Harvesting strategy (decline stage of PLC)

A strategy adopted by a company in the decline stage of a product and service. It calls for gradually reducing a product or business costs while trying to maintain its sales. The first step in this regard is to cut R&D costs and plant and equipment investment. The company might also reduce product quality, sales force size, marginal services, and advertising expenditures. It would try to cut these costs without letting customers, competitors, and employees know what is happening. Harvesting can substantially increase the company’s current cash flows.