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Management 13th Edition

Management (13th Edition)

Book Edition13th Edition
PublisherCengage Learning
Chapter APP, End of Chapter, Discussion Questions, Exercise 1
Page 686

What are the major differences between manufacturing and service organizations? Give examples of how each type might benefit from using Web 2.0 tools such as microblogging and social networks.


The major differences between manufacturing companies and service companies are as follows:

  • Nature of production: Manufacturing companies are involved in the production of tangible goods such as cars and furniture, whereas service companies produce intangible goods such as transportation services and hospitality.
  • Storage: Manufacturing goods such as cars can be stored in a warehouse, whereas service goods cannot be stored such as service by a doctor cannot be stored.
  • Supply and demand: Manufacturing goods can be produced ahead of time and supplied when demanded such as cars can be made earlier and stored at a place and supplied when demanded by customers. On the other end, service goods cannot be produced ahead of time, they have to be made available on the spot such as a doctor would provide service only when patients would come for medication.

The following are the benefits of tools of W 2.0 to manufacturing companies:

  • Microblogging and social networking benefit manufacturing companies to reach a wider audience. For instance, many customers get aware of a company due to its global online presence.
  • Manufacturing companies can use the tools of W 2.0 to know where their customers are active and what are their likes and preferences.

The following are the benefits of tools of W 2.0 to service companies:

  • Service companies need to enhance their search engine results due to the high level of competition. Tools of W 2.0 help by providing ease in gaining information and handling digital platforms.
  • Transparency has increased because almost all customers can share feedback on social media websites. So, positive feedback increases the credibility of a company in the minds of the customers.

Sample Response

The points of distinction between manufacturing and service organizations are as follows:

  • Manufacturing companies produce tangible goods, whereas service companies deal with providing services that are intangible.
  • Manufacturing goods can be stored and supplied for future use, whereas services cannot be stored for future use.
  • Manufacturing goods can be produced prior and supplied later, whereas services can be produced only at the time of demand.

Tools of W 2.0 can benefit manufacturing companies in the following ways:

  • Increased reach: With the help of social networking applications, companies can gain awareness too.
  • Knowing more about the potential customer: Tracking what customers search for on the internet.

Tools of W 2.0 can benefits service companies in the following ways:

  • Search engine optimization: Adding better keywords on the website to help the customers to find it easily.
  • Improve customer credibility: Many customers can access information on tools of W 2.0, so they always come to know about what a company is doing and how it is doing.
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