What is the harvest strategy?
harvest strategy is used when a company that decides not to invest in a particular product or branch of their business. This is done because the product or branch in question has reached a point where the continuing investment in it will only cause decreasing revenues. As a result, companies use harvesting strategy to simply take advantage of cash that decreases the product to finance newer initiatives. In most cases, this strategy is used when technological progress causes a certain product an outdated or product to reach a point where it does not have any new investment in it any increase in sales. The way society itself reinvested on itself can have a deep effect on its long -term outlook. For companies that can juggle with many product lines or various initiatives, deciding which one should obtain most of the financing of promotion and imzing is an important part of the business process. One of the techniques that inThis process often uses harvest strategies.
harvest strategy is generally used when some aspect of corporate business has reached a point where no amount of reinvestment can increase its wealth. It could be because a specific product becomes outdated due to technological progress. In some cases, the product line could easily become so popular that it reached its peak, from which it is likely to start sales.
As an example of this phenomenon, imagine a company that produces video games. One particular game has always been one of the most popular societies, but it is played on the game system, which slowly looks for more recent models. As a result, the company will decide on the harvest strategy and stop promoting the game. Any sale of the game from this moment will be purely profit, because there is no investment.
6 Using a strategy withThe company in question can use these funds to help them introduce new products of the product. The key to this strategy is timing, because pulling the plug too early to the proven product in favor of the untested can be risky. The company management must make sure that the cash cow has survived its usefulness before such a decision.