Essay About Search Engines And Threat Of New Competitors

Case Analysis – Plentyoffish
Case study: PlentyofFish
(1) What is the nature of competition in this industry? (5 forces analysis)
Threat of New Competitors:
-Time and cost of entry is low (technology is available, starting cost)
-Low level of product differentiation.
-Importance of strong branding.
-Industry requires economy of scale.
-Patents limit new competition.
-Customers are loyal to existing brand.
Intensity of existing Rivalry:
-Around 21 competitors including 3 direct competitors providing free services.
-Low storage cost.
-Large industry size.
-Fast industry growth rate.
-Exit barriers are low.
Bargaining Power of Suppliers:
-Search engines (Google) social media sharing website (Facebook, delicious, etc…).
-Low cost on supplier.
-Automatic system do not need much management.
Threat of Substitutes:
-Dating agencies.
Bargaining Power of Customers
-Large number of customers.
-High price sensitivity.
-High ability to choose for a substitute.
-Low cost of changing.
(2) Does Frind have a solid, sustainable business model for PlentyofFish?
If the company will not plan to expand its business then the business model might be a proper one. However, if the company consider expanding, according to plentyOfFish, the cost will rise as well, thus the business model will need to be refined. The problem being that the company advertising model does not generate sufficient revenue