What are Product based and Service based companies?

PRODUCT BASED COMPANIES:

What is a product?

àA product is anything that can be offered to a market that might satisfy a want or need of market. Product may refer to a single item or unit, a group of equivalent products.

What are product based companies?

àA product based companies are those who will have their own products. They develop the product according to market needs. They will collect the requirements from market as well as their research team will have their own opinions of requirements and then they develop the products. To simplify, we can say product-based companies make a specific product and try to market it as a solution.

àThese products are used by the other companies by paying money to these companies. So the products which are going to be used should meet the maximum user needs.

àProduct companies invest in R&D, they take chances, and in they should have the ability to know “what” to build without somebody telling them to.

àTo speak frankly, no company can simply build and sell products without providing services around them.

àThey are mostly experts in developing a fixed kind of product. They mostly analyze the future requirements of the market.

Example for product based companies:

Microsoft, Sun, Oracle, Motorola, Yahoo etc…

àBut Apple, IBM, Sun - all develop products and provide services around them.

SERVICE BASED COMPANIES:

What is a service?

àWork done by one person or group that benefits another, it can also be provision of assistance to customers or clients.

What are service based companies?

àService based companies are those who will develop products for other clients or companies according to their requirements. These companies depend on client. Service Based Company will be involved in the development of Application which will used to serve the various sectors such as Insurance, Health care, Retail, Banking etc.

àAgain service based companies can be product based or project based. They collect all the requirements of the product and they have to full fill the client’s requirements.

àServices companies constantly innovate to remain competitive.

àThe challenge for both the companies will change but service based companies does not own intellectual property, but Product Company does it.

Example for Service based companies:

Infosys, Mahindrasatyam, Wipro ,Cognizant.

àThese all provide services to other organizations like banks, health organizations, institutions, etc

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àPeople working in Product based companies should have abstract ideas, they want the people who uses his/her mind creatively. But people working in service based company must have technical skills and ideas which will fulfill the requirements.

àProduct based companies needs more creative people than service based companies, because product based companies does not require to fulfill any client’s requirements. They should have creative ideas and thoughts about the market needs and they have to fulfill those needs.

àSo we can say that people working in service based companies must have the ability to listen very carefully.