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, eHarmonys 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 GregForgatch 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 eHarmony2005: New CEO and President Grew to 230 employees, half of which were in customer service2007: eHarmony Labs openGoals: Turn results into insights that would help them create new business opportunitiesConvert users to paid subscribersBecome 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 eHarmonys biggest competitor Owned by InterActiveCorp (IAC) Owns 28.1% of online dating market share 2003: AOL and MSN co-marketing leads to overseasexpansion 2006: Chemistry launched, entered serious relationshipsegment 2007: Ad spending increased to match eHarmony % ofsales 8. Customer Environment Social acceptability Privacy concerns Trends: Only 16% of US singles (7% of adult population) reported currentlylooking 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, andincome 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 youre looking for a life partner, you use eHarmony Positioning eHarmony is committed to helping singles find loveevery day, and with over 20 million registered online users, we are confident in our ability to do so. 11. Core Competencies Matching algorithm based onscience Extensive registration process filterslurkers 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 companyin the long-term relationship segment? Broaden customer base to include more casual daters? Grow a new business based on eHarmonys ownresearch and development efforts? Rapid geographic expansion? 14. What Should the CEO Do? Defend position as the leading matchmaking companyin the long-term relationship segment? Broaden customer base to include more casual daters? Grow a new business based on eHarmonys ownresearch 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 eHarmonys existing research 16. Global Expansion Expand first to English-speaking countries Next, expand to countries with similarcultures and values Use eHarmony Labs to obtain information Compete with Match.com on a global scale