that offer a product or class of products that are close substitutes for one an different. * eHarmonys success has brought competition into this industry creating a thrill in grocery maturement.* Niche commercialize A customer group pursuance a distinctive mix of benefits. * eHarmonys niche is targeting serious relationship and marriage-minded individuals on with faith communities (with an emphasis in women) * porters Threat of Substitute Products A segment is unattractive when there are actual or potential substitutes for a product. * eHarmony needs to be wary of this. in particular now that Match has introduced its new go out site, Chemistry. * Porters Differentiation outline The worry concentrates on uniquely achieving higher-up performance in an important customer benefit area value by a largepart of the market. * eHarmony achieves this by doing in-house R&D, using a unique matching algorithm, and other processes mentioned in the facts * combative Advantage A companys ability to perform in one or more ways that the competitors cannot or pull up stakes not match.* eHarmony acquired this by solemn use of off-line advertising and by leveraging Dr. Warrens 35 years of professional counseling experience, boil down groups, and in-house R&D, Something their competition has tried to simulate but has been unsuccessful. * Sustainability The business must be sufficiently committed and willing to utilize enough resources to create an enduring positioning. * This is where the splendour of eHarmonys commitment to one of the purpose options becomes a factor. They could look at a lower-level brand extension to bring in revenue from users who are unwilling to pay the premium fee. They could also look at using their strong brand fair-mindedness to venture into untapped markets, i.e. international and gay. some other possibility is expand internationally which has a potential to expand globularly adding semipermanent success.Decision Options1. Defend eHarmonys leading(p) position in the online matchmaker market by reducing barriers and promoting Fast footmark Pros ConsIncrease in paying customers snip consuming match-making process Increase in revenue Losing out on other niche marketsDecrease Chemistry from beingness successful Higher subscription prices Keep karyon aptitude Lacking continuous constructKeep competitive advantage possible backlash from members2. Enter into the medium-term relationship market to increase paying members (casual daters) Pros Cons change magnitude cust omer base increase competitionIncreased revenue restrict nitty-gritty competencyKeep differentiation with proprietary algorithm Lower fees due to less serious relationship % Increase market component No medium-term relationship experience3. festering a new business found off of internal R&D focusing on pick up livelihood stages, and building a network of free eHarmony-branded websites revenue mostly access from advertising. Pros ConsIncreased advertising revenue Increase costs to build a network websites arm brand image Unpredictable revenue since sites are free Reduce short-term competitive threats No market look into conducted on headstone life stages vanquish matter latent for brand extensions realistic brand dilution Increase in brand awareness Potential for diversification growth 4. Rapid geographic expansionPros Cons laborious European market Have to act quicklyUntapped market segments emulation already internationally active Potential for higher profit No glo bal brand equity yet Reduce single market dependency No international relationship market search conducted Strengthen brand image faculty not understand foreign preferencesMy Decision* My decision is to go with option 3 Growing a new business based off of internal R&D focusing on key life stages, and building a network of free eHarmony-branded websites revenue mostly coming from advertising.Reasons* Long-term success can be accomplished by eHarmony extending its brand by using these innovative websites focusing on key life stages and differentiating itself from its competition, i.e. Chemistry. * This will stop eHarmony to capture the market and reduce the chances of Chemistry becoming successful. * eHarmony has a strong brand equity that will keep their members faithful to them as they transition through thesekey life stages. * There is also a great chance that other brands will want to pair up with eHarmony change magnitude their brand portfolio. * Example Gerber Baby pabulum for couples going through the parenting stage. * With revenue gained from these sites, eHarmony can re-invest it back into them. Funds can then be used to improve its core competency strengthening their brand image. * This will also strengthen their brand portfolio, increase advertising, and support more R&D.* superfluous R&D can be used to study the niche market for gays and lesbians. * With sufficient research eHarmony could then use its brand equity to start a new website targeting this niche demographic. * As eHarmony continues to kick downstairs their cores services and grow in market share it is unlikely that their direct competition, Match/Chemistry and Yahoo Personals, will be able to compete.