Analyse the relationship between the product life cycle and cash flow :: Economics

fail the relationship between the produce life cycle and cash feed inThe harvest-home life cycle is split into 5 stand fors* Research and development* Introduction* ripening* Maturity/Saturation* DeclineThe product life cycle is the pretence that represents a sales patternfor a product over a period of time. It shows the gross by a productfrom is introduction to its ultimate decline. There are four stages tothe product life cycle Introduction, growth, due date and decline.Research and development is the first stage of the product life cycle.This is where a firm has a research team look in to mathematical juvenile ideasand products for a business. This can be truly expensive for the firm.No income is made at this stage as there is no tax revenue enhancement coming in tothe firm but capital being gainful out on resources. The cash flow atthis stage is very(prenominal) low.Introduction This is the point when the product life cycle begins.This is when the actual product is launched and does not includetesting or research and development. Manufacturers at this stage spenda lot of money in order to constitute awareness. The cash flow at thisstage would not be very positive. A lot of money has been spent at theintroduction to break down the public to notice the product and to make themaware. The firm would not pack to make any profit at this stage asthe product has just been launched.Growth If the product succeeds, sales ordain grow. Prices could palliatebe high but with increased competition prices will drop. The producerstill advertises at a high level to fight off competition. ingatheringstarts to move into profitability. The cash flow starts to gain morerevenue.Maturity gross sales growth begins to slow as market saturation isapproached. Sales are kept going by those who are late to adopt newproducts. This stage will last longer than the earlier stages. This iswhere the most revenue is taken in for the longest period of time.This is where t he cash flow reaches its meridian but also at the point ofsaturation starts to decrease. To stop the revenue and the productgoing down at the point of saturation perchance the firm could give theproduct a new identity and by chance a new advertising campaign.Decline Eventually the product will become less interesting forpurchasers, and the decline of the product will commence.