Reference no: EM133086160
When assessing strategic options for eHarmony in light of Match's launch of Chemistry, eHarmony CEO Greg Waldorf directly implies that eHarmony has misunderstood the strategic importance of network effects in this industry. The case quotes him as saying, "Two years ago, I believed that we had diminishing returns to subscribers in the network. I no longer believe this at all. There is still a massive user satisfaction effect to having more users."
Critique Waldorf's statement. Was eHarmony effective in leveraging network effects in this industry? In your answer, make sure to address the following points:
-How strong are network effects in the "marriage matchmaking" industry?
-How did eHarmony's strategy successfully and/or unsuccessfully take advantage of these network effects?
Given your assessment of eHarmony's handling of the industry's network effects, should eHarmony "relax" its matching process? Examples of the specific initiatives eHarmony was considering for this option included:
-Shortening the initial personality profile to make it easier to sign up for the website.
-Making the matching algorithm less strict, so a given user was matched to a greater number of other users.
-Revealing matches to users more quickly. (It is not directly stated in the case, but eHarmony limited users from receiving more than 5-7 new matches per day, even if the algorithm matched a user to a greater number of matches.)