Given the power of technology to bring people together from a business and social setting, building relationships are becoming a reality, especially when it initially brings people together in a virtual environment. As technology advances, so does the internet dating industry. Therefore, I would expect a strong rate of growth from the current financial position that eHarmony is in. The growth objective for eHarmony is to grow steadily to about 3% per year through the end of 2016. In fact, revenue has slowed from 70% in 2006 to suddenly only 10% by 2008. eHarmony is a privately held company, so unlike Match.com, which is publicly owned they do not have to release any public financial statements. However, it is estimated that eHarmony earned about $250 million in revenue last year and has about 13 percent of market share in the dating industry. Therefore, with the revenue objective to have revenue grow to 3% annually, we would anticipate growth to reach $290M by 2016. Although growth has declined, the amount of subscribers remains higher than ever. However, the profit margin will likely decline because of the amount of technology and marketing invested, which may impact the return on sales.
The return on sales objective for eHarmony is to remain a positive percentage throughout the 5 year period. The eHarmony website will generate recurring sales revenue from the monthly subscription fees. Management will aggressively reinvest this revenue stream into additional marketing campaigns so that the Company can increase its visibility throughout the internet. The return on sales objectives should adhere to some of the promotional items that may attract more subscribers. Given the increase in expenses, the need to adjust price may be necessary.
The sales objectives that should be evident for eHarmony are increased sales, increased market share and brand extensions. However, the most important objective is to increase sales and profits. Certain ads often have sales...
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