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eHarmony HBS Case

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Hoa Nguyen

on 12 August 2014

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Transcript of eHarmony HBS Case

HBR Case
By: Hoa Nguyen & Ahmad Haynes

eHarmony is facing emerging threats from competition
eHarmony needs to address recent competitor actions while keeping in mind the dynamics of the modern marriage markets (primary source of consumers)

Which of the four strategic options that are being considered by eHarmony’s CEO and COO should be pursued?
What are the available options?
With its available resources, eHarmony should pursue options 1 and 2
Option 1 - Maintain Segment Leadership
Achieved through the rapid increase in the number of paying members in order to sap market share from competitors
Option 2- Broaden The Customer Base
Choosing to pursue option 1 of defending segment leadership and option 2 of expanding customer base is the best course of action for eHarmony
In its first year, Chemistry spent $10 million in advertising gaining approximately 2 million new users

eHarmony must increase advertising to regain market share

Increased Advertising > Greater Awareness > Increases Revenues
Reduce # of barrier for membership
Over one million people have been rejected because they did not meet eHarmony's strict standards

This represents potential loss of revenue for eHarmony as well as potential revenue increases for competitors

Must find correct balance with entry barriers to increase membership
Encourage the use of Fast Track
This feature allowed the faster progression of interactions between members

Members who opted to use Fast Track had more matches and renewed their subscription more often

A definite competitive advantage for eHarmonry because Match's Chemistry does not have an equivalent feature

Focus on Differentiation
Competition has no differentiation

Can easily sneak in and gain customers
Target other Segments
Can compete with Yahoo's personals and Match.com

Yahoo personals attracted 7million visitors

Several people interested in medium term relationships(Waldorf)
Option 1
Defend eHarmony's position as the leading matchmaking company in the long term relationship segment

Option 4
Rapid geographic expansion, beginning with the European Union where online dating was already very popular
Defend segment
Broadening Customer Base
Based on Jim Harvey's speech structures
Who are the Competitors?
Match.com (Chemistry)

Yahoo! Personals (Premier)

Free Do-It-Yourself Sites (Plenty of Fish)

Online Social Networks (Facebook)

Niche Sites (Christian Mingle)
What Does the Modern Marriage Market Look Like?
About 16% of US singles are looking for a romantic partner

Marriage had reached its lowest point in recorded history

Divorce rates are about 45% with 25% remarriage rate and 6% for a 3rd time
Increase advertising
Marriage Market Statistics
Short-term competitive threat
Long-term success
Option 2
Option 3
Broadening customer base to include more casual daters
Create a new site based on life stage transitions
The End
eHarmony can expand to include medium term relationships without damaging it's brand
Full transcript