EHarmony Case Solution

1. Is online dating an attractive business to be in? How big is the (potential) market for online dating? What advantages and disadvantages does online dating offer in comparison to other ways to meet potential dates and romantic partners?

Online dating is a lucrative endeavor owing to the pool of eligible bachelors which is huge and people who no longer want to rely on friends & family or matchmakers in order to find their partners. An increase in broadband access to the Internet and computer literacy also expands the potential market. People launching such a site are entitled to making a lot of fortune out of these, as at least what the trends depict. In that case, such an online easy-to-access service would open new horizons for partner-seeking individuals to get a perfect match with minimal effort. Social acceptability & reduced feeling of awkwardness for being on personals websites, acknowledging attitude towards online dating not only by younger population but elderly people as well, are all potent factors to make it an attractive venture.

However, there are certain pitfalls of online dating. Scammers with fake profiles can harm your trust and money both. The personal information you provide is permanently saved with the site service and can potentially be used against you if site security policies are breached by any hacker. Misrepresented dating profile and victimization by sexual predators & felons can also be a case. At the same time, perils of online dating include filtering & meeting compatible individuals out of billions just in a snap and meeting people from a broadened scope of your search. There is no need to go through the hassles of dressing up and going on dates before discovering the likeliness of the partner.

2. Do a "six forces" analysis of eHarmony.

• Bargaining Power of Suppliers: The owner of the site exercises control over the site can increase subscription costs anytime he wants and even impose an extra cost on differentiating inputs and exclusive services like match-making for homosexuals or already married individuals. They may put you in a compulsion to provide personal data that you don't want to share online but the supplier finds it necessary.

• Bargaining Power of Customers: The subscribers of the site can pressurize the owner to alter or modify service policies or even file law-suits against prejudiced attitude towards people with different sexual preferences. This may be due to other sites having leverage over eHarmony's prices and customer base.

• Competitors: eHarmony's competitiveness is determined by the rivalry it faces in the dating market. Effective innovative competitive strategies and marketing policies can help it overcome not only online but offline match-making companies, as well.

• Threats of New Entrants: The attractiveness of online dating business attracts many new service sites that tend to affect eHarmony's profit and customer rates. Site would count on brand equity and customer loyalty in such a case.

• Substitute Services: A more alluring eligible partner base, sound data security measures, empathy to various sexual and age preferences, flexible policies, newer offers etc tend to switch customers from eHarmony to other matchmaking online websites. A number of sites available in the market and depreciated services adversely affect it.

• Complimentary Services: Videos, e-mails, video conferencing, sharing albums, arranging first meetings etc are all the complimentary services that should be incorporated in eHarmony's corporate strategy in order to subdue the rivals in the market.

3. What differentiates eHarmony from other online dating sites? What are eHarmony's competitive advantages and why?

Unlike other online dating websites, eHarmony has an edge over its 3 step formula: the personality profile, matching algorithms and guided communication. It is a distinguishing platform for eHarmony's performance in ensuring long-lasting relationships and not merely temporary hook-ups with false initial compatibility impressions. Once an applicant is done filling in the personality profile, the responses are fed into a scientific matching Algorithm. If the applicant is lucky enough to have matches from the profile database, then he/she is required to purchase a subscription to lead any forward. The famous saying goes like "opposites attract" but this anti-notion tool is based on the belief that extended areas of similarity between two individuals can flourish the most long-lasting and strong relationships. Intellectual capacity and emotional stability are two key- determining factors to the strength of ties. The Algorithm competitive advantage that eHarmony enjoys is a result of keen research on about 4000 married couples who validated the Matching Algorithm's efficacy. The couples' top position in Dyadic Adjustment Scale was scientifically supported by this method. Initially frowned upon as a marketing gimmick, it soon turned out to people how couples married through eHarmony lived way more happily than other match-making websites that don't employ any Matching Algorithm tool. The matching system initiated from taking information from personality profile informed both parties about basic demographic info they wanted and lastly led to more elaborative interviewing session. Other online dating sites do not privilege the members with setting up their screening preferences, which made eHarmony the latest sensation of the generation.

4. Is eHarmony's competitive advantage sustainable? How serious is the competitive threat? Which competitors are the most serious threat and why?

The competitive advantage that eHarmony cherishes upon is apparently sustainable since its copyrights lie with the company and matching the Algorithm is patented. However, in this fast-paced competitive market, innovation and newness is the key to success because that is what customers look forward to. In the efforts to cope up with eHarmony's strong- built market reputation, large members' base and scientific breakthrough in the form of Algorithm software, other rivaling online dating sites can come up with new and advanced Algorithms that will have the potential to break eHarmony's market grip.