Essay about Orders of Magnitude and Online Personals Industry

3426 WordsNov 4, 201014 Pages
EXECUTIVE SUMMARY 1. The online personals industry took its first breath in 1992. In the beginning, the industry experienced very slow growth. Nonetheless, by 2005, due to positive changes in public perception, the industry was booming. By the end of 2007, the industry had grown to a $900 million market. Observers expect the market size to double by 2012. The industry serves its customers by enhancing the ‘self-actualization’ stage of an individual’s (Maslow’s) ‘Hierarchy of Needs.’ It seeks to provide that one-of-kind-product in a way that not only distinguishes the product but the customer itself. The industry’s low customer loyalty rate, high customer bargaining power, diverse range of substitutes, low barriers to entry and…show more content…
Customers “supply” a website with the necessary profile information that helps an online personals website built the necessary “inventory” of singles which attracts more customers. The structure of this industry indicates that companies are in a position to manipulate their suppliers; hence, they are arguably the supplier themselves. Rivalry: Competition in the online personals industry seems to be quite intense. Rivals can easily replicate a competing firm’s technology and claim that their service is superior to its competition’s. Low customer loyalty makes competition even more serious as companies have to spend a lot of money marketing their service to convey two messages: 1) their service is better; and 2) their website is the place to find one’s soul mate. The lack of focus in sending one clear message simply adds on to how much these companies have to spend on their advertising/marketing strategies. Barriers to Entry: A major reason why competition is so intense is that entering into this industry is relatively easy. Individuals simply need to understand the basics of creating a website and be able to gain access to enough networks of singles to claim itself as a player within the industry. Looking at the statics of ‘Niche sites’ segment of the competition in this industry illustrates this point: “(There) were at least 850 different

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