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.

1. eHarmony
By: Keshia Carlson, Zoe Robinson, Melanie Peters, and Whitney Bevelacqua-Haggard

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

5. Major Competitors
 Paid Do-it Yourself Sites
 Match, Yahoo! Personals
 Free Do-it Yourself Sites
 PlentyOfFish, SinglesNet
 Niche Sites
 BlackPeopleMeet, Jdate,
 ChristianSingles, SugarDaddyforMe
 Social Networks
 Facebook, Myspace, etc

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

12. Competitive Advantage
 Differentiation Advantage
 29 Dimensions of Compatibility
 Ability to match people effectively

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