Eharmony

762 Words4 Pages
Case study: eHarmony Concepts of a case study: General to specifics. The economic, strategic and business logic of the industry. What are the choice, pros, cons, trade off. Intro eHarmony: online dating site for marriage-minded individuals. It combines extensive relationship questionnaire, patented matching system and guided communication. Information good of eHarmony: individual match. Match: eHarmony biggest competitor. I. Overall view of the industry | Size | Information flow | interaction | activities (work, random encounters) | 3 | 1 | 3 | brokers (family, friends) | 2 | 2 | 1 | market (parties, bar, club) | 1 | 3 | 2 | Interaction: how easy it is to get a relationship out of random encounters,…show more content…
Most important costs are advertising costs The profit depends on the market size. How many subscribers | Match | Yahoo | eHarmony | Revenue | $349 Million | $172.5 million | $ 190 million | Advertising | $145 Million | $ 17 million | $ 80 million | Profit | $204 Million | $155 million | $110 million | # subscribers | 1.3 Million | 900 000 | 600 000 | Profit/ Subscribers | $157 per year | $172 per year | $183 per year | Per month | $13.08 | $14.33 | $15.28 | Profits are not that great for such a differentiation strategy. Quantification shows that the business model is under severe threats. What next? 4 options: * Defending eHarmony’s position as the leading matchmaking company in long term relationship. * Broadening the customer base to include more casual dates * New business based on either eHarmony’s research and development efforts * Rapid geographic extension Two options: expansions geographic or with the development of new business area. Two options: addressing the core business, defending the market segmentation or broadening, moving away from the market segment. Defending the position and stopping rejecting customers contradict each other. If you stop rejecting customer you deviate from the original business model. If you stop rejecting your consumer, you cannot expand geographically because you wont believe in your business model. Particular focus is Chemistry. All the options
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