eHarmony Case Study Questions

Which strategic risk most directly threatens eHarmony's differentiation focus strategy?

A. Free dating sites attracting casual users who were never part of eHarmony's target market.

B. Competitors like Chemistry.com replicating core matching features and targeting serious relationship seekers

C. Rising marriage age reducing the number of singles willing to use online dating services

B. Competitors like Chemistry.com replicating core matching features and targeting serious relationship seekers

If eHarmony removed its strict screening and accepted nearly all applicants, what would be the most likely strategic consequence?

A. Conversion rates would increase because more users would complete the signup process.

B. The quality and compatibility of matches would likely decline, reducing trust in eHarmony's core value promise.

C. The company could lower prices to compete more effectively with free dating sites.

B. The quality and compatibility of matches would likely decline, reducing trust in eHarmony's core value promise.

Which external industry shift most strongly indicates that eHarmony should consider expanding its product scope beyond long-term matchmaking?

A. Explosive growth of free, ad-supported dating platforms like Plenty of Fish

B. Increasing customer expectations shaped by social networks like Facebook and MySpace

C. Match.com's increased advertising spend and declining website traffic

A. Explosive growth of free, ad-supported dating platforms like Plenty of Fish

Why might eHarmony's heavy reliance on scientific legitimacy for its algorithm become a long-term strategic vulnerability?

A. Users may prefer more visually based matching instead of personality-driven matching.

B. Competitors can challenge or undermine the scientific claims, making differentiation less credible.

C. The patented technology will eventually expire, making the exact algorithm public domain.

B. Competitors can challenge or undermine the scientific claims, making differentiation less credible.

Which strategic option would best mitigate eHarmony's vulnerability to rising customer acquisition costs in the U.S. market?

A. Expand internationally into markets where online dating is already popular

B. Reduce advertising while increasing prices to reinforce premium positioning

C. Build complementary life‑stage services (weddings, parenting, elder care) with ad‑based revenue

C. Build complementary life‑stage services (weddings, parenting, elder care) with ad‑based revenue

From a strategic fit perspective, which proposed growth option has the weakest alignment with eHarmony's established competitive advantage?

A. Broadening into medium-term relationships using a lighter version of its matching algorithm

B. Entering free, ad-supported casual dating markets

C. Launching new services based on long-term relationship research

B. Entering free, ad-supported casual dating markets

Chemistry.com's decision to reject eHarmony's "closed door" approach to membership most directly attempted to exploit which of eHarmony's weaknesses?

A. Its reliance on a time-intensive signup process

B. Its exclusion of certain user groups, such as those in same-sex relationships

C. Its higher pricing structure compared to other paid sites

B. Its exclusion of certain user groups, such as those in same-sex relationships

Which element of eHarmony's business model provides the strongest barrier to imitation?

A. High advertising spending

B. Patented scientific matching algorithm

C. A large pool of online daters

B. Patented scientific matching algorithm

What explains eHarmony's unusually high conversion rate relative to other dating sites?

A. The free browsing capability

B. A highly curated user pool and long questionnaire

C. Lower prices than competitors

B. A highly curated user pool and long questionnaire

Why does Chemistry.com represent a greater threat to eHarmony than Plenty of Fish?

A. Chemistry is free for all users.

B. Chemistry directly targets serious relationship seekers, eHarmony's core market.

C. Chemistry uses social networking instead of matching.

B. Chemistry directly targets serious relationship seekers, eHarmony's core market.

What strategic disadvantage results from eHarmony's refusal to serve same‑sex couples?

A. Higher marketing costs

B. A smaller potential market and vulnerability to competitor messaging

C. A weaker matching algorithm

B. A smaller potential market and vulnerability to competitor messaging

Which industry trend most threatens eHarmony's premium pricing strategy?

A. Rising divorce rates

B. Explosion of free dating sites

C. Increased TV advertising

B. Explosion of free dating sites

Why are online social networks partially substitutable for dating sites?

A. They offer structured guided communication.

B. Users can meet potential partners with greater profile authenticity.

C. They charge high subscription fees.

B. Users can meet potential partners with greater profile authenticity.

What is the major risk of reducing barriers to joining eHarmony (e.g., accepting more applicants)?

A. Higher marketing expenses

B. Lower match quality, weakening the brand promise

C. Lower subscription prices

B. Lower match quality, weakening the brand promise

Which strategic option offers the highest long-term diversification potential for eHarmony?

A. Competing in casual dating

B. International expansion

C. Life-stage services (weddings, parenting, elder care)

C. Life-stage services (weddings, parenting, elder care)

What explains why eHarmony's advertising is unusually effective compared to rivals?

A. It uses famous celebrities in every ad.

B. Ads emphasize authentic success stories that match the brand promise.

C. It advertises only online.

B. Ads emphasize authentic success stories that match the brand promise.

Why might eHarmony's heavy reliance on TV advertising be a long-term risk?

A. TV is becoming too cheap relative to digital channels.

B. High acquisition costs reduce margins, especially as competition increases.

C. Users no longer watch any TV.

B. High acquisition costs reduce margins, especially as competition increases.

What competitive advantage does eHarmony have over do‑it‑yourself dating sites like Match?

A. Lower prices

B. More control over match quality through algorithmic matching

C. Free membership

B. More control over match quality through algorithmic matching

Why is international expansion risky for eHarmony?

A. Foreign markets have no interest in online dating.

B. Compatibility research was built on U.S. couples and may not generalize.

C. eHarmony has no marketing budget left.

B. Compatibility research was built on U.S. couples and may not generalize.

Why does the presence of free sites indirectly benefit eHarmony?

A. Free sites encourage users to value compatibility algorithms.

B. Free sites generate large dissatisfied user groups who later seek curated services.

C. Free sites reduce the number of online daters.

B. Free sites generate large dissatisfied user groups who later seek curated services.

What is the main strategic purpose of Guided Communication?

A. To slow users down and reduce engagement

B. To facilitate deeper conversations aligned with long-term compatibility

C. To allow immediate free messaging

B. To facilitate deeper conversations aligned with long-term compatibility

What operational challenge arises from mixing paying and non-paying users?

A. Paying users may not receive photos.

B. Paying users may message inactive or non-paying users without receiving responses.

C. Non-paying users gain access to wedding services.

B. Paying users may message inactive or non-paying users without receiving responses.

Why does Chemistry's "rejected by eHarmony" campaign pose a strategic threat?

A. It questions eHarmony's prices.

B. It exploits eHarmony's exclusion policies to portray the company as elitist or discriminatory.

C. It promotes lower barriers to joining.

B. It exploits eHarmony's exclusion policies to portray the company as elitist or discriminatory.

Which customer segment represents eHarmony's fastest-growing group?

A. Users under 25

B. Users over 45

C. Divorced men only

B. Users over 45

Why might expanding into medium-term relationships be strategically feasible for eHarmony?

A. It aligns with free-site user expectations.

B. It broadens the customer base without fully abandoning the compatibility value proposition.

C. It eliminates the need for the algorithm.

B. It broadens the customer base without fully abandoning the compatibility value proposition.

Why does eHarmony reject up to 20% of applicants?

A. To reduce server costs

B. To maintain a high-quality, commitment-ready user pool

C. To comply with state regulations

B. To maintain a high-quality, commitment-ready user pool

What key motivation underlies eHarmony's investment in long-term R&D and psychological studies of couples?

A. To develop entertainment content

B. To deepen understanding of compatibility and create new science-backed services

C. To reduce the questionnaire length

B. To deepen understanding of compatibility and create new science-backed services

Fragmented industries are typically…

A. Dominated by a few large firms
B. Characterized by high barriers to entry
C. Composed of a large number of small and medium-sized companies

C. Composed of a large number of small and medium-sized companies

A major competitive problem in fragmented industries is:

A. Excessive product proliferation
B. High threat from potential competitors and low power over customers & suppliers
C. Difficulty in identifying early majority needs

B. High threat from potential competitors and low power over customers & suppliers

Which strategy is associated with achieving cost leadership in fragmented industries?

A. Chaining
B. Divestment
C. Harvesting

A. Chaining

Embryonic industries begin to develop when:

A. Technological innovation creates new market or product opportunities
B. Complementary products become widely available
C. Price leadership reduces rivalry

A. Technological innovation creates new market or product opportunities

Which factor contributes to slow growth in embryonic/growth industries?

A. Strong industry rivalry
B. Limited performance and poor quality of the first products
C. Excess capacity

B. Limited performance and poor quality of the first products

A mass market develops when:

A. Distribution channels become specialized
B. Technological progress makes the product easier to use and increases its value to the average customer
C. Firms consolidate through mergers

B. Technological progress makes the product easier to use and increases its value to the average customer

Innovators and early adopters are typically:

A. Price-sensitive and numerous
B. Technologically sophisticated and tolerant of engineering imperfections
C. Primarily reached through mass‑market channels

B. Technologically sophisticated and tolerant of engineering imperfections

A key competitive task in growth industries is:

A. Maintaining the cost advantages of the early majority
B. Maintaining the first mover advantage built in the embryonic stage
C. Limiting complementary product development

B. Maintaining the first mover advantage built in the embryonic stage

To cross the chasm, companies must:

A. Reduce emphasis on distribution channels
B. Correctly identify needs of early majority users
C. Avoid altering their business model

B. Correctly identify needs of early majority users

A factor affecting market growth rates is:

A. Production flexibility
B. Observability
C. Consolidation intensity

B. Observability

A defining characteristic of mature industries is:

A. High product uncertainty
B. A few large companies dominate the industry
C. Low interdependence between firms

B. A few large companies dominate the industry

A strategic problem in mature industries is:

A. How to satisfy innovators
B. How to create a bigger “pie” by reducing the intensity of rivalry
C. How to overcome limited distribution channels

B. How to create a bigger “pie” by reducing the intensity of rivalry

A strategy to deter potential entrants in mature industries is:

A. Niche strategy
B. Threat of price war (maintaining excess capacity)
C. IT/Internet business models

B. Threat of price war (maintaining excess capacity)

Which strategy focuses on avoiding price competition in mature industries?

A. Price signaling & price leadership
B. Harvest strategy
C. Chaining

A. Price signaling & price leadership

A key competitive question in declining industries is:

A. How to expand the product proliferation
B. Should the company continue to stay in this industry?
C. How to best position for early majority adoption?

B. Should the company continue to stay in this industry?

A harvest strategy in a declining industry involves:

A. Sacrificing market share and preparing for exit
B. Rapid expansion into new markets
C. Product proliferation

A. Sacrificing market share and preparing for exit

A leadership strategy in a declining industry focuses on:

A. Acquiring competitors and raising barriers to entry
B. Reducing excess capacity
C. Developing mass‑market channels

A. Acquiring competitors and raising barriers to entry

A niche strategy is best described as:

A. Exiting the industry
B. Focusing where demand remains strong
C. Deterring entrants by using excess capacity

B. Focusing where demand remains strong

FIT among activities is important because it:

A. Reduces the need for complementary products
B. Is key to the sustainability of competitive advantage
C. Eliminates the need for a unique position

B. Is key to the sustainability of competitive advantage

Strategy is defined in the slides as:

A. The replication of competitor activities
B. The creation of a unique and valuable position rooted in a system of activities which fit coherently together
C. The elimination of industry rivalry

B. The creation of a unique and valuable position rooted in a system of activities which fit coherently together

What type of industry environment best describes the online dating industry?

A. A fragmented industry characterized by low barriers to entry, many competitors, and limited pricing

B. An embryonic industry driven by technological uncertainty and early adopters

C. A declining industry with shrinking demand and few active competitors

A. A fragmented industry characterized by low barriers to entry, many competitors, and limited pricing

How does eHarmony’s questionnaire and rejection policy address fragmented-industry problems?

A. By increasing entry barriers and self-selecting serious users, reducing rivalry and price sensitivity

B. By increasing scale economies and lowering operational costs

C. By accelerating user growth and maximizing market share

A. By increasing entry barriers and self-selecting serious users, reducing rivalry and price sensitivity

Which Porter generic strategy does eHarmony follow?

A. Differentiation focus targeting marriage-minded singles

B. Broad differentiation targeting all online daters

C. Cost leadership through economies of scale

A. Differentiation focus targeting marriage-minded singles

Why are free dating sites a pricing ceiling rather than a direct substitute?

A. They serve different user needs and lack the screening and trust required by eHarmony’s niche

B. They have lower user engagement and weaker advertising revenue

C. They are primarily used by older demographics

A. They serve different user needs and lack the screening and trust required by eHarmony’s niche

How does eHarmony attempt to change the industry environment?

A. By redefining competition around relationship outcomes rather than browsing and price

B. By matching competitors’ features and lowering subscription prices

C. By partnering with social networks to expand reach

A. By redefining competition around relationship outcomes rather than browsing and price

What best describes eHarmony’s niche market?

A. Marriage-minded singles seeking long-term compatibility and structured interaction

B. Casual daters interested in fast, low-cost matchmaking

C. Technology enthusiast interested in algorithmic experimentation

A. Marriage-minded singles seeking long-term compatibility and structured interaction

Which example best demonstrates strategic “fit” at eHarmony?

A. The questionnaire screening, guided communication, and premium pricing reinforce one another

B. Advertising spending offsets high technology development costs

C. Fast track reduces the need for guided communication

A. The questionnaire screening, guided communication, and premium pricing reinforce one another

Why is guided communication a strategic feature?

A. It shapes user behavior to encourage deeper interaction and higher relationship success

B. It reduced server costs and platform maintenance

C. It increases the number of matches shown to users

A. It shapes user behavior to encourage deeper interaction and higher relationship success

Which strategic option best balances short-term defense and long-term sustainability?

A. Defending the core serious-relationship niche while modestly expanding and leveraging R&D

B. Rapid geographic expansion to preempt competitors

C. Full expansion into casual dating to increase volume

A. Defending the core serious-relationship niche while modestly expanding and leveraging R&D

How does eHarmony avoid price competition in a mature industry?

A. By emphasizing differentiation, brand credibility, and match outcomes instead of price

B. By undercutting competitors through operational efficiency

C. By offering free services supported by advertising

A. By emphasizing differentiation, brand credibility, and match outcomes instead of price