Eharmony Case

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Ashley Garcia
Bus. 5133.01
Texas Woman’s University
School of Management
Dr. Pushlaka Raman
February 16, 2012

SWOT analysis/Competitive advantage
In 2007 eHarmony was faced with four options concerning the future of the company; defending their superior position, opening up the site to casual daters, starting a new business venture, or geographic expansion. In order to understand what made them successful, a SWOT was conducted to analyze both the internal and external environments. Strengths

Everyone has seen an eHarmony commercial on television and most can tell you what kind of service they provide. The company’s stellar reputation in the online dating market can be attributed to a strong marketing/advertising department. Part of the company’s success was due to the matching process. Members were matched based on their responses to an extensive questionnaire and a matching algorithm. This kind of process required eHarmony to be strong in research and development as well. Weaknesses

While the company continues to uphold a good reputation, there are things that can be improved. While the service being offered is unique, exclusivity can hinder market growth. For example, eHarmony does not offer same sex services; they limit themselves to the heterosexual segment. Although the price of the membership is a useful tool in weeding out those people who aren’t serious, it may also turn away those who are. The company is also geographically exclusive; with services only provided in the U.S. Opportunities

Taking a glance at the weaknesses exhibits that there is room for considerable market growth in varying ways. While the homosexual segment is small in comparison to the heterosexual segment, the demand is still there. Another weakness is the lack of market presence internationally. Although many wondered “whether U.S. based research could credibly predict matching patterns in other countries”, this opportunity could be profitable (Ferrell & Hartline, 2011). Managing lifestyle transitions is another great opportunity. Preparing couples for pregnancy and birth, would help eHarmony retain members longer after entering into relationships. Threats

Every business encounters various situations in which their position may be challenged. EHarmony’s biggest competitor is Match.com, who also has a serious relationship segment called Chemistry. With revenues of $250 million their presence was major in the online dating market. The recession could also negatively impact the company. With a one month subscription costing $59.95, people may be less willing to spend that kind of money. Legal situations can also arise that may damage a company’s image. For example, “California’s Unruh Act Carlson v. eHarmony, filed by a lesbian woman accusing it of discrimination because it does not offer services for people who want same sex matches” (Ferrell & Hartline, 2011). While eHarmony doesn’t believe this lawsuit will amount to anything, all companies must be prepared to address such issues. Competitive Advantage

After the SWOT was conducted it was easy to see that eHarmony’s competitive advantage is that it has created a niche for itself in the online dating market. The company offers services to those people who are seeking serious relationships. The unique matching algorithm and extensive questionnaire are used to pair people with similar interests and romantic interest signals. EHarmony offers a premium service and therefore can charge a premium price. Due to their unique services they have become forces to be reckoned with in the online dating market. Opportunities-Pros and Cons

The opportunities available to eHarmony are market growth; both internationally and in the homosexual segment, and managing life stage transitions. Expansion into the international market has several pros. First, the potential for gaining millions of new members is high. Combined with the U.S., English speaking and European countries can...
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