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Case | HBS Case Collection | July 2008

eHarmony

by Mikolaj Jan Piskorski, Hanna Halaburda and Troy Smith

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Abstract

eHarmony's CEO needs to decide how to react to imitations of its business model, encroachment by competing models, and ascendance of free substitutes. The case provides four options to address these threats and asks students to choose one after they analyzed the company's strategy. The analysis begins with the understanding of value proposition, as derived from failures of substitutes. It proceeds to examine industry structure and important differences across its different niches. Students can then analyze the essence of a focused differentiation strategy and understand the importance of costly strategic trade-offs. They can also estimate the size of eHarmony's competitive advantage over two other competitors before articulating threats to sustainability, all of which will help them choose one of the four options.

Keywords: Business Model; Decision Choices and Conditions; Growth and Development Strategy; Industry Structures; Competitive Strategy; Competitive Advantage; Service Industry;

Format: Print 26 pages EducatorsPurchase

Citation:

Piskorski, Mikolaj Jan, Hanna Halaburda, and Troy Smith. "eHarmony." Harvard Business School Case 709-424, July 2008.

Related Work

  1. Teaching Note | HBS Case Collection | July 2008 (Revised January 2013)

    eHarmony (TN)

    Mikolaj Jan Piskorski and Hanna Halaburda

    Teaching Note for eHarmony [709424].

    Keywords: Business Model; Strategy; Valuation; Industry Structures; Competitive Advantage; Web Services Industry;

    Citation:

    Piskorski, Mikolaj Jan, and Hanna Halaburda. "eHarmony (TN)." Harvard Business School Teaching Note 709-446, July 2008. (Revised January 2013.)  View Details
    CiteView DetailsPurchase Related

More from these Authors

  • Case | HBS Case Collection | June 2014

    Going Social: Durex in China

    Mikolaj Jan Piskorski and Aaron Smith

    When Reckitt Benckiser (RB), a leading consumer goods company, first entered China, it encountered significant challenges. RB's strategy relied on selling high margin products supported by cost-effective advertising and distribution, but the highly competitive Chinese market made it hard to sustain high margins, inflated television advertising rates made marketing expensive, and an inefficient distribution system increased costs further. In 2010, RB managed to overcome these constraints for one of its brands, Durex, the best-selling condom brand in the world, by leveraging Chinese social media platforms and investing in offline and online distribution. The new strategy paid off—Durex condom sales increased threefold in China and market share increased by over 10%. RB now wanted to generate the same results for its other brands in the country, and needed to decide how to balance investments in offline distribution, social media campaigns, and e-commerce in order to keep growing not just in China, but in other emerging markets as well.

    Keywords: Distribution; Multinational Firms and Management; Internet; Marketing Communications; Brands and Branding; Consumer Products Industry; China;

    Citation:

    Piskorski, Mikolaj Jan, and Aaron Smith. "Going Social: Durex in China." Harvard Business School Case 714-430, June 2014.  View Details
    CiteView DetailsEducatorsPurchase Related
  • Book | 2014

    A Social Strategy: How We Profit from Social Media

    Mikolaj Jan Piskorski

    Almost no one had heard of social media a decade ago, but today websites such as Facebook, Twitter, and LinkedIn have more than 1 billion users and account for almost 25 percent of Internet use. Practically overnight, social media seems indispensable to our lives—from friendship and dating to news and business. What makes social media so different from traditional media? Answering that question is the key to making social media work for any business, argues Mikołaj Piskorski, one of the world's leading experts on the business of social media. In A Social Strategy, he provides the most convincing answer yet, one backed by original research, data, and case studies from companies such as Nike and American Express.

    Keywords: Internet; Web; Strategy; Marketing Strategy; Social Marketing;

    Citation:

    Piskorski, Mikolaj Jan. A Social Strategy: How We Profit from Social Media. Princeton University Press, 2014.  View Details
    CiteView DetailsFind at HarvardPurchase Related
  • Article | International Journal of Industrial Organization | May 2014

    Information and Two-Sided Platform Profits

    Andrei Hagiu and Hanna Halaburda

    We study the effect of different levels of information on two-sided platform profits under monopoly and competition. One side (developers) is always informed about all prices and therefore forms responsive expectations. In contrast, we allow the other side (users) to be uninformed about prices charged to developers and to hold passive expectations. We show that platforms with more market power (monopoly) prefer facing more informed users. In contrast, platforms with less market power (i.e., facing more intense competition) have the opposite preference: they derive higher profits when users are less informed. The main reason is that price information leads user expectations to be more responsive and therefore amplifies the effect of price reductions. Platforms with more market power benefit because higher responsiveness leads to demand increases, which they are able to capture fully. Competing platforms are affected negatively because more information intensifies price competition.

    Keywords: two-sided platforms; information; responsive expectations; passive expectations; wary expectations; Information; Performance Expectations; Two-Sided Platforms; Monopoly;

    Citation:

    Hagiu, Andrei, and Hanna Halaburda. "Information and Two-Sided Platform Profits." International Journal of Industrial Organization 34 (May 2014): 25–35.  View Details
    CiteView DetailsSSRNFind at Harvard Related
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