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What Is Product Based Company?
Product based company is an organization that manufactures and markets specialized products to cater to the specific needs of a vast group of customers. The prime objective of these companies is to introduce or deliver their products to customers and build a strong audience.
Product based companies play a vital role in catering to the needs of various groups of people. These firms use their expertise to deliver the best quality products. Most of these companies belong to the IT sector and introduce products with high market value. However, these companies exclusively need to serve client-specific needs.
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- A product based company is a company engaged in developing products that cater to the audience's needs on a larger or global scale. These products can be tangible or intangible.
- They are mostly a part of Information Technology (or IT), electronics, and software development. For example, Google, Microsoft, Adobe, Cisco, Amazon, Apple, Qualcomm, etc.
- They aim to provide "quality" products to all.
- These companies receive a predetermined, fixed source of income from the customers. These customers are from local as well as global levels.
Product Based Company Explained
Product based company refers to corporations that curate products that are available to a large based audience. These companies operate mostly on an international level. They develop products catering to technology lovers. The product based company list includes Microsoft, Google, Amazon, Apple, Cisco, Adobe, and similar companies.
These companies give primary importance to hard skills and knowledge rather than soft skills. Therefore, the employees and the management strive for expertise and quality. These companies develop products that are qualitative and can serve the needs of many customers. As a result, more customers get attracted, and their products can quickly gain popularity. Thus, most of their audience is on a global scale. For example, Google products like Assistant, search engine, video platform, and others are used globally.
Product based companies develop products before the market raises its demand since major companies already analyze future trends and develop products. Later, when it gets launched in the market, it becomes a trend and popular worldwide. For example, Apple's products like iPhone and Macbook received a great demand for their release. As a result, it enables the customers to enjoy great features.
Examples
Let us look at some examples of such companies to understand the concept better:
Example #1
Suppose program organization Adobe Inc. develops products catering to the graphic designer and videographer needs. Their products include Acrobat, Photoshop, Stock, Premiere Pro, After Effects, and many others. Although they are specific to editing and video software products, their customers range from local to global levels. Another similar example is Alphabet-owned subsidiary "Google Inc." Before technology had emerged its advantages, the search engine of Google had captured the major market share. Likewise, they are specialized in other products that are up to quality. Yet, they have a large customer base.
Example #2
On November 17, 2022, the digital communication and product-based firm Cisco Systems announced a $600 million restructuring plan. In addition, they are also exercising layoffs to build a new company structure. Also, they will make changes in the assets and real estate. Another such news relates to the technology giant Microsoft Corporation. After the release of the German report in November 2022, Microsoft might face issues from the General Data Protection Regulation (GDPR). However, the allegations still need to be confirmed.
Advantages
Let us look at the advantages of product based companies to comprehend the concept better:
#1 - Perfect Place For Technology Enthusiastic
Product based company jobs are a happy place for those individuals who are passionate about technology. Product development involves bringing new ideas and forming a new product. So, if a person is updated about the market trends, they can play a vital role in its development. Also, the skills and knowledge of such employees are in use. Thus, they gain ample experience from it.
#2 - Helps In Understanding Customer Mindset
Reading a customer's mind involves thorough market research and analysis. As these firms develop products prior, there is an estimation of the future market trends. Also, they can understand customers' tastes, preferences, and needs. As a result, it becomes easy to develop products that cater to a large audience.
#3 - High And Superior Quality Products
Product based companies always aim to create prime quality and efficient products. These companies invest hugely in Research and development (R&D). As a result, they gain the customers' trust and create brand loyalty.
#4 - Development Before Its Demand
These companies start product development before the demand to stay ahead of the competition. Therefore, they are known as innovators. As technology development takes time, product based companies plan their project in advance. For example, one of the top product based company Google released a search engine before anyone else. Before the development of the iPhone, the market had no craze for mobile phones. However, its release created a huge demand among customers.
#5 - Employees Earn Secured Income
In product based companies, the employees earn a fixed and secured salary, unlike the others. The job profiles in these companies include the majority of engineers and program developers.
Product Based Company vs Service Based Company
Although product-based and service-based companies operate globally, they have differences. The former focuses only on developing and selling products to customers. In contrast, the latter provides services to its clients. As services are intangible, the payment made to them also differs. While in the former case, they sell both tangible and intangible. However, the payment made is predetermined or fixed in nature. As a result, the employees also receive a fixed product based company salary.
| Basis | Product Based Company | Service Based Company |
|---|---|---|
| Meaning | These companies only develop products for their customers. | The service-based companies provide services to their clients. |
| Recruitment | Hire a selected number of employees | Hire a large number of candidates. |
| Purpose | To develop products suitable for a larger audience. | To provide services as per client needs. |
| Quality and quantity | Providing “quality” products to all. | It differs from client to client. |
| Salary | Pre-determined income | The payment is on a contract basis. |
| Marketing expenses | More | Less (direct contact with clients). |
| Office Timings | Flexible | Fixed |
| Products | Both tangible and intangible | Only intangible |
Frequently Asked Questions (FAQs)
For product based companies, individuals must possess hard skills more than soft skills. Hard skills include coding, programming, and others. As these companies are involved in developing technology and software, a similar skill set is necessary. In contrast, soft skills are vital in the service-based industry.
These companies are into the development of products that require high expertise in the IT background. Therefore, individuals having more knowledge and skills in this field tend to earn more. It includes product managers, developers, programmers, product developers, software engineers, and others.
Banks are a combination of both product and service-based companies. They provide products like savings accounts, fixed deposits, current accounts, wealth accounts, and others. In addition, banks also provide services like overdraft facilities, cheque payments, cheque issuance, car loans, mortgages, retail banking, credit/debit cards, merchant services, and others.
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