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Case Assignment 2 (Eharmony)

The online dating market is highly competitive with high threats from rivals, new entrants, and substitutes. eHarmony differentiates itself through its personality matching system and guided communication process. However, competitors pose a significant threat by improving on eHarmony's model, targeting markets it does not serve, or combining matching systems. Rivals like Match.com directly copy aspects of eHarmony's matching process and free alternatives attract more users than eHarmony's paid model. The competitive threats could undermine eHarmony's advantage in the online dating market.

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109 views

Case Assignment 2 (Eharmony)

The online dating market is highly competitive with high threats from rivals, new entrants, and substitutes. eHarmony differentiates itself through its personality matching system and guided communication process. However, competitors pose a significant threat by improving on eHarmony's model, targeting markets it does not serve, or combining matching systems. Rivals like Match.com directly copy aspects of eHarmony's matching process and free alternatives attract more users than eHarmony's paid model. The competitive threats could undermine eHarmony's advantage in the online dating market.

Uploaded by

Jack
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Q1) 

How attractive is the online personals market? (Make a very brief 5-forces analysis for this
industry: write at most 2 key points for each of the forces)

It reflects an industry's serious atmosphere. It is a critical tool that is used to avoid or reduce the risk of
losing the organization's significant advantage and to ensure the long-term productivity of the
products. eHarmony pays close attention to its vision since it allows it to focus its growth in terms of
venture and method selections. The profit of the eHarmony is dependent on the following powers:

· Rivalry
· Threat of New Entrants
· Threat of Substitute
· Supplier Power
· Buyer Power

Rivalry: HIGH

The competition among organizations aids in differentiating the advantage of an industry in which
firms are competing hard to maintain their power inside the company. The eHarmony rivalry is also
based on diversity, growth in the industry, and obstacles related to admittance on the lookout. Plus, As
reported in the publication, the number of rivals is growing and the industry's size might double by
2012. There has also been a significant increase in the number of websites and apps that provide the
same service in 2008.

The substantial dispute is the examination of the brands and the item, its characteristics and
shortcomings, as well as the methods, competitors, and the offer on the lookout.

The threat of New Entrants: HIGH

It is in the best interests of the organizations that exist in the market to create barriers for new players
to prevent them from entering the market. The associations might be new groups or organizations that
desire to widen their horizons. Boundaries might be mechanical as well as legal.

Aside from that, the size and reputation of the firms that are already operating in the market play an
important role. Furthermore, the cost of the journey, access to raw resources, cultural and specialized
principles all play a role and might affect the decision of the new candidates on the lookout.

The threat of Substitute: HIGH

eHarmony replacement goods are alternatives that are available on the market at lower prices. Such
objects triumph due to technical and artistic advancement. As a result, the products generated by
organizations that are currently on the lookout and utilizing a comparable innovation are substituted by
other companies' things that are comparably superior in terms of cost and quality and are transported
from regions with key advantages. The replacement goods are risky since the firms are always at risk
of getting substituted.

However, alternatives such as social networking and niche websites like free do-it-yourself resources
are on the rise. That's because it provides comparable services and most of them are likewise aimed at
a broader audience. So, because of the fear of being substituted by another item, a high risk of
substitution results in a low benefit because it limits the company's advantages by putting a value roof
in place. Aside from that, it has an impact on the general growth prospects of the organization while
diminishing the benefit edges.

Supplier Power: LOW


Remarkable suppliers have a greater ability to grab a large incentive for themselves by demanding
exorbitant rates while limiting the quality and quantity of the item or services or by shifting the
expense to the member of the organization. Many conditions imposed by suppliers often recall the
growth for cost while haggling the quality and quantity. For the eHarmony, you may find a variety of
vendors that can quickly and affordably put up a website or application.
A supplier's market power is strong if and only if the following conditions are met:
 It is more concentrated than the business to whom it caters.
 It is not too reliant on the business for its advantages.
 If the members of the company must incur considerable expenditure to exchange providers, or
if the organizations are located next to the providers generating offices.
 The items given by the suppliers are vastly different.
 Also, if there is no close free equivalent for the things given by the suppliers.

Buyer Power: LOW

By imposing conditions that are unfavorable to suppliers in terms of price, quality, or service, buyers
with strong bargaining power might significantly reduce their advantage. For eHarmony, identifying
customers is critical for organizations to avoid becoming too reliant on consumers. The level of buyer
interest and convergence gives them a lot of power.
Wonderful customers might turn the tables on amazing supply by driving down prices and demanding
excellent quality and service by forcing price and quantity competition among organization members.
If the firm is price sensitive, customers might push providers for more price reductions. The sector in
which eHarmony operates has a large number of clients and low switching costs. They also have the
option of using or not using the service.
The client is accepted to have solid purchasing power if:
 If the number of purchasers is limited or if each customer purchases a sizable sum in
comparison to the provider's size.
 The business's goods are either standardized or undifferentiated.
 Exchange is a reasonably inexpensive activity.

Q2) Comment on eHarmony's competitive positioning. What differentiates eHarmony from its


competitors?

It distinguished itself from other personal sites by giving an integrated system that featured a
personality profile that flowed into the matching algorithm and then into the guided discussion system.
Even though eHarmony seems to operate under a more tightly controlled system, it is logical that they
charge for their services; nonetheless, the new law has placed their competitive position in peril. While
it has its benefits, it also has its drawbacks, such as the fact that there are 250 questions to answer and
that it takes a significant amount of time and work to complete. If the registration process takes an
excessive amount of time, people will grow bored quickly. I believe that concentrating just on the
heterosexual sector is a grave mistake, especially considering the enormous rise of the very same
market in recent years. eHarmony established a pretty much identical site called Compatible Partners,
but it did not get the same level of attention as the original site. The reputation of eHarmony was
harmed in 2008 when a lawsuit was launched against them.

Q3) How serious is the competitive threat to eHarmony? Why?

Competitors pose a significant threat to eHarmony. However, no one can anticipate what will happen
in the future, regardless of enrollment rates or revenue earned. To begin, they may take their idea and
improve it, either by tapping into business areas that eHarmony does not have access to or by
combining it with other matching systems. Now, their main rival is Match.com. For the "genuine
relationship market" that eHarmony has committed to represent, Match has just created a new website
named Chemistry. Even their matching procedure is similar to the eHarmony, consisting of three
stages. eHarmony's websites vary in their ease of registration. For technical reasons, eHarmony was
unable to accept customers.

In addition, the way consumers react to free products poses a competitive challenge. Free site
registration is fast-filled. Making a payment is considered a hindrance by certain sites. These websites
have 20% more views than eHarmony, for example. Specialist sites are dangerous because they attract
a large proportion of the gay and lesbian population. eHarmony has yet to fully utilize this market.
Online informal groups pose a risk since they act as a major dating search tool. 

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