Question

Microsoft (manufacturing) vs Google (service)

How does this compare to a service organization?

provide a brief analysis of these two organizations.

Answer 1

Hello there! As you have not mentioned any specifics, I will answer this question in general, but with points. Hope it helps!

Manufacturing companies and service organisations have very different performance parameters and they both work very differently and strive to achieve very different goals.

Whereas manufacturing companies first make a good, marketable and useful product, they have to then convey that usefulness to the consumers and sell their product. The company has to produce great quality products at most economic rates, to attain profitability. The main source of their revenue and profits is the physical product, which the company sells and the consumer can touch and feel, or experience.

On the other hand, a service organisation has no physical product to offer. What they have is an experience, an intangible thing, like financial consultancy, health related advice etc. They provide a value addition to the customer through the services they offer. The organisation has to invest minimum on the physical assets and more on the human assets, its employees and the service providers.

In the present case, Microsoft is a manufacturing company, creating its most popular computer operating system called Windows, besides many other software and applications. The company also sells laptops, mobiles and what not. The basic underlying thing which they sell is a product, developed through the deep research and development, which they undertake, and provide mass products.

The customer satisfaction is measured by how good their product is, how efficiently it has been able to solve the customer’s issues and provide effective and reliable performance to the customer. The company sources its raw materials for the products, spends on the manufacturing and then sells the finished product to the customer, which is mostly a physical thing. The Windows operating system is also a product, which usually comes in a DVD, but it is more of a experience from using the operating system. The company spends millions of dollars on developing the system which fulfils the growing demand of the consumers, and still be cheap and profitable for the company.

So, in crux, Microsoft spends money on developing and building a good product and then marketing and selling it to the end consumer, with the hope that it fulfils the needs of the customer.

Google, on the other hand, is an internet behemoth. Its most strong point is its search engine. The email service, the cloud storage and many other services which it now offers, are also developed keeping in mind the customer satisfaction. But Google does not provide any physical product to the consumer. The search engine only provides results, the links to the various sources and helps the consumer get what he is looking for. There is nothing extra provided by Google. It is showing what is already available on the internet, but its work is to search that sea of knowledge and dig out the most relevant information which the customer is looking for.

Through this, the company is providing a service to the customer, in which, it offers its service of searching the internet efficiently and help a person save time, in finding what he is looking for. The company spends less on office and infrastructure and more on people who develop and improve these search engines, using just a laptop.

The service company like Google invests money in improving its services, offering better and more useful services to the customer and always trying to save time and effort of the customer. To generate revenue in all this, the company instead of charging the customers to pay for its search engine, has developed a different revenue model. It displays advertisements on its search result pages, through which it gets money from the companies whose ads it displays. So the company is earning revenue not by selling any product, but by offering a service.