Difference Between Service-Based Company and Product-Based Company

March 16, 2023

Product-Based Companies v/s Service-Based Companies

Students are often confused between product-based and service-based companies. They don’t know which ones to opt for and how to prepare for the placement of these companies. On this page, we have given a comparative guide explaining the difference between service-based company and product-based company, and how to get placed in these companies.

examples of product-based and service-based companies

What is a Service-Based Company?

As evident from the name, service-based companies provide service to the users. They do not have any products to sell. Rather they offer skills or consultancy to their clients. Some of the biggest service-based companies are TCS, Infosys, Wipro, Cognizant, etc.

What is a Product-Based Company?

Product-Based companies have their own products which they sell to their target market. These companies recruit service-based companies to help sell their products. Some of the biggest product-based companies are Adobe, Facebook, HP, Microsoft, etc.

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Difference Between Product-Based Companies and Service-Based Companies

DifferenceProduct-Based CompaniesService-Based Companies
featureThey offer products to the target audience.They offer services in terms of skills, amenities, aids, consultancy, etc
hiringThey do not indulge in mass recruitment or bulk-hiring.They conduct mass recruitment for freshers.
On-campus drivesTheir on-campus drives are usually limited to tier 1 colleges and IITsTheir on-campus drive includes tier 2 and tier 3 colleges as well.
Hiring ProcessThey have multiple hiring rounds, including 3-4 interviewsThey have mostly 2-3 rounds in hiring.
SalaryJoining salary is high. Product-based companies offer a package of 10+ LPAFreshers are offered a package of 3-4 LPA at the time of joining. Note:- For certain coveted profiles like TCS Digital or Infosys PP, the package is high.
Work environment Better work environment with flexible timings.Working environment can be stagnant with rigid work timings.

How To Get Placed in Product-Based Companies?

Product Based Companies have a rigid placement process. They conduct multiple rounds before hiring a candidate. If you are aiming to get placed in these companies you can expect the following rounds:-

  • Online Test- based on aptitude, verbal, programming concepts, etc.
  • Coding Test- hands-on coding test.
  • Technical Interview-
  • Techno-Managerial Interview
  • HR interview
How to Prepare for Placements in Product Based Companies
how to prepare for placements product based companies

Placement Preparation for Product-Based Companies

  • To prepare for product-based companies, you need to focus highly on coding.
  • Prepare advanced coding questions.
  • Some companies also ask candidates to code a system, like a ticket reservation system or food delivery system.
  • Additionally, prepare DSA concepts, searching sorting algorithms, linked lists, trees, etc.
  • Also, work on Database management systems and SQL.
    If you have worked on projects related to the latest technologies like ML, and AI, then it is an add-on.

Major Product-Based Companies

  • Adobe
  • Microsoft
  • Amazon
  • Google
  • Cisco
  • Apple
  • HP
  • Facebook 
  • Amdocs

Read More:- How to Prepare for Product-Based Companies?

How To Get Placed in Service-Based Companies?

Service-Based companies are comparatively less rigid in terms of placement rounds. The general recruitment process for a service-based company includes:-

  • Online Test
  • Technical Interview
  • HR Interview
How to Prepare for Placements in Service Based Companies
how to prepare for placements service based companies

Placement Preparation for Service-Based Companies

  • To prepare for service-based companies you have to get work on the aptitude round (quants, logical, verbal).
  • Additionally, you need to be good in C/C++ as most online tests are based on these languages.
  • Along with them you can also learn basic concepts of either Java or Python.
  • Prepare basic DSA concepts.

Major Service-Based Companies

  • TCS
  • Infosys
  • Cognizant
  • Wipro
  • Capgemini
  • Tech Mahindra
  • Mindtree
  • HCL
  • Mphasis

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FAQs on Product-Based Companies v/s Service-Based Companies

Is Amazon a Product-Based Company or a Service-Based Company?

Amazon is a Product-Based Company.

Is it better to work in a Service-Based Company or a Product-Based Company?

Both companies have their pros and cons. While product-based companies offer higher packages, service-based companies have a wider growth curve.