For my capstone marketing class at Western Washington we were given a case on eHarmony (from Harvard Business School) and had to decide which strategy they should use for the future.
2. Type of Case
What type of case is it?
Decision Case
Why?
As stated in the end of the case, eHarmony’s CEO needs to decide on
how to address short-term competitive threats and position the
company for long-term success
3. eHarmony Background
Founded by: Dr. Neil Clark Warren (PhD in Psychology) and Greg
Forgatch
When: 1998
Why: Saw an opportunity to help singles in their search for a
serious long-term relationship.
Launched: in 2000 after receiving $3 million from an investment firm
Today, eHarmony has over 20 million registered users
eHarmony currently owns 13.9% of online dating market share
4. Internal Environment
2004: Technology Crossover Ventures and Sequia Capital invested in eHarmony
2005: New CEO and President
Grew to 230 employees, half of which were in customer service
2007: eHarmony Labs open
Goals:
Turn results into insights that would help them create new business
opportunities
Convert users to paid subscribers
Become the leading match-making company in the long-term relationship
segment
6. Industry 5 Forces
Threat of new entry: Low
Competitive intensity: High
Buying power: Low
Threat of substitute: High
Supplier power: High
In this case, suppliers = customers
7. Match.com
eHarmony’s biggest competitor
Owned by InterActiveCorp (IAC)
Owns 28.1% of online dating market share
2003: AOL and MSN co-marketing leads to overseas
expansion
2006: Chemistry launched, entered serious relationship
segment
2007: Ad spending increased to match eHarmony % of
sales
8. Customer Environment
Social acceptability
Privacy concerns
Trends:
Only 16% of US singles (7% of adult population) reported currently
looking for a romantic partner
Men less active in dating
Marriage rate on the decline
Divorce rate changing
9. Segmentation
Gender, marital status, race, age, education, employment status, and
income are all factors in determining compatibility
Type of daters
Casual daters and lurkers
“Medium” daters
Serious daters
10. Targeting & Positioning
Targeting
Heterosexual
Single
Looking for a serious relationship
If you’re looking for a life partner, you use eHarmony
Positioning
“eHarmony is committed to helping singles find love
every day, and with over 20 million registered online
users, we are confident in our ability to do so.”
11. Core Competencies
Matching algorithm based on
science
Extensive registration process filters
lurkers and casual daters
13. What Should the CEO Do?
Defend position as the leading matchmaking company
in the long-term relationship segment?
Broaden customer base to include more casual daters?
Grow a new business based on eHarmony’s own
research and development efforts?
Rapid geographic expansion?
14. What Should the CEO Do?
Defend position as the leading matchmaking company
in the long-term relationship segment?
Broaden customer base to include more casual daters?
Grow a new business based on eHarmony’s own
research and development efforts
Rapid geographic expansion
15. New Business Opportunities
Opportunities to build sites catering to niche markets
Same-sex couples
Dating sites for ethnic groups
Religious dating sites
Dating & relationship advice
Pregnancy & parenting advice
Built upon eHarmony’s existing research
16. Global Expansion
Expand first to English-speaking countries
Next, expand to countries with similar
cultures and values
Use eHarmony Labs to obtain information
Compete with Match.com on a global scale