Business strategy (Abell):
What satisfied: The opportunity to find a serious relationship with a member of the opposite sex
Who satisfied: select adults (quality, single, straight)
How satisfied: scientific matching. (Differentiation-based strategy; not cost-based.) Tightly integrated
system including Personality Profile (personality, values, interests), feeding into matching algorithm,
leading to Guided Communication system.
Differentiation-based strategy: product design and market needs; not process design. What is the value
proposition? How does it make money? What is their architecture of revenues?
Competitive space (defined by customer preferences): need for LT rship, image, quality
Analysis: Dynamic.
What makes eH different from Chemistry and others in appealing to customers?
eH: marriage/long-term/serious ;Match: serious as well as casual, dating
Reputation stronger at eH
Results – 2%
Price is higher
System of activities is complementary, reinforcing, consistent, thematic. Alignment between SoA
and strategy. (fast-track may not align with quality, L/T)
System of activities
Paid membership reinforces minimum-level of quality and commitment
Turns down 20% of customers (marriage, age, 3+ divorce) reinforces quality
Converts active members to paying members
Relationship Questionnaire, Pers. profile, matching algorithm, Guided Comm
Xn endorsement
Patented matching algorithm: similarities in personality
Neil Warren reputation - image
guided comm. system
MW only – (limited resources, small size of same-sex market)
- Intense R&D for matching algorithm
- marketing - TV, radio advertising – more than half of funds to non-online (percentages)
Tradeoffs - Every system of activities has trade-offs. What are the trade-offs here? – speed,
convenience (to enter), price, U.S-only
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Business model:
- Razor & blades (easy in, expensive follow)
- network effects/installed users: critical mass affects users (Xn endorsement triggered growth)
Who are competitors? Where are the boundaries of competitive space?
-
Paid-do-it-yourself: imitating features, closing price gap. E.g Match – Chemistry (cheaper, same
activities using different matching criteria & methodology)
Niche sites Free personal sites increasingly popular, challenging biz model of paid online personals
Online social networks increasingly popular, challenging biz model of paid online personals
SinglesNet
Plenty of Fish
True
blackpeoplemeet.com
ScientificMatch.com (DNA)
ChrstinaSingles.com, Muslima.com, SweetonGeeks, JDate
Competitive space
Match
Yahoo Personals – paid, can opt for seeking LT match
Outside of space
SugarDaddyForMe
manhunt.net
Adam4Adam
Date hookup
Substitute products: speed-dating, supermarket, church groups
Or are they substitute products?
Oil spill diagram 8.23 slide 8
Porter’s 5 forces (8.31, slide 9) – future-oriented? (E.g “what might continually worry M?)
map impact of environment onto firm
if change-driver causes comp. force to increase, ability of firm to generate profits goes down
political/legal – privacy laws,
sociocultural: - gay marriage,
technological Internet
demographic – baby boomers
economic –
buyers – low power
suppliers – (don’t really have any – server space)
New entrants – Chemistry, ScientificMatch
substitutes – other social networks
Rivals – match
Inc. proliferation of homosexual rships – rivals may leverage inc demand –
More boomers, more divorce  old single boomers – rivals may focus on these
What are anticipated change-drivers in general environment? How will drivers impact firm via five
forces?
Strategy analysis questions:
- Does strategy fit into resources/capabilities, and opps/threats?
Strategy analysis: Differentiation-based strategy requires:
- efficient, flexible manufacturing system
- ability for quick response to change
- strong marketing and new product R&D functions
- centralized research to better maintain control of new product development
- decentralized d-m authority is key
- informal to allow new ideas and change to emerge
- summary: overall structure needs to be flexible; job roles less structured
Is eH structured this way????
Questions:
Marketing and R& D more important than product effectiveness: the better they get at matching, the
fewer subscriptions (e.g if they serve a customer effectively, the customer leaves) – so to get value out of
match, need to make sure that attract new.
Future – what might continually worry managers?
- What kind of benchmarking and analogies could be done outside of competitive space?
- Is there a need for business re-definition? (incremental changes slide 9,10 8.23)
- Process value: Assets/liabilities. Identity/priority/background/mandated. Move liabilities to
assets; move low-level assets up. E.g move left plus up. Reengineer priority asset to identity asset
-
MM/WW
improving ability of members to set screening preferences
McGahan: Core assets vs core activities: determines radical/creative/intermediating/progressive
change. Important diagram . 8.31, slide 22