Eharmony Industry Analysis Essay
eHarmony Industry Analysis
eHarmony is an online dating site, allowing people with similar values to find each other, by using detailed analysis and guided communication. The unique value proposition comes from the extensive relationship questionaire, matching system and guided communication between parties. As the founder of eHarmony, Dr. Warren, states, with those capabilities, their aim is to change the world (1).
We will analyze the industry of eHarmony. For the analysis we will uses five forces. Five forces gives great idea about the competion level in the industry. Hence profitability and success in the industry is directly related to the five forces.
Let us first start with “Threat Of Entry”. Overall there are around 850 personal sites on the internet. Every year 850 more sites enter the industry. Although it seems the threat of entry is high, almost all of the new entrants fail the business and leave the industry. This is due to the capital requirements and brand name. Every new comer has to …show more content…
When we consider costwise, eHarmony’s main rival Chemistry, which was born from Match, has 10% lower prices. However this does not affect the preference of the buyers:, buyers do not change from eHarmony to Chemistry due to that. Also free “Do-it-yourself” sites do not have sustained customer base as eHarmony. Although it seemed that bargaining power of buyers is not too much, buyers has another influence: Lifetime. When customers enroll to eHarmony, they pay monthly fee. But when they find a spouse, there is no necessity to continue the membership. The average time to find a spouse is four to six months and therefore buyers leave the system after that. The system is actually “self destructive”, i.e. the aim is to find a spouse, but after finding a spouse buyers will high probably leave the system. So eHarmony has to always find new customers to keep up its revenue. So in that sense, buyers have a very strong affect as
eHarmony is an online dating site, allowing people with similar values to find each other, by using detailed analysis and guided communication. The unique value proposition comes from the extensive relationship questionaire, matching system and guided communication between parties. As the founder of eHarmony, Dr. Warren, states, with those capabilities, their aim is to change the world (1).
We will analyze the industry of eHarmony. For the analysis we will uses five forces. Five forces gives great idea about the competion level in the industry. Hence profitability and success in the industry is directly related to the five forces.
Let us first start with “Threat Of Entry”. Overall there are around 850 personal sites on the internet. Every year 850 more sites enter the industry. Although it seems the threat of entry is high, almost all of the new entrants fail the business and leave the industry. This is due to the capital requirements and brand name. Every new comer has to …show more content…
When we consider costwise, eHarmony’s main rival Chemistry, which was born from Match, has 10% lower prices. However this does not affect the preference of the buyers:, buyers do not change from eHarmony to Chemistry due to that. Also free “Do-it-yourself” sites do not have sustained customer base as eHarmony. Although it seemed that bargaining power of buyers is not too much, buyers has another influence: Lifetime. When customers enroll to eHarmony, they pay monthly fee. But when they find a spouse, there is no necessity to continue the membership. The average time to find a spouse is four to six months and therefore buyers leave the system after that. The system is actually “self destructive”, i.e. the aim is to find a spouse, but after finding a spouse buyers will high probably leave the system. So eHarmony has to always find new customers to keep up its revenue. So in that sense, buyers have a very strong affect as